When should an EB-5 investor transfer investment funds into the new commercial enterprise (NCE)?

A regional center–sponsored project should follow the agenda outlined in the subscription agreement. For direct investment projects, investors should transfer funds into the NCE or into escrow prior to submitting their I-526 petition.

An essential component to the transfer of funds in the EB-5 regional center model, escrow accounts expedite the discharge of investment capital to a project upon adjudication of the investor’s I-526 petition. Typically, the escrow account contains the entirety of the EB-5 investment capital. This capital can be accessed once the investor’s petition has been approved.

According to Part G, chapter 2 of the USCIS Policy Manual, an EB-5 investor’s funds may be held in escrow until they have conditional green cards if the funds will immediately and irrevocably be released when

  • the investor’s I-526 petition is approved, and
  • the investor’s conditional green card is issued and the investor may enter the United States, or the investor’s Application to Register Permanent Residence or Adjust Status (Form I-485) is approved.

Investors are permitted to use foreign escrow accounts on the condition that the petition states the minimum eligible investment funds will be moved to the NCE in the United States after the investor has been granted conditional permanent resident status.

EB-5 investors generally would rather their funding stay in escrow until their I-526 petitions are approved. But due to USCIS’s lengthy adjudication periods, most EB-5 investors rely on the hybrid escrow release structure. The strategy entails releasing a portion of the investor’s funding once they file their I-526 petition and subsequently releasing the rest of the funding after they receive approval on their petition.

In the event an investor receives a rejection for their I-526 petition, it is customary for EB-5 project developers to explain what will follow next. In cases of weaker projects, the EB-5 investor will see a return of their funding within a year of two of the rejection but may have to continue standing by the project until the end, without being able to reap any of the immigration bonuses. Investors are therefore advised to seek projects that offer a denial refund guarantee, which would refund their invested capital within 60–90 days of the I-526 petition rejection.