'At Risk’ Requirement

EB-5 ‘At Risk’ Requirement and Sustainment Period

EB-5 investment capital must be “at risk” in an investment with a “risk for loss and a chance for gain.”

There can be no guaranteed returns of any portion of the EB-5 capital. Further, the investor may not be guaranteed “the right to eventual ownership or use of a particular asset in consideration of the investor’s contribution of capital into the new commercial enterprise.”

Purchasing a share of a business from an existing shareholder does not qualify as an at-risk investment as the payment goes to the shareholder and not to the new commercial enterprise.

Sustainment period

EB-5 capital must be sustained at risk for a required period of time. The EB-5 Reform and Integrity Act of 2022 (RIA) maintains the pre-RIA sustainment period for pre-RIA investors and changes the sustainment requirements for post-RIA investors.

Investors who filed their I-526 petition prior to the enactment of the RIA on March 15, 2022, must keep sustaining their investment in the new commercial enterprise until the end of the two-year conditional residency period.

Investors who filed their I-526 or I-526E after the enactment of the RIA must keep their investment sustained for “not less than two years”; the new regulations seem to imply that post-RIA investors may receive the return of their capital after being invested for two years even if the investors have not completed a conditional permanent residency or even if the investor’s I-526 or I-526E is adjudicated. This is a significant advantage for new investors.

Recently added articles

Your Complete EB-5 Resource