On June 25th, NES Financial hosted the latest in its series of EB-5 Success Strategies Webinars. The theme was “Preparing for the I-829 Bubble.” Leading industry experts Jeffrey Carr of Economic and Policy Resources, Inc., Ronald Klasko of Klasko, Rulon, Stock & Seltzer, LLP, and Reid Thomas of NES Financial discussed the factors leading up to the impending surge in I-829 filings and strategies for success.
Here were the most commonly asked questions with answers.
1. In terms of the conditional residency period, when does it start, when does it end, etc.?
The first step in the process is of course approval of the I-526. After the investor receives approval and passes his/her conditional immigrant visa interview, they have 6 months to actually enter the United States. Regional Centers and developers must then work with the immigrant’s attorney to track the actual date the investor enters the country, which will be different for each one. This is crucial because the I-829 petition must be filed 21-24 months from that date. Filing closer to the 21-month mark is preferable, because it usually takes 9-12 months to receive I-829 approval, and all of the conditional residency restrictions remain in effect until approval is granted.
2. Explain the delineation, use, and overlap between immigration direct/indirect jobs and economic direct/indirect/induced jobs.
The immigration definition of a direct job by regulation is very clear—a direct job must be a “position” that is held by a W-2 employee of the New Commercial Enterprise (NCE) or a wholly-owned subsidiary of the NCE. If the new position is not held by a W-2 employee of the NCE or a wholly-owned subsidiary of the NCE, it is therefore an indirect job under the immigration job definition (induced jobs are a subset of indirect jobs and are the result of the income effects related to the project’s job impacts.)
The above immigration definitions have no relationship to the economist’s definition of direct and indirect jobs. Economist’s definitions are based on regional economic theory. An economist looks at the definition of direct jobs and indirect jobs based on their relationship to the “change in final demand”—such as new hiring at a business or new investment expenditures. Direct jobs from an economic theory standpoint are those jobs that are first-order employment impacts, such a direct hires at a hotel or the construction workers that are “onsite” for a construction project.
While it is likely that nearly all EB-5 projects have jobs that are 100% indirect for immigration purposes, an EB-5 project that includes only construction activity jobs with a construction timeline of 24 months or longer can have a 100% immigration indirect job profile. For a project that uses only construction activity jobs with a construction timeline of under 24 months, it is likely that the EB-5 project has a job profile that is 100% immigration indirect and 100% economically indirect jobs. If you use operations jobs as part of your EB-5 program job benefits request, then you will always have at least some economically direct jobs—even if all jobs are indirect for immigration purposes.
3. Are most Regional Centers utilizing their own immigration attorneys to process I-526s and I-829s for investors? Or are the investors bringing in their own immigration attorneys to the task?
To our knowledge, almost all Regional Centers or developers use their own attorneys to prepare, or at least review, the I-526 and I-829. Most Regional Centers allow investors to use their own attorneys when actually filing the I-526s and I-829s.
4. When can the NES Financial EB-5 Fund Administration solution be implemented? Is it for exclusive use by Regional Center projects?
From a technical perspective, NES Financial’s EB-5 Fund Administration solution can be implemented at any point during a project, regardless of whether it’s a direct or Regional Center project. For projects that are already launched, the solution would need to be overlaid with the existing infrastructure, and there may be some setup work to load historical data. A project doesn’t have to be using escrow or one of our existing banking partners to be able to implement the EB-5 Fund Administration solution.
NES Financial welcomes your questions and opinions. Allow us to address your business needs by contacting us. We look forward to hearing from you!