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EB-5 Insights

Where Government Policies and Business Realities Converge

Posted in Awards & Recognitions, EB-5, Immigrant Investor, Immigrant Visa

The Business Immigration & Compliance Practice of Greenberg Traurig, LLP is pleased to announce that Jennifer Hermansky has been elevated to shareholder in the Philadelphia office. Hermansky focuses her immigration practice on both employment-based and family-based immigration. Specifically, she focuses her practice on EB-5 immigrant investor visas. She has prepared and filed many immigrant investor visa petitions, both through individual investments and regional center investments. She is among 40 attorneys Firmwide who were elevated to shareholder in more than 10 key practice areas.

To read full press release, click here.

 

Posted in EB-5, EB-5 Immigrant Investor Program, Events

Kate Kalmykov recently presented at the 2017 Invest in America Summit in Shenzhen, China. Kalmykov’s panel discussion “EB-5 Immigrant Investor Program Under New Immigration Policies” provided an overview of the basics of EB-5 and what to expect in the coming year.

Greenberg Traurig’s Kate Kalmykov prepares for her presentation on EB-5

Greenberg Traurig’s Kate Kalmykov prepares for her presentation on EB-5

Kate Kalmykov and conference participants provide an update on the EB-5 immigrant investor program under new immigration policies

Kate Kalmykov and conference participants provide an update on the EB-5 immigrant investor program under new immigration policies

Greenberg Traurig’s Kate Kalmykov provides a basic EB-5 overview

Greenberg Traurig’s Kate Kalmykov provides a basic EB-5 overview

Conference participants of the 2017 Invest in America Summit

Conference participants of the 2017 Invest in America Summit

Kate Kalmykov and conference participants

Kate Kalmykov and conference participants

 

Posted in Eb-5 Regional Center, I-924, Regional Center, USCIS

USCIS announced on March 21, 2017 the launch of its EB-5 Regional Center Compliance Audit Program (Audit Program). The Regional Center Compliance Audit partially clarifies what USCIS has spoken about in public at stakeholder engagements, which is the eventual use by USCIS of site-visits to verify information submitted in EB-5 petitions.

There appears to be two aspects to the Audit Program. First, the employees of the Audit Program will review a regional center’s filings, which would likely include all Form I-924 and Form I-924A applications submitted by a regional center, and any ancillary documents submitted with those filings to verify the information provided using public and non-public databases. For instance, if a regional center is incorporated within the state of Delaware, USCIS will likely verify the regional center entity is still validly operating and active with the state. However, USCIS also could seek verification of information which relates to a job creating enterprise that the regional center is sponsoring, such as whether or not the job creating entity is still validly operating or whether or not the permits required for the job creating entity to operate are still valid. These types of routine audits of existing regional centers conducted by USCIS should be relatively easy to for USCIS to dispense with, as they simply require an individual at USCIS to verify information remotely.

The second aspect of the Audit Program is performing a site-visit by USCIS. According to USCIS’ webpage, this could entail any of the following:

  • Review of Form I-924 filings by the regional center;
  • Review of Form I-924A filings by the regional center;
  • Review of any updates to those filings; and
  • Information to verify submissions or statements in those filings.

It appears from the above that USCIS is requiring regional centers to have paper copies of all submissions to USCIS available on demand. That appears to be a fairly significant compliance requirement given that a regional center filing can be more than 1,000 pages. Additionally, it is unclear what USCIS would require from a site-visit when it requests updates to previously submitted regional center filings. As noted, those filings can be more than 1,000 pages and potentially include information and documentation regarding its sponsored job-creating entities. The vagueness of these requests, while likely intentional by USCIS, does little to assist regional center operators in preparing for a site-visit. It is likely that at the time of a site-visit a regional center will need to provide USCIS with additional information after the fact.

While some regional centers are affiliates of the job-creating entities they sponsor, many are not. If USCIS seeks to verify information regarding a job-creating entity, it is not clear how a site-visit to a regional center operator would accomplish this. While many regional centers receive regular updates regarding projects they sponsor, those updates may not be day-to-day, and may be limited to information the job creating entity is contractually obligated to provide. For instance, a job creating entity may only be required to provide information to a regional center as necessary to comply with USCIS requirements. Without a written request from USCIS regarding information concerning a job creating entity, that job creating entity may not want to divulge such information for fear of disclosure of trade secrets. Additionally, it is unclear how USCIS will handle submissions of projects or new commercial enterprises that never moved forward.

Lastly, USCIS’ statement that it will request to review any updates to regional center filings calls into question whether USCIS believes that regional centers have an ongoing duty to update USCIS. The relevant regulations are vague, and generally speaking, appear to only require regional centers to annually provide USCIS with information to demonstrate that the regional center is continuing to promote economic growth (i.e., submission of the Form I-924A). Given that regional centers already annually file the From I-924A, it appears unclear under what statutory or regulatory authority USCIS could require a regional center to provide information and data more than annually.

To that end, it is noteworthy that USCIS specifically states the following: “If you decline to participate in a compliance audit, USCIS may follow-up with you separately regarding compliance with program requirements.” What is certain is that each regional center operator should immediately develop internal protocols in the event of a USCIS site-visit, and consider training their staff to identify an individual from USCIS and how to handle questions from USCIS. The regional center may wish to designate a point person to be contacted in the event of a site visit and to handle all USCIS questioning, as USCIS notes that any information provided during a site-visit will become part of the regional center’s record. Having a plan in place not only can help everyone respond appropriately in this type of situation and can also help alleviate any panic that may occur when a government agent shows up.

Posted in EB-5 Program, USCIS

EB-5投资移民的一个关键要求是需要每个投资人以优势证据(“preponderance of evidence”)表明,他们投资到新商业企业的资金来自合法来源。由于许多国家的货币限制,投资人可能会通过私人资金交换的方式来与第三方互换货币。这种类型的私人货币兑换和在中东流行的“哈瓦拉”系统可能比较相似。

在典型的EB-5货币互换中,投资人将以本地货币转入第三方(实体或自然人)的账户中。然后,第三方再以等额的美元资金转入投资人的海外账户。投资人然后把收到的美元投资到一个新的商业企业。该投资人将妥善记录此货币互换交易,并提交I-526请愿书。通常情况下,投资人并没有提供关于第三方资金来源的任何信息.

直到最近,美国移民局并没有质疑协助货币互换的第三方的资金来源。不过,美国移民局似乎已经改变了内部政策,并已开始对每个使用第三方协助资金交换的案件发出补件要求。该政策似乎针对所有第三方,无论是实体还是自然人。因此,已经提交I-526申请,但未提供文件证明第三方资金来源的投资人应开始考虑,并为可能发出的补件要求做准备。尚未提交I-526申请,但打算使用第三方资金交换方式来将货币转到美国的投资人应考虑收集有关第三方资金来源的文件,这样可能有助于减少收到补件要求的可能性。

Posted in EB-5 Program, USCIS

A crucial requirement of the EB-5 Program is that each individual demonstrate by a preponderance of evidence that the monies invested in a new commercial enterprise were derived from a lawful source. Due to currency restrictions in many foreign countries, individuals may swap currency in a private exchange of funds. This type of private currency exchange can be similar to what is known as a “Hawala” system that is popular in the Middle East.

In the typical EB-5 currency swap, an individual will transfer funds in a local currency to a third party (an entity or a natural person). The third party will then transfer to an account of the individual an equivalent amount of funds in U.S. dollars. The individual will then take those U.S. dollars and use them to make an investment in a new commercial enterprise. That individual would properly document this transaction, albeit, typically without any information on the source of the third party’s funds, and file an I-526 Petition.

Until recently, USCIS did not question the source of funds of the third party assisting in the currency swap. However, it appears USCIS has shifted their internal policy and has started issuing requests for evidence for each case where a third party assisted in the exchange. This appears to be the case regardless of whether the third party is an entity or a natural person. Individuals who have previously filed an I-526 Petition without documenting the source of funds for the third-party should consider preparing for the potentially issuance of a request for evidence. Individuals who have not yet filed an I-526 Petition, but intend to use the third-party capital exchange method for transferring funds, should consider collecting documents regarding the source of the third party’s funds, which may help reduce the chances of a request for evidence.

Posted in Awards & Recognitions, Immigration

Greenberg Traurig’s Business Immigration & Compliance practice was recently listed by JD Journal as one of New York City’s top immigration law firms.  JD Journal is a recognized legal resource, providing legal news and law firm news for attorneys, lawyers, law students, paralegals, law firms, and other legal professionals. Greenberg Traurig’s Business Immigration & Compliance practice has nearly 100 legal professionals nationally. Led by Kate Kalmykov, our New York Immigration team has developed into one of the most recognized immigration practices in New York City.  To view JD Journal’s full list of top Immigration firms in New York City, please click here.

Posted in Executive Order, Temporary Restraining Order

On March 15, 2017, the day before President Trump’s new Executive Order (EO) entitled “Protecting the Nation from Foreign Terrorist Entry into the United States” went into effect, a federal judge in Hawai’i issued a nationwide temporary restraining order (TRO) blocking the implementation of the EO. This EO, issued on March 6, 2017, revoked and replaced the original EO issued on Jan. 25, 2017. The first EO was also temporarily halted by a federal court in Seattle, after which the Ninth Circuit stayed the ruling.

In the current case at hand, State of Hawai’i and Ismail Elshikh vs. Donald J. Trump, et al., Judge Derrick K. Watson of the U.S. District Court for the District of Hawai’i granted the Motion for TRO filed earlier in the week. The TRO was granted on grounds that the EO violated the Establishment Clause of the U.S. Constitution.

In his ruling, Judge Watson cited portions of the new EO that suspend U.S. entry of nationals from Iran, Libya, Somalia, Sudan, Syria, and Yemen, with certain exceptions carved out that were not explicit in the first EO, such as exempting lawful permanent residents and those who are already physically in the United States. The new EO also includes text that suspends the U.S. Refugee Admissions Program for 120 days.

The plaintiffs in the case, the State of Hawai’i and Dr. Elshikh, both cited to injuries that would occur to both the state and the family, respectively, if the EO was implemented, since it bans travel for nationals from one of the six designated countries who are abroad. The plaintiffs also stressed that the text of the EO effectively targets the Muslim religion, quoting statements made during interviews and campaigns by the administration.  As such, the plaintiffs sought to enjoin Sections 2 and 6 of the new EO.

Judge Watson found that the State of Hawai’i had standing, based on the fact that its university systems would suffer from both a cultural and financial burden, as would its tourism industry. He also found that Dr. Elshikh had standing due to the fact that he was able to show injury to his family if the EO was implemented.

As to the legal basis for granting the TRO, Judge Watson found that due to the background, history, and intent of the newly issued EO, the Plaintiffs were likely to succeed on the merits of an Establishment Clause claim.

In addition, on March 16, 2017, a federal judge in Maryland also temporarily blocked the order.

Greenberg Traurig will continue to monitor events surrounding this TRO and provide updates relating to relevant agencies in connection with the newly issued EO.

Posted in EB-5 Program, I-526, I-924, Immigrant Investor, Immigration, Regional Center, USCIS

The Immigrant Investor Program office (IPO) has decided to hold in abeyance I-526 Petitions until the adjudication of an associated Exemplar I-924 Petition, even when an associated I-526 Petition is past posted processing times. This has had a particularly detrimental effect on I-526 Petitions filed prior to Sept. 30, 2015, when there was a surge of Exemplar I-924 Petition filings.

To recap, prior to Sept. 30, 2015, there was a rush by developers and regional centers to file Exemplar I-924 Petitions in hopes of being “grandfathered” under current law, should the current law change. This was spurred by the introduction of the American Job Creation and Investment Promotion Reform Act, S. 1501, which delayed the effective date for regional centers approved as of the date such legislation was enacted by 1 year. You can find a point by point summary of S. 1501 on the EB-5 Investment Coalition’s website. As we all know, S. 1501 failed to pass and has not been reintroduced in the 115th session of Congress.

The effect of this legislation was to spur many regional centers to automatically file an Exemplar I-924 Petition whenever they begin soliciting investors for a new project. This was not always the case prior to this legislation, as there was not, and currently is not, any law, regulation, or policy which requires an Exemplar I-924 Petition to be filed prior to soliciting investors for a new project. See USCIS Policy Manual Vol. 6, Part G, Chapter 3, Section D.

USCIS’ official policy of adjudicating all applications and petitions, whether related to the EB-5 Program or another area of immigration, is to generally process each application and petition on a “first-in, first-out” method (FIFO), with certain exceptions for approved expedited requests. In the EB-5 context, the IPO has repeatedly stated its attempted adherence to FIFO while acknowledging that processing efficiencies are gained by grouping adjudications via regional center or new commercial enterprise. We have written about this in connection with EB-5 previously, and USCIS has also made reference to this in the EB-5 context.

However, without acknowledging it publicly via stakeholder engagements, USCIS has a policy to hold in abeyance pending I-526 Petitions when an Exemplar I-924 Petition associated with the same new commercial enterprise has been filed. USCIS will then adjudicate the Exemplar I-924 Petition prior to adjudicating the I-526 Petitions. While there may be some internal processing efficiency from adjudicating an Exemplar I-924 Petition prior to an earlier filed I-526 Petition, it is unclear how this procedure is substantively advantageous to individual investors. The practical effect of this policy, when coupled with the surge in filings of Exemplar I-924 Petitions prior to Sept. 30, 2015, has resulted in a number of situations where I-526 Petitions have been pending 10-12 months past posted processing times.

It does not appear that this policy has resulted in a decrease in processing times. A large amount of I-526 Petitions and Exemplar I-924 Petitions filed during the summer and fall of 2015 are still pending with USCIS. Indeed, USCIS’ most recent processing times, dated as of March 8, 2017, show that USCIS is currently processing I-526 Petitions filed as of Sept. 27, 2015. You can find the most recent processing times on the USCIS website.

Additionally, this policy may discourage the filing of an Exemplar I-924 Petition after an investor in a regional center has filed a related I-526 Petition because that I-526 Petition may be delayed beyond processing times. Another consideration is that when USCIS does not adjudicate I-256 Petitions within processing times, investors can become skittish and withdraw their petitions, which, in turn, may cause regional centers and developers to lose investors. Hopefully, USCIS will revise these procedures so that any I-526 Petition pending past posted processing times will be adjudicated, regardless of whether or not a related Exemplar I-924 Petition is pending.

Posted in EB-5, EB-5 Program, Events

Greenberg Traurig’s EB-5 team will sponsor and participate as an organizing committee member of the 2017 Invest in America Summit and Exhibition, the largest USA-themed investment conference and exhibition in China, with attorneys Kate Kalmykov and Laura Reiff as VIP speakers. The Summit will travel to four Chinese cities in 2017. Event dates and locations are:

  • May 6, 2017 | Shanghai, China | Main Event
  • May 7, 2017| Beijing, China
  • May 13, 2017 | Shenzhen, China
  • May 14, 2017 | Guangzhou, China

Invest in America welcomes U.S. investment projects, regional centers, real estate brokerage firms, franchises, private equity and venture capital companies, financial services, attorneys, CPAs, international trade agencies, government officials, and colleges to participate in exhibitions and presentations. The summit also promises investors and business executives who are eager to learn more about investment and business opportunities in the United States.

The conference in Shanghai, Shenzhen, Beijing, and Guangzhou will include an EB-5 trade show featuring more than 80 exhibition booths, and comprehensive breakout sessions lead by EB-5 industry leaders. As in previous years, the Invest in America planning committee anticipates strong attendance from China and around the world.  Each location will include a full-day exhibition, migration agent roundtable, exhibitor presentations, a networking luncheon with migration agents, and panel discussions.

  • Early bird registration discount of 10 percent off a Shanghai Conference (main location) booth fee, if payment is made by March 15, 2017.
  • Extra 10 percent discount for all booth fees if participating in all four locations.

For more information, sponsorship opportunities, and to register, please visit http://www.top-eb5.com/.

Posted in EB-5, EB-5 Program, Eb-5 Regional Center, I-526, I-829, I-924, USCIS

On March 3, 2017, the USCIS Immigrant Investor Program Office (IPO) held an EB-5 Stakeholder Engagement in which several important updates to the program were provided.

“Unofficial” Statistics for Fiscal Year 2017

From October to December 2016, USCIS saw a surge in petition filings, likely due to an upcoming sunset in the EB-5 regional center program as well as an increase in USCIS filing fees that took effect on Dec. 23, 2016. Specifically, there were 4,395 I-526 petitions filed; 184 I-924 applications filed; and 752 I-829 petitions filed. During this time, USCIS adjudicated 3,583 I-526 petitions (a 120 percent increase), 88 I-924 applications and 112 I-829 petitions. IPO noted that they are currently receiving petitions and applications at a rate faster than they can adjudicate, but hope that this will change with increased hiring and improved efficiency of processes.

Processing Times

USCIS is authorized to hire up to 247 employees over the fiscal year 2017, which will hopefully have a positive effect on improving processing times. IPO also hopes that the creation of a dedicated I-829 adjudication division will increase output on adjudications of all relevant applications and petitions in the EB-5 category.

In order to improve efficiency of process, the IPO also provided a list of ten filing recommendations to the Stakeholders:

  1. Identify dual filings in the cover letter for filings for a project submitted to USCIS on both an I-924 application and an I-526 petition.
  2. I-924 applications do not need to include organizational or transactional documents unless associated with an Exemplar I-526 petition.
  3. If submitting an interfiling with updated documents, highlight the changes.
  4. Do not submit bound petitions or applications to USCIS and do not submit double-sided pages.
  5. Submit a cover letter with the I-526 petition that clearly notes whether it is a regional center or direct investment, and include a summary of the evidence provided.
  6. Submit a table of contents or index with each filing and include corresponding tabs for each piece of evidence.
  7. Provide page numbers for each document.
  8. Submit clear and legible copies of the evidence provided.
  9. Provide complete English translations for all foreign language documents submitted.
  10. Notify USCIS immediately should the applicant or petitioner choose to withdraw the case.

Dedicated I-829 Adjudication Division

In October 2016, the IPO created a division of adjudicators and economists who will focus solely on the adjudication and customer service-related inquiries on Form I-829 Petitions by Entrepreneurs to Remove Conditions on Permanent Resident Status. The I-829 division has 3 teams with 8 adjudicators and economists on each team; a senior member of each team will be tasked with interviewing select I-829 petitioners and most interviews will be conducted remotely. USCIS hopes that the creation of a dedicated I-829 division will speed up the processing times for I-829 adjudications going forward.

Compliance Measures

The IPO is continuing to grow its compliance unit, which currently consists of 3 separate branches, to ensure that regional centers and non-regional center new commercial enterprises with pooled EB-5 investments comply with the applicable laws and policies. One branch will focus on the review of Form I-924A applications through which regional centers demonstrate their continued eligibility for regional center designation. Another branch will be responsible for handling actions such as Notices of Intent to Terminate and Notices of Terminations for regional centers. The third branch will oversee regional center audits, the first of which will be conducted next month.

In a further effort to enhance the integrity of the EB-5 program, the IPO will continue to conduct site visits by its 13 site inspectors, who received comprehensive training on the EB-5 program. Over the fiscal year 2017, the IPO anticipates that it will conduct approximately 250 site visits to both new commercial enterprises (NCE) and job creating entities (JCE). IPO reiterated that there typically is no advance notice for site visits. Rather, the site inspector will visit the premises on a fact-finding mission to evaluate whether the NCE or JCE is operating as expected and will assess the findings of a site visit in the context of the petitioner’s filings with USCIS

Commitment to Transparency

In addition to the updated list of terminated regional centers on the USCIS IPO website, the IPO will soon begin to publish regional center termination notices so that Stakeholders can easily access and review termination notices without making a FOIA request. Termination notices will be published in a USCIS electronic reading room (further details will be provided when the site goes live). IPO feels it is important to publish regional center termination notices so that investors and the general public can better understand why a particular regional center was terminated and know the types of activities that will lead to regional center termination.

Additionally, IPO will soon begin publishing approval and denial statistics for each active regional center.

Policy Change Regarding Regional Center Geographic Area Expansion

On Nov. 30, 2016, USCIS published Part G of its Policy Memo, which superseded the guidance found in the May 30, 2013, Policy Memo with regard to the expansion of the geographic scope of a regional center. Per the May 2013 Policy Memo, a regional center could file an amended I-924 application requesting an expansion of the regional center’s geographic scope, and could concurrently file I-526 petitions relying on the proposed expanded geography during the pendency of the I-924 amendment application. However, with the new Form I-924 which is effective as of Dec. 23, 2016, this is no longer the case.

In what was unquestionably the most controversial update from this Stakeholder Engagement, IPO announced that it would continue to adjudicate all I-526 petitions filed before Dec. 23, 2016 based on the guidance from the May 2013 Policy Memo. However, for all I-526 petitions filed on or after Dec. 23, 2016, the current guidance from the new Policy Memo must be followed: I-526 petitions based on investment in a geographic area not previously approved will be deniable due to ineligibility at the time of filing. In other words, as of Dec. 23, 2016, an I-924 amendment application to expand the geographic scope of a regional center must be approved before investors can file an I-526 petition based on that expanded geographic area. This announcement has serious implications for pending petitions that were filed in reliance on the prior policy and Stakeholders were vigilant in their requests for IPO to reconsider this unexpected change in policy.

Source of Funds Questions

Several questions were asked by Stakeholders regarding source of funds and path of funds issues for I-526 petitions, including inquiries regarding the use of bitcoin and other virtual currencies as the source of funds as well as investments made from joint bank accounts owned by the investor and a family member. As expected, IPO reiterated that any EB-5 investment must meet the relevant regulatory and statutory requirements (i.e., the petition must demonstrate that the funds invested were acquired directly and indirectly by lawful means and that the investor owned and controlled the funds invested). Additionally, IPO confirmed that there is no statutory or regulatory prohibition against minor petitioners, as long as the I-526 petition demonstrates the investor’s ability to contract under the relevant law.