EB5 Investors Magazine | Page 65

cases, which mandates a decision or RFE on a case within 15 days, and only costs an additional $1,225 on top of much lower base fees. Given that I-829s are so much more expensive, perhaps those funds be better spent in an effort to ensure they are processed more efficiently. 2. Give immediate and clear guidance regarding loan-models now that Chinese retrogression is looming, enabling funds to be repaid back to the NCE prior to I-829 approval in line with the regulations. At the time of I-829 filing and adjudication an investor must have “invested or [be] actively in the process of investing the requisite capital,” and “substantially met the capital investment requirement of the statute and continuously maintained his or her capital investment over the two years of conditional residence.” Although the regulations have not changed in 21 years, the use of EB-5 funds by stakeholders has changed drastically. USCIS deserves considerable credit for recognizing this through guidance such as the May 30, 2013 memorandum.6 But perhaps the biggest change to the landscape in the program’s history occurred in August 2014 when Chinese EB-5 visas were made unavailable. New guidance is needed to reflect how a shortage in immigrant visa numbers will affect I-829 adjudications. Here’s why: the EB-5 loan model has become the most prevalent form of job creation today. In this model, the investor’s new commercial enterprise operates as a pooled investment vehicle to provide EB-5 financing to a project entity (also known as a job creating enterprise or “JCE”) in the form of a loan. The JCE’s use of the loaned funds spurs indirect job creation, to be credited to the investors. Interest on the loan is paid to the NCE. “Investors born in Mainland China constitute approximately 85 percent of EB-5 immigrants. But now with retrogression for these petitioners imminent, years could go by after I-526 approval but before assumption of conditional residency.” Investors born in Mainland China constitute approximately 85 percent of EB-5 immigrants. But now with retrogression for these petitioners imminent, years could go by after I-526 approval but before assumption of conditional residency. If an EB-5 loan contract calls for repayment to the new commercial enterprise prior to an investor achieving I-829 approval, how will USCIS adjudicate the petition given that there is no longer any risk of loss to the investor? How long should the loan term last given that the period of retrogressi