RCBJ Retrospective: It’s never too soon to begin preparing for I-829 petition filings

11.25.14 | Archived

It’s never too soon to begin preparing for I-829 petition filings (Vol. 2, Issue 3, October, 2014 (Pgs. 20-21)

By Reid Thomas, Executive Vice President, NES Financial

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While EB-5 can be an attractive source of capital for U.S. based developers and entrepreneurs, it is first and foremost an immigration program. The primary motive for foreign investors looking to invest in the program is to receive U.S. permanent residency. A Green Card without conditions is the ultimate goal. This milestone is achieved upon approval of the Investors’ I-829 petition (Petition by Entrepreneur to Remove Conditions).

The requirements for a successful I-829 petition include:

  • The timely filing of the I-829 petition. USCIS requires filing of an I-829 petition within the 90-day window immediately prior to expiration of the two-year conditional residence period. Note that the conditional residence period begins on the date of entry, not on the date of the I-526 approval.
  • Evidence that the new commercial enterprise, as described in the I-526 petition, has been created.
  • Evidence that the full amount of the requisite capital was invested (i.e. $500,000 for an investment into a project in a Targeted Employment Area).
  • Evidence that the investment has been sustained at risk throughout the two-year conditional residence period and utilized for job creation purposes.
  • Evidence that the investment resulted in the creation of 10 full-time jobs (or will create jobs within a reasonable period of time).

For EB-5 Issuers, getting this right is critical. Ultimately the Issuer, and the whole EB-5 program will only succeed if investors are successful in achieving their primary objective, an I-829 petition approval. From the investors’ perspective the stakes are enormous. At the point of I-829 submission the investor and family are typically well established in the U.S. and if something goes wrong, investors do not have the option to appeal, – instead, the process moves straight to a deportation hearing. A successful I-829 petition approval is the key success objective for all EB-5 stakeholders.

To quote Benjamin Franklin, “By failing to prepare, you are preparing to fail”. Preparation for the I-829 petition should begin at the outset of launching the EB-5 project to achieve the highest I-829 success rates.

The EB-5 Issuer should start by consulting their immigration counsel and identifying the key pieces of evidence and data that they plan to include in the I-829 petition.  The following table provides some examples of the types of evidence that could be used.

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Unfortunately when considering all of the above information, the sources, formats, timing, and complexity vary, making this a significant challenge. Implementing a technology driven solution from the outset is an excellent approach to this problem.

There are several important considerations when deciding on a technology based approach.  These considerations include:

  1. Scalability: The solution should be cost effective from the project outset. Ideally the costs of the solution are not all front-end loaded but instead scale as the volume of investors grows
  1. Ease of Implementation, Setup and Maintenance: EB-5 adjudication standards and policies  are continuing to evolve and the journey of an individual investor lasts multiple years. Any solution chosen at the outset needs to be adaptable in order to maintain the required level of compliance.
  1. Ability to pull and store information from disparate sources: Not all the information required to be tracked and stored comes from the same place. Financial information usually comes from the bank, or in most cases multiple banks.  While on the other hand, documents of formation, accounting records etc. are generated by completely different sources. They all need to be assembled for a comprehensive and compliant I-829 petition.
  1. Ability to store and retrieve information in multiple formats: The complete set of information required will include data, text documents, images.
  1. EB-5 specific tracking & reporting: Evidence to support that each individual investor has met the job creation requirement is a unique EB-5 requirement and not something that is found in traditional fund tracking solutions.  A solution that recognizes the unique EB-5 requirements from the outset will be more cost effective and efficient in the long run than trying to customize a non EB-5 tool.
  1. Security & Transparency: The data being tracked and maintained is highly confidential and any solution must be executed in a way that provides the necessary levels of transparency without sacrificing security.

Issuers who have neglected to implement a formal process and solution for tracking and maintaining the required I-829 evidence at the beginning of the project are finding themselves scrambling at the last minute. While in the past this may have worked, it was certainly an expensive and risky approach.  With the dramatic increase of I-526 filings in recent years we expect to see a corresponding bubble in the number of I-829 petitions being filed in the next few years.  A casual approach to preparing for this I-829 bubble will result in bad headlines for our industry and disastrous results for investors. Preparing now is key. Going forward, preparing from the outset of the project is the way to go.

 “Practical Guidance in Preparing I-829 Petitions”by Susan L. Pilcher and Elsie Hui Arias was referenced in the writing of this article.

RCBJ Retrospective articles are reprinted from IIUSA’s Regional Center Business Journal trade magazine. Opinions expressed within these articles do not necessarily represent the views of IIUSA and are provided for educational purposes.

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