In a June 14, 2017 policy alert, USCIS updated its Policy Manual to provide further guidance regarding capital at risk requirements. Pursuant to the most recent Volume 6 of the Policy Manual, USCIS has confirmed and clarified that an EB-5 investor’s funds must sustain his or her investment “at risk” throughout the two-year conditional permanent residence period to be eligible to have the condition on permanent residence removed. The Policy Manual also clarifies that further deployment of an investor’s capital may be used to meet the capital at risk requirement under certain circumstances. Given the extended backlogs for mainland-China and Vietnam-born investors, redeployment has become an inevitable reality as the initial investment project is oftentimes completed and the loan repaid from the job creating enterprise (JCE) to the new commercial enterprise (NCE) before visa numbers are available to the investors. Therefore, to continue to satisfy the “at risk” requirement through the end of the two-year conditional permanent residence period, investors’ funds paid back to the NCE cannot sit idly in the NCE’s bank account, but need to be redeployed in a new investment. Given this reality, many projects have announced or will be announcing the news of capital redeployment. Below is a non-exhaustive list of the top 10 items we believe investors should consider when their projects announce redeployment:

1. Whether the business plan has been followed through for the initial investment as outlined in the EB-5 business plan filed in the I-526 Petition – check the status of the project and make sure the project has moved forward as outlined in the I-526 Petition materials;

2. Whether the required number of jobs have been created by the initial investment based on the economic methodologies in the Economic Report;

3. Whether the EB-5 money has been expensed in accordance with the original business plan for the initial investment. The EB-5 funds should be used in accordance with the original business plan and the EB-5 loan agreement (or pertinent equity documents);

4. Whether the new investment (redeployment) is consistent with the scope of the NCE’s ongoing business;

5. Whether the proposed new investment satisfies the at risk requirement – the investment funds must be placed at risk (but not necessarily to the same extent of the initial investment), and no guarantees of repayment can be made directly to the investor:

   1. Treasuries may not be considered at risk

   2. USCIS has stated that certain new issue municipal bonds, such as for infrastructure spending, can be at risk as long as investments into such bonds are within the scope of the NCE in existence at the time Investor filed I-526;

   3. If the NCE was to loan pooled investments to a JCE for the construction of a residential building, the NCE, upon repayment of a loan resulted in the required job creation, may further deploy the repaid capital into one or more similar loans to other projects;

6. Whether the investment funds will be deployed by the NCE within a commercially reasonable time following repayment of the initial EB-5 loan. USCIS has failed to define “commercially reasonable time,” but generally a reasonable due diligence period should be fine;

7. Whether the redeployment would cover the period of the investor’s two-year period of conditional permanent residence;

8. Investor must not withdraw investment funds from the NCE prior to expiration of the two-year conditional permanent resident card, and filing of the I-829 petition, otherwise I-829 petition would be denied;

9. Whether the corporate documents would require a vote of investors to move forward with a redeployment;

10. Whether the other investors may affect or block the redeployment of investors who must continue to meet the at risk requirement.

The considerations outlined above should inform investors of the unfamiliar terrain of capital redeployment and help them understand how redeployment contributes to/affects their attainment of permanent resident cards. However, while USCIS has acknowledged that redeployment may be an option to ensure investments continue to satisfy “at risk” requirement, the Policy Manual lacks clear or detailed guidance on redeployment of EB-5 investment. On April 9, IIUSA sent a memo to USCIS outlining the industry’s concerns and specific areas of needed clarification or changes to USCIS’s redeployment policy.