How might an EB-5 investor change a direct investment during the conditional residence period?

Any changes made to a direct investment during the conditional residence period have a high probability of being considered material changes and will result in the denial of Form I-829, Petition by Investor to Remove Conditions on Permanent Resident Status.

United States Citizenship and Immigration Services (USCIS) carefully scrutinizes all aspects of a business plan prior to adjudicating Form I-526 and, in an ideal scenario, no changes will be made to the project from filing to adjudication. There are changes that are not considered material, such as those that do not affect a project’s overall eligibility. For example, if an investor files Form I-526 with the intention of establishing a Mexican restaurant and instead decides to offer Italian cuisine, that would not constitute a material change. On the other hand, if Form I-526 was filed with the intention of establishing a restaurant and then the investor switches to an entirely new project, such as a hotel, that would be a material change. Another example is a change made to the structure of the investment itself. For instance, if an investor selects a repayment strategy in which they are guaranteed to be repaid once the business makes a profit—preferred repayment structure—and then opts to use a cash flow sweep instead, that would also constitute a material change.

A possible exception to USCIS’s stance on material changes is an investor’s ability to demonstrate that the original Form I-526 and business plan were submitted in good faith. This means that the investor made every effort to comply with the plan as it was submitted. The investor would also need to demonstrate that they are still eligible to participate in the EB5 investment program, which would not be the case if, for example, their funds were no longer at risk. Additionally, material changes are not an issue if they happen between the approval of an exemplar I-526 petition and the actual filing of the petition by the investor afterward. The problem with this scenario is that exemplar I-526 petitions are meant to shorten adjudication wait times and material changes to a project would mean forfeiture of that benefit.

If a change needs to be made to a direct investment project, the entire EB-5 investment process would likely need to be restarted, and a new Form I-526 would need to be filed, outlining the new offering.