Comment: Expedited Direct & EB5 investments for RCs during lapse

One consequence of the RC program lapse is that USCIS’s IPO has nothing to do except process direct 526s (and all 829s). Since more than 95% of all 526s have been RC-based 526s, and less than 5% are Directs, we would not be surprised if Direct I-526s start getting approvals within a month or two, effectively expediting all Direct I-526s. If USCIS does not deliver super-fast processing times for Direct I-526s applications during the lapse, the agency will soon have to explain to Congress why was there dramatically lower processing while receiving only a small fraction of applications as compared to its historical norms. 

So, the current era in EB5 is not only the “Golden Era of Directs” by virtue of the RCs being absent from the market, it is also the “Golden Era of Directs” because it is very likely that all Directs will receive adjudication within a couple of months, a welcome change to the couple of years that has been the norm at USCIS. 

How can RCs cash in on this bonanza?

  • Some RCs are raising money for direct projects, typically, these are restaurants, and other projects closely tied to the real estate industry. Whether RCs are developer-controlled, or independent, there is nothing that prevents an RC from sponsoring direct EB5 projects.
  • Many RCs have a significant number of direct jobs in their projects, and significant job buffers. Some of these RCs are creating separate Direct EB5 slots using the direct jobs with only a modest reduction of job buffer for their RC-based EB5 investors.

Apart from the business model change (% of equity for the RC instead of a fixed rate loan %age), there are several structuring issues that become important in the above two scenarios: For example, creating a separate class of shares for the direct EB5 investors, usually with no voting rights nor board representation; valuation of the overall equity structure to ensure that EB5 investors get the appropriate number of shares; etc - hence, it behooves RCs to work closely with both their immigration attorneys and corporate/securities attorneys to ensure that risk is managed well - lawsuits involving the JCE will likely be much more painful than those involving just the NCE (reminder: for direct EB5, the NCE and JCE are the same entity). 

Interestingly, some RCs have come up with escrows to accept $500K RC investments under the following terms: (a) The investment remains in escrow only for a limited time of around 3 months (b) If the RC program is not reauthorized by then, the $500K is returned to the investor (c) If the investment amount is raised to $900K, the investor has the option of EITHER adding the additional $400K OR getting their $500K back--whatever the investor chooses; and (d) If the investment amount stays at $500K when the RC program is reauthorized, the escrowed money flows into the project.

The above are some of the ways of staying in the EB5 market and continuing to raise EB5 capital during this lapse of the RC program. Change and uncertainty also bring opportunity.

Please let us know your thoughts by writing to us at editor@ilw.com

Article: The Fight for Immigration Justice Is Not Over: SCOTUS Rules Mandatory Detention of Certain Immigrants Seeking Safety in the United States by Sophia Genovese

News: USCIS and DHS issues Notice on Extension and Redesignation of Somalia for Temporary Protected Status

News: ICE and DHS Issues Notice on Employment Authorization for Somali F-1 Nonimmigrant Students Experiencing Severe Economic Hardship as a Direct Result of the Current Crisis in Somalia

Focus: The EB-5 Book -- Inventory Clearance Sale 75% Off

The EB-5 Book; Editors: Matt Gordon and Sarah A. Schroeder

  • Specific focus on Enforcement and Compliance.
  • Articles by Shae Armstrong, Jeanne Calderon, Michael T. Clark, Laura Danielson, Michael Dunn, L. Batya Schwartz Ehrens, Gary Friedland, Robert P. Gaffney, Adam Gale, Steve Ganis, Sherman Golden, Douglas Hauer, Jennifer Hermansky (Jen), Parisa K. Karaahmet, Mark Katzoff, Lily Li, Brandon Meyer, John Neill, Angelo A. Paparelli, Chun Yun ("Elizabeth") Peng, John Roth, Paul Ruby, Reid Thomas, Robert S. Winner, and Ben Zou.

By Now! Online

Headline: Biden releases 21-point immigration plan amid bipartisan criticism Click here
Headline: Biden administration to resume fast-track deportation procedure for migrant families Click here
Headline: Pressure Is Building On Biden To Do More For Asylum-Seekers And Migrants Click here
Headline: Democrats Eye Legal Path for Some Undocumented Immigrants Click here
Headline: As Immigration Courts Face Backlogs, Advocates Say It's Time To Overhaul The System Click here

Immigration Business Plan

ImmigrationBusinessPlan.com has been drafting immigration business plans daily exclusively to support E-2, L-1, EB-5 visas since 2004. What sets us apart is the fact we are a boutique firm and not a factory. Given our strong expertise in U.S. business immigration, we even draft part of RFE letters for law firms. We are storytellers. U.S. business immigration is our subject. Our business plan is our voice. Our mission is to pave the way for your clients' visa approval. Supporting Visa Applicants & Lawyers Nationwide for Over A Decade. Find out more: Call us at 888-278-7775, Email us at: info@ImmigrationBusinessPlan.com Visit us at ImmigrationBusinessPlan.com

Letters of the Week:

ComingsNGoings: Submit Your Announcement
If you have a professional announcement such as: New Position, Honors And Awards, Mergers & Acquisitions, New Office Address, New Appointment, New Associate, New Attorney, New Partner, that you wish to share with the Immigration Daily community, send your professional announcement to: editor@ilw.com comingsNgoings announcements is a free service


An Important disclaimer! The information provided on this page is not legal advice. Transmission of this information is not intended to create, and receipt by you does not constitute, an attorney-client relationship. Readers must not act upon any information without first seeking advice from a qualified attorney. Copyright 1995-2017 American Immigration LLC, ILW.COM. Send correspondence and articles to editor@ilw.com. Letters and articles may be edited and may be published and otherwise used in any medium. The views expressed in letters and articles do not necessarily represent the views of ILW.COM.
Publisher: Sam Udani ISSN: 1930-062X
Advisory Board: Jason Dzubow, Rami Fakhoury, Matthew Kolken, Chris Musillo, Lory Rosenberg, Greg Siskind, Joel Stewart, Margaret Wong