7 Things We Learned from New EB-5 Program Chief Sarah M. Kendall

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Earlier this week, new Immigrant Investor Program Office Chief Sarah Kendall addressed the EB-5 community at the AILA/IIUSA EB-5 Industry Forum in Chicago, Illinois. We are happy to see this type of engagement by USCIS and are hopeful for continued dialogue to address the concerns of immigrant investors and regional centers. Here are seven things we learned from Ms. Kendall:

1. Minor Investors

Ms. Kendall confirmed there is no age limit for minors filing as the principal investors but indicated that USCIS will continue to look at issues of contractual capacity and voidability of investment contracts.

2. Bridge Financing

Ms. Kendall indicated it was difficult to provide specific guidance on the issue of bridge financing because of the “diversity of work and financial arrangements and structures.” She noted that the term of the loan, by itself, does not disqualify financing as a bridge loan that would receive credit for job creation purposed and that USCIS will look at interim nature of loan and contemplation of future receipt of EB-5 (or other) capital to repay the bridge financing. This is inconsistent with language in RFEs previously issued by USCIS. Additional guidance clarifying this important issue is required to provide certainty for all participants in EB-5.

3. Compliance Reviews

Ms. Kendall stated that, as part of its emphasis on “integrity measures,” USCIS will look at a Regional Center’s organizational, administrative, and management capabilities (internal financial controls and processes for due diligence) as well as evidence of purported job creation, to confirm what has been submitted in Form I-924A applications (due December 29, 2018!) . USCIS will perform a site assessment after issuing a “Notice of Compliance Review” and document the results in a compliance report, which becomes part of the regional center’s record.

4. No Substitution of Minor for Parent

Ms. Kendall indicated that USCIS does not see a legal basis to allow parent to substitute child as investor and retain the parent’s priority date. We’ve previously blogged on the practical side of accomplishing a substitution in compliance with EB-5 rules.

5. Redeployment

Ms. Kendall noted that, when determining whether redeployment is “consistent with the scope of the new commercial enterprise’s ongoing business,” USCIS will look at the NCE’s organizational documents, private placement memorandum, and business plan for JCE. This is another area in EB-5 that needs better guidance for the industry to have predictability.

6. Material Change

Ms. Kendall announced that USCIS is conscious of the human element in EB-5 but noted that lack of statutory clarity for USCIS to provide guidance that encompasses all issues surrounding the concept of “ material change ,” which become increasingly important with EB-5 visa waiting times and extended investment periods.

7. Reduction of Pending I-526 Petition Backlog

Ms. Kendall noted the increased production at IPO in reducing the backlog of I-526 petitions, with fewer pending now since FY 2014 . We are hopeful that I-829 adjudication timelines will soon drop too.

For more information, REGISTER HERE for our November 8th no cost webinar “EB-5 Update – State Department Provides New Waiting Line Estimates (And Other New Info).”

This post originally appeared on Wolfsdorf Rosenthal Immigration Attorneys


About The Author

Joseph Barnett is a partner at Wolfsdorf Rosenthal LLP and a member of the firm’s EB-5 and business immigration practices. He is licensed as an attorney in Illinois and Wisconsin and practices exclusively in immigration and nationality law.

Mr. Barnett represents immigrant investors seeking permanent residency in the United States through USCIS-designated Regional Centers and investment in their own businesses. Mr. Barnett also assists developers with the establishment of complex corporate and financing structures for EB-5 capital. He works with economists, securities lawyers, business plan writers, and other professionals to prepare Regional Center applications, amendments, and project “exemplar” approvals.

As the lead member on the firm’s Chinese EB-1 team, Mr. Barnett has successfully represented Chinese executives, researchers, professors, medical professionals, engineers, musicians and artists, media and public relations professionals, and others with extraordinary ability in the sciences, arts, education, business, or athletics seek permanent residency in the U.S. Mr. Barnett also assists executives and managers in multinational companies to obtain permanent residency in the U.S.

Mr. Barnett is also responsible for a variety of other immigration matters, including temporary work visas, employment-based petitions, administrative appeals, and federal writ of mandamus lawsuits.