EB-5 Investment Immigration: Pros and Cons of Installment Payment for the $800,000 Investment
EB-5 Investment Immigration: Pros and Cons of Installment Payment for the $800,000 Investment
Attorneys:Attorney Jeff Zhengquan Xie,Attorney Jiarui Yin,Attorney Qian Zhao,Attorney Haochun Ling, Xiao Xiang
Currently, the minimum investment required for the most common EB-5 investment immigration program is $800,000.
What many investors are not aware of is that this $800,000 does not necessarily have to be invested into the project company in a lump sum to file the investment immigration application.
In other words, the $800,000 can be remitted to the project company’s escrow account in installments.
What are the benefits of this approach?
What if an investor cannot gather the full $800,000 investment fund all at once?
What if the investor’s required investment capital is not immediately available—for example, the proceeds from a property sale will only be received after a certain period of time?
What if part of the investor’s required investment fund is locked in a fixed-term investment account, which cannot be withdrawn temporarily or would incur substantial losses if withdrawn prematurely?
What if the process of converting RMB into US dollars for the investment is cumbersome and time-consuming?
What if the investor needs to file the investment immigration application by a specific deadline, but the US dollar balance in their account is less than $800,000?
And so on.
All these situations can be resolved by using the installment investment method introduced in this article.
These are the advantages, or pros, of installment investment.
However, this method of installment investment also has certain drawbacks, or cons.
First and foremost, installment investment can only be treated as a special case and cannot be used as a regular investment method.
Second, installment investment places high demands on the knowledge and experience of the investor’s immigration attorney. Improper handling may affect the approval of the investment immigration application and the conversion from conditional permanent residency to permanent residency.
Third, for installment investment, the investment period required by USCIS will not start counting until the full amount of the investment has been contributed to the project.
The new EB-5 policy requires that the investment capital must be deployed in the project for at least two years.
If the project company has utilized the first installment of the investment capital received, does this mean the two-year investment period starts counting?
No.
If the project company has utilized both the first and second installments of the investment capital received, does this mean the two-year investment period starts counting then?
No, either.
When exactly does the two-year investment period start?
The two-year investment period commences on the date when the full $800,000 investment capital is officially deployed into the job-creating project.
Therefore, the more installments the investment is divided into, and the longer the interval between each remittance, the longer it will take to meet the statutory two-year investment requirement in legal terms; theoretically, the longer it will take to potentially recover the investment capital.
Thus, if an EB-5 investor is able to invest the full $800,000 in a lump sum, it is not recommended to apply for investment immigration via the installment payment method.
Nevertheless, under special circumstances, installment investment can prove to be extremely important and necessary.
The above overview is prepared by XIE LAW OFFICES,LLC. to provide legal information to the Chinese community. It is primarily for academic discussion purposes and does not constitute legal advice on specific cases. If you already have legal representation, please consult your own attorney, who is familiar with the details of your case. Clients of Xie & Associates Law Firm, as well as readers who have not yet retained legal counsel, may contact Attorney Xie for specific legal questions. If you wish to reprint this document, please do so in full without any deletions, and clearly indicate the source.
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