The underlying purpose of the EB5 program is to stimulate the U.S. economy and create new jobs. To ensure that EB-5 investments are used for these purposes, investors are required to place their capital “at risk” for the duration of their EB5 project. Foreign nationals who wish to obtain permanent residency through the EB5 program must be open to the possibility of financial loss and financial gain. An investor cannot be guaranteed they will get any of their invested capital back as that does not comply with the at risk requirement. Whether or not EB-5 investors will have their capital returned, and when, depends on the success of the project and the specifics of the offering documents.
EB5 investors must place their capital at risk before filing the I-526 petition. However, there is the possibility of I-526 denial. In these scenarios, how and when the investment capital will be returned varies between projects. For example, some projects will return the capital 1-2 years after the denial, others may guarantee a full refund within 60 – 90 days of the denial. It is important for investors to carefully evaluate a project’s offering documentation to determine what will happen to their funds in the case of I-526 petition denial.
Near the end of an investor’s two-year conditional residency period — through which their capital must remain at risk — they can file Form I-829 to apply for permanent resident status. EB-5 regulations don’t require capital to remain at risk any longer than the conditional residency period. However, some regional centers may not permit repayment until I-829 petition approval. How the funds will be returned depends on the project’s exit strategy, which will be found in a project’s offering documentation.
It is in an EB5 investor’s best interest to conduct thorough due diligence on projects before making a decision. The return of investment capital depends on a number of variables, especially project success and compliance with EB5 regulations. Proper due diligence can provide an investor insight into these factors and help find a project with the best chance of immigration success and financial return.