[HOT] EB-5 Issues Still Unresolved

In this article to be continuously updated and edited, our goal is to list all arguably still-unresolved EB-5 issues. I say "arguably" because no one knows for sure if certain issues have been clarified sufficiently by USCIS to be relied upon without hesitation. Often, some of the below questions have been submitted as agenda questions in advance of various USCIS EB-5 teleconferences, but for some reasons, we have not observed USCIS answer them in a clear manner. Hopefully, USCIS will answer some of them in future.

Feel free to comment if you feel that soem of the issues have been answered adequately by USCIS, because I am not certain of any of the following issues.

  • May EB-5 investor/petitioner use unsecured loan as EB-5 fund? Regulations appear to be requiring that any loan used as EB-5 capital investment money should be secured by personal collateral, but we have heard that USCIS often allows unsecured loan, although we also heard of RFEs issued asking for evidence that the loan was secured by personal asset.
  • May the NCE entity return the EB-5 funds if I-829 has been denied, without such repayment being deemed a redemption?
  • I-829 denial notice specifically states that conditional permanent resident status has been "terminated". Does this mean once I-829 denial notice is issued, the Principal Applicant and dependents no longer possess CPR status?
  • On what legal basis does USCIS define whether certain changes after I-526 approval constitute "material" change? USCIS has expounded many times that so and so changes are "material", but have not explained yet why they are "material" in relation to what requirements and why.
  • Does USCIS allow jobs (direct, indirect and induced) to be counted which are created outside the geographic scope of the RC? For example, if the EB-5 project takes place in CA but some of the jobs are created in Virginia, can the jobs created in Virginia (outside the RC region) be counted? USCIS' policy is "no", but at least one AAO decisions seems to say "yes". One argument is that any "new" jobs in the U.S. should be counted versus only "new" jobs in the geographic confines of the RC should be counted. We believe that logically only the jobs in the region should be counted, so that even if existing jobs are relocated for bona-fide reasons to the RC geographic region, they should be counted, but that's not the USCIS policy.
  • Where in the EB-5 statute and/or regulations is there a requirement that an EB-5 project have to take into account negative net effect of the project on the jobs in the region? For example, if a new shopping center is built, it might be true that the shopping center will take away customers from another shopping center in the region, but so what? That's inherent in any project that creates jobs, unless USCIS believes that such EB-5 project is NOT in the national interest, in which case USCIS has the right to deny the EB-5 project.
  • If a business goes "out of business" and lays off all its employees, and then if the business assets are bought and the former employees are hired, is this permissible for EB-5 purpose?
  • When (the precise point in time related to the construction phases) does USCIS deem the commencement of construction activities? This issue is important because construction period leads to indirect/induced jobs and also determines if the construction activities last longer than 2 years so that some direct jobs may be able to be counted. However, USCIS uses the phrase "commencement of construction" without specifically defining what activity is deemed to be the commencement.