EB-5 Immigrant Investor Program: How Long Must the Investment Capital Be Committed?

1. Petitions Filed on Form I-526 Before the Enactment of the RIA

2. Petitions Filed on Form I-526E After the Enactment of the RIA

3. Analysis and Commentary

For Legacy EB-5 Investors

• Legacy investors who have already obtained either conditional or permanent green cards are theoretically eligible to recover their investment capital. In other words, the project operator may return the EB-5 investment funds to them.
• The actual recovery of investment capital is still subject to various factors related to the specific investment project.
• Legacy investors whose Form I-526 petitions have not yet been approved are not allowed to reclaim their investment funds.
• Legacy investors still waiting for their visa priority dates to become current are also prohibited from withdrawing their investment capital.
• If an EB-5 project has been completed or terminated, the project operator may be in a position to return the investment funds—but legacy investors who have not yet filed Form I-829 still cannot accept the return of capital from the project operator.
• Legacy investors who have not filed Form I-829 must consent to the project operator’s reinvestment of their capital (i.e., "secondary investment" or "tertiary investment") unless they wish to abandon their green card application.
• All legacy investors who have filed Form I-829 are eligible to receive the return of their investment capital.

For New EB-5 Investors

• The date of investment is of critical importance to new EB-5 investors.
• The remittance of investment capital into a third-party escrow account established by the EB-5 project operator does not constitute an official "investment".
• An EB-5 "investment" is defined as: "The full amount of the qualified investment is contributed to the new commercial enterprise and placed at risk in accordance with applicable regulations (including availability for use by the job-creating entity where appropriate)."
• In simple terms, an official "investment" is deemed to have occurred on the date when the EB-5 capital is released from the escrow account to the EB-5 project operator for utilization.
• New EB-5 investors are theoretically eligible to recover their investment capital two years after the funds are released from the escrow account.
• However, the actual recovery of capital is still subject to constraints imposed by the specific circumstances of the EB-5 project.
• Beyond the two-year investment period, there is another hard requirement for the project operator to release the EB-5 funds: the investment must have created the required number of jobs.
• New EB-5 investors are far less likely to encounter situations where their capital needs to be reinvested in secondary or tertiary projects.
• The new guidelines only specify the earliest possible date for the return of investment capital to investors. The actual capacity of the project operator to refund funds may be significantly limited by the realities of project development and operation, as project development is often a lengthy and gradual process. For example, some projects may take six months to a year just to obtain the necessary permits. Therefore, new EB-5 investors should not overly expect to recover their investment capital exactly two years after the funds are disbursed to the project.