[Q] Is a provision promising the return of the fund in the event of I-829 denial legal under EB-5 law?
[Q] If the project offering documents or the project Limited Partnership includes a provision which states that the fund will be returned in the event of I-829 denial, is this allowed under EB-5 law?
No, USCIS recently made it clear through an official statement that this kind of arrangement will not be allowed. The released statement reads:
If your clients have pending I-526s at a USCIS Service Center or have had approved I-526s returned by NVC that contain subscription agreements that promise to return their investment if their I-829 is denied then the subscription agreement needs to be amended. That wording has been deemed to constitute a redemption agreement and such an agreement is prohibited.
The above statement makes it clear that such provision will be deemed to constitute a redemption agreement and will be prohibited.