Ivener & Fullmer LLP

USCIS Posts EB-5 Memorandum for Public Comment


On February 14, 2013, U.S. Citizenship and Immigration Services posted an updated memorandum on the EB-5 program, and is soliciting public comment. The updated memo makes various technical changes. Among other things, it clarifies that a material change after filing of an I-526 through admission as a conditional resident requires a new I-526, and that any approved I-526 will be revoked if such a change occurs. The memo also notes that if an immigrant investor is guaranteed the return of a portion of his or her investment, or is guaranteed a rate of return on a portion of his or her investment, then that portion of the capital is not at risk. If the investor is guaranteed the right to eventual ownership or use of a particular asset, then the value of the guaranteed ownership or use of such asset will be subtracted from the total amount of the investor’s capital contribution in determining how much money was truly placed at risk. The memo notes that nothing precludes an investor from receiving a return on his or her capital during or after the conditional residence period, so long as the return was not previously guaranteed to the investor and so long as the funds are not a return of the investor’s principal.

The memo also notes that in the case of a troubled business, job preservation is allowed in addition to, or in lieu of, job creation. In a troubled business, 10 jobs must be preserved, created, or some combination of the two. For example, an investment in a troubled business that creates four qualifying jobs and preserves all six pre-investment jobs would satisfy the statutory and regulatory requirements. “Troubled business” is defined in the memo, which quotes the regulations.

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