Last week, FirstPathway Partners CEO and Chairman Robert Kraft was featured by Korea Business News. In the article, Jinhee Wilde - one of the most experienced immigration policy lawyers voted TOP 25 in the U.S. and a member of the IIUSA Leadership Council and President’s Advisory Council - summed up the Immigration Bureau's policy manual on capital redeployment, which is currently the most important issue for EB-5 investment migration.
On June 14, 2017, the Immigration Bureau issued a revised Policy Manual Volume 6 with regard to EB-5 investors. The policy clarifies the definition of ‘sustainment period' which is the period of conditional permanent residence (the two-year validity period listed on the card). This could be interpreted as the ability for investors to receive their investment back even if I-829 is pending with the Immigration Bureau after the two-year conditional permanent residence period has expired.
However, given the growing backlog in China and Vietnam today and the possibility of a backlog in India, Brazil, and Korea, investors do not meet the long-term requirements for principal withdrawal until conditional permanent residency. The Immigration Bureau's Policy Manual stipulates that the investment funds should be maintained 'at risk'. For an investment to remain 'at risk', it must involve the risk of loss and the potential for return. Nevertheless, the policy manual classifies 'at risk' into two categories: before job creation conditions have been met and after job creation conditions have been met. Before the conditions for job creation are met, the entire amount of investment should be 'invested in projects that are most closely related to the creation of jobs upon which the EB-5 eligibility is based'.
Until two or three years ago, redeployment of investment funds (reinvestment) was not considered by the investment immigration industry. And many, if not most, regional centers would not have established the NCE with regard to the requirements for redeployment (reinvestment). Thus, without specific provisions on the extent to which the reinvestment is allowed, the policy manual in question is silent as to whether the redeployment should take place within the original project, Reginal Center, or TEA.
If the scope of the NCE's business has changed since I-526 receipt, redeployment of an investment made through loans, to areas similar to the modified projects may be considered 'material changes' and therefore do not be meet the statutory requirements. 'Realistic changes' before the acquisition of conditional permanent residence may be rejected or approved. Furthermore, the policy manual does not clearly specify a 'commercially reasonable period'. However, in the context of job creation required for I-829 approval, a 'reasonable period' is one year (less than three years after the acquisition of conditional permanent residence).
With respect to whether the redeployment (reinvestment) is within the scope of the NCE, an investor may need to review the operating agreement that describes the 'purpose' or 'authority' granted to the NCE to see if the redeployment meets the project requirements. Investors also should consult the guidance of the National Trade Association for Investment in the EB-5 Regional Center Program (IIUSA), or listen to experts who want to protect investors in addition to the project or regional center.
Bob Kraft, chairman of IIUSA who made a surprise visit to Korea on August 6, stated “This policy manual was issued over a year ago, but there is no exact guidance on the real of capital redeployment (reinvestment) for the industry. IIUSA said it is working to provide guidance to the EB5 industry in order to set industry standards and ensure integrity and sustainability for the EB-5 program.”
Attorney, Jinhee Wilde, plans to introduce the administration's direction on investment redeployment and her recommendations for the EB-5 program at the Thomas & Amkor seminar on Sunday, September 9. Officials of IIUSA are scheduled to visit Seoul this September and will hold the first ever EB-5 Global Banquet in Korea. The banquet will be open to all industry stakeholders and will promote harmony among industry leaders through educational panels, networking, and business development. It will be a great opportunity for EB-5 officials in Korea to learn from IIUSA. The banquet will be held at the JW Marriott Hotel in Seoul from 6 p.m. to 10 p.m. on September 13, 2018.
About IIUSA
Founded in 2005, IIUSA is the national non-profit organization for the EB-5 Regional Center program, with a mission of advocacy, education, industry development, and research. IIUSA represents a variety of stakeholders collectively representing large and small projects, urban and rural economic development, and industry sectors ranging from real estate and manufacturing to energy and infrastructure. IIUSA also represents 240 Regional Centers and 180 Associate Members. IIUSA’s members are engines of economic growth and job creation, accounting for a vast majority of capital flowing through the Program.
Founded in 2005, IIUSA is the national non-profit organization for the EB-5 Regional Center program, with a mission of advocacy, education, industry development, and research. IIUSA represents a variety of stakeholders collectively representing large and small projects, urban and rural economic development, and industry sectors ranging from real estate and manufacturing to energy and infrastructure. IIUSA also represents 240 Regional Centers and 180 Associate Members. IIUSA’s members are engines of economic growth and job creation, accounting for a vast majority of capital flowing through the Program.
Founded in 1999, KEB has evolved into a leading securities and broadcasting company in Korea, leading the smart media era. Over the past decade, KEB has been devoted to the three values of 'democratization of information - popularization of investment - internationalization of the market'. Beyond the cable broadcasting, KEB has expanded into a global media - making news available to worldwide viewers and providing high-quality securities and economic content in a rapidly changing media environment.