WHITE PAPER: STANDARDS AND GUIDELINES FOR REDEPLOYMENT OF EB-5 INVESTMENT FUNDS
Prepared by:
Arnstein & Lehr LLP
Klasko Immigration Law Partners, LLP
Jeffer Mangels Butler & Mitchell LLP
The EB-5 investment community is now facing a new challenge, as many of the more seasoned EB-5 investment projects begin to mature and the original investment capital is returned by the project owner to the new commercial enterprise. USCIS has clearly stated its policy that EB-5 investment capital is required to remain "at risk" in the new commercial enterprise until each EB-5 investor's I-829 petition is adjudicated. However, USCIS has provided no guidance on what requirements that new investment is required to meet, other than that it must meet the definition of "at risk."
As the authors of this linked White Paper, we have undertaken the task of proposing a set of standards and guidelines for redeployment of EB-5 investment capital. It is our hope that the principles of redeployment stated in this White Paper will be accepted by USCIS and by the EB-5 investment community. We believe that the standards expressed in this White Paper should meet the "at risk" requirements established by USCIS, and it should also meet the requirements of federal securities laws and the fiduciary duties of the general partner or manager of each new commercial enterprise when making a decision to redeploy their investment capital in a new investment. We acknowledge that this is an evolving issue and that new developments may occur that require changes in these proposed standards and guidelines. At the same time, we believe it is important to the EB-5 community that these standards and guidelines are offered as a model now, so that new commercial enterprises have a basis for analyzing their options when the need to redeploy their investment capital becomes a reality.
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