Late last month, U.S. Citizenship and Immigration Services (USCIS) published a Q&A with additional guidance on redeployment, specifically related to the Policy Manual update published in July 2020. To the best of our knowledge, the new information was not announced to the industry.
The Q&A does restate that investors’ capital can be redeployed in a new geographic area so long as the regional center’s expanded designation is approved prior to further deployment. The Q&A in its entirety can be found below.
From USCIS (View Here)
Questions and Answers: EB-5 Further Deployment
Q1. Do I have to submit information for further deployment activities when I file Form I-924A, Annual Certification of Regional Center?
A1. For now, Form I-924A does not separately require information about specific further deployment activity. However, we routinely revise forms and a future version of Form I-924A may require such information
Q2. I have a pending Form I-526, Immigrant Petition by Alien Investor, and I need to further deploy my capital to maintain my eligibility. Do I need to submit more information to USCIS about my pending petition to show that I am maintaining my eligibility?
A2. We must be able to determine whether you have met all applicable requirements, including that your capital is at risk and that your new commercial enterprise continues to engage in lawful commercial activity throughout the entire EB-5 adjudication process (from the time we receive your petition through the time of its adjudication). Depending on your case, you may need to give us more information so that we can determine whether you are eligible for the benefit. You may submit this information to us while your petition is pending (this is called interfiling). We may also notify you and request additional information during the adjudication process.
Q3. My Form I-526 petition is pending, or my Form I-526 was approved, but I have not obtained conditional permanent resident status, and I need to further deploy my capital to maintain my eligibility. If the regional center where I first deployed my capital expands its designated geographic area after I submit my Form I-526, may I further deploy my capital anywhere within the expanded geographic area?
A3. Yes, you may, if we approve the request to expand the geographic area before you further deploy your capital. Per our guidance on further deployment (PDF, 314.97 KB), after investors meet the job creation requirement, “further deployment must occur within the regional center’s geographic area, including any amendments to its geographic area approved before the further deployment.” A regional center must submit a request via Form I-924 to amend its geographic area. We must approve the Form I-924 and the expanded designated geographic area before you can further deploy your capital into the expanded geographic area.
Q4. On June 14, 2017, USCIS published a Policy Manual update addressing further deployment of an investor’s capital to continue to meet applicable eligibility requirements. Will USCIS apply the July 24, 2020, Policy Manual clarifying update (on further deployment of capital) to all Forms I-526 and I-829 pending at the time of publication?
A4. Yes, because the July 24, 2020, Policy Manual update clarifies existing policy, we will apply it to all Forms I-526 and I-829 pending at the time of publication as well as future petitions. We determined that any potential impacts to investors are minimal because the updated guidance merely clarifies continuing eligibility requirements. This clarification does not change any substantive requirements.
Q5. How will USCIS consider further deployment after approving a Form I-526 and before the investor obtains conditional permanent resident status?
A5. After we approve an investor’s Form I-526, and before the investor obtains conditional permanent resident status, we may revoke the approval based on our discretionary revocation authority. (See INA §205.) We do not, however, currently have a routine process to seek information about further deployment during that period. To the extent that we become aware of such information, we will seek to exercise our discretionary authority judiciously on a case-by-case basis, taking into account any derogatory information, fraud or willful misrepresentation, or other evidence of bad faith.
Q6. How does USCIS consider further deployment for purposes of establishing eligibility for removal of conditions at the Form I-829 stage?
A6. While the clarifying guidance only updates the Policy Manual at Volume 6, Part G, Chapters 2 and 4, many of the same concepts apply to the related requirements for removal of conditions in Form I-829 adjudications (for example, what constitutes a qualifying at-risk investment in an ongoing commercial enterprise). However, the impact and timing of certain changes related to further deployment may differ between Form I-526 and Form I-829 adjudications. As explained in the Policy Manual at Volume 6, Part G, Chapter 5, relating to Form I-829 adjudication, USCIS permits an immigrant investor who has been admitted to the United States on a conditional basis to remove those conditions even if certain circumstances have changed.
Accordingly, when we review further deployment while adjudicating Form I-829, we focus on whether the investor can establish that the further deployment complies with applicable requirements, including sustaining their at-risk capital investment in an ongoing commercial enterprise (that is, having a sufficient relationship to commercial activity) over the required period of time, despite certain changed circumstances related to the further deployment. Notably, the law does not necessarily require further deployment within an approved regional center to remove conditions once an investor has obtained conditional permanent resident status. As noted in the Policy Manual, even termination of the regional center the investor is associated with will not automatically terminate the investor’s conditional resident status. The investor will continue to have the opportunity to demonstrate compliance with EB-5 program requirements, including through reliance on indirect job creation.
Q7. May an investor further deploy capital during the conditional residence period to remedy insufficient job creation from the initial deployment?
A7. As explained in the Policy Manual at Volume 6, Part G, Chapter 5, in cases where the investment did not create the required number of jobs in accordance with the original business plan, further deployment may be possible during the conditional residency period, provided the petitioner filed the initial Form I-526 immigrant petition in good faith and with full intention to follow the plan outlined in that petition.
However, if an investor has not yet obtained conditional permanent resident status, the material change guidance discussed in the Policy Manual, Volume 6, Part G, Chapter 4, applies.
Q8. Do the eligibility requirements for initial deployments of capital also apply to further deployments of capital?
A8. Yes. The clarifying Policy Manual guidance at Volume 6, Part G, Chapter 2, provides that an investor may deploy capital directly or indirectly through any financial instrument, so long as it meets applicable requirements. Deployments of capital, both initial and further deployments, must satisfy applicable requirements to:
- Place the capital at risk, to include a risk of loss and a chance for gain;
- Demonstrate the actual undertaking of business activity;
- Demonstrate a sufficient relationship to commercial activity such that the enterprise is and remains commercial; and
- Make the full amount of the investment available to the business(es) most closely responsible for creating employment.
However, for further deployments of capital after satisfying the job creation requirement, the initial deployment of capital that satisfied the job creation requirement generally will have also met the requirement that the full investment amount be made available to the business(es) most closely responsible for creating employment.
Q9. Does the clarified guidance regarding deployment of capital directly or through any financial instrument include the purchase of new issue municipal bonds (as discussed as a potentially permissible further deployment of capital in prior guidance)?
A9. Yes. New issue municipal bonds are a type of financial instrument included within the clarified Policy Manual guidance, which (in Volume 6, Part G, Chapter 2) provides that capital may be deployed directly or through any financial instrument so long as it meets applicable requirements.