5 Tips to Save Immigrant Investors from Troubled EB-5 Projects and Troubled Regional Centers
Almost every month brings news of Regional Centers or projects running into trouble with the U.S. Securities and Exchange Commission (“SEC”). Unfortunately, the current regulatory framework for the EB-5 Immigrant Investor Visa Program (“EB-5 Program”) provides little, if any, protection for an immigrant investor whose Form I-829 Petition by Alien Entrepreneur to Remove Conditions (“Form I-829”) is denied by USCIS for project-related purposes, or if the Regional Center under which an immigrant investor has invested is subject of an investigation or civil complaint by the U.S. Securities and Exchange Commission (“SEC”). EB-5 immigrant investors can hope for the best, but prepare for the worst, in such events. In the first six months of Fiscal Year 2016, less than twenty-five I-829 petitions were denied, however the number of I-829 petitions pending is at record levels and may continue to increase.
The EB-5 framework tracks the Immigration Marriage Fraud Amendment Act (“IMFA”) framework in providing a two-step process for green card issuance. First, a two-year conditional residency is issued. Thereafter, a Form I-829 petition must be filed and approved to remove the conditions and obtain the full ten-year green card. Unlike the marriage framework that has a “good faith-good cause” waiver if the marriage fails, EB-5 investors have limited options when the project fails.
Below are five tips to assist EB-5 investors who are preparing for the worst. This blog post is designed to support immigrant investors whose EB-5 process has failed due to no fault of their own, other than possibly having picked an EB-5 project that did not succeed in creating the requisite number of jobs or investing through a Regional Center which violated state or federal laws.
Thankfully, as of May 2013, USCIS will no longer automatically deny a Form I-829 petition to remove conditions solely for a “material change” to the business plan submitted in the Form I-526, Immigrant Petition by Alien Entrepreneur (“Form I-526”). Instead, the conditional permanent resident will still be able to obtain Form I-829 approval if the requirements for the removal of conditions have been satisfied.
- The best option is to file a new Form I-526 petition as soon as possible and obtain a new priority date (this is particularly important for EB-5 immigrant investors born in mainland China as they are subject to a quota backlog).
- The new Form I-526 petition will NOT be able to recapture the priority or filing date of the old Form I-526 petition.
- In general, once a Form I-829 petition is denied, USCIS should issue a Notice to Appear (“NTA”) in removal (deportation) proceedings. In most jurisdictions, removal proceedings can take many years to conclude after issuance of an NTA. Asking an Immigration Judge for a continuance during removal proceedings and indicating that a new qualifying EB-5 investment has been made and a Form I-526 petition has been filed will give USCIS additional time to adjudicate the new Form I-526 petition. For immigrant investors born in Mainland China, this provides more time for new visa number to become available. Most Judges are ready to administratively close proceedings as deporting denied EB-5 conditional residents is a low priority.
- However, USCIS does not always issue an NTA. Even though applicable guidance indicates that, upon Form I-829 denial, the EB-5 investor’s (and his/her derivative beneficiaries’) conditional permanent residency is terminated “as of the date of the  written decision,” in fact, such immigrant status can be terminated only by an Immigration Judge during removal proceedings.
- Even though conditional lawful permanent residency is maintained until the end of removal proceedings, there will likely be issues attempting to re-enter the U.S. with merely the receipt notice of a denied Form I-829 petition. Accordingly, EB-5 investors with denied I-829 petitions can request “Temporary Evidence of Permanent Residence” stamps from a local USCIS field office . This I-551 stamp is placed in the passports of the primary investor and each derivative beneficiary, indicating that the conditional lawful permanent residency has been extended for one year—even though the adjustment has been denied. Wolfsdorf Rosenthal LLP recommends that all individuals with pending Form I-829 petitions obtain I-551 “temporary evidence of permanent residence” stamps in their passports to facilitate international travel, although being sent to secondary inspection is probably unavoidable.
This post is designed to provide practical and useful information on the subject matter covered. However, it is provided with the understanding that no legal, tax, accounting, or other professional services are being rendered or provided. If legal advice or other expert assistance is required, the services of a competent professional should be sought.
This post originally appeared on Wolfsdorf Connect. Copyright © 2016 Wolfsdorf Connect - All Rights Reserved. Reprinted with permission.
Joseph Barnett is licensed as an attorney in the State of Illinois and the State of Wisconsin and practices exclusively in immigration and nationality law. Mr. Barnett's practice focuses in the area of EB-5 Immigrant Investor Program and other business immigration matters. Mr. Barnett received his J.D. from Vermont Law School. Mr. Barnett may be contact at email@example.com
Robert J. Blanco specializes in business and employment immigration cases. He prepares both immigrant and non-immigrant petitions for skilled workers, executive managers, high net worth investors, and people of extraordinary ability in the arts, sciences, and business. As a member of the firm's EB-5 team, Mr. Blanco prepares cases for individual investors and advises U.S. businesses on how to structure investment projects under the regulations of the EB-5 program. He also represents clients before the United States Citizenship and Immigration Services (USCIS).
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