Is USCIS Cracking Down on Single-Intermediary Currency Swaps from China?

The Chinese government restricts the amount of capital that any one citizen may transfer out of the country to 50,000 USD (or equivalent) per annum. This presents a challenge to the thousands of Chinese applicants who begin the EB-5 process each year. Due to this restriction on transferring money out of China, investors commonly rely on two options to exchange renminbi (“RMB”) funds to U.S. dollars, and transfer to the U.S.: the friends-and-family method and the single-intermediary currency swap.

With the current EB-5 investment minimum set at ten times this annual limit, how does one assemble and transfer the funds necessary to begin an EB-5 campaign? One popular method is known as a “single-intermediary currency swap,” whereby the investor transfers (RMB) to a third-party account in China, and the third party then wires the USD equivalent from an overseas account (most commonly located in Hong Kong) to the investor’s USD account.

However, as Karuna Chandani Simbeck explains in this week’s featured article, USCIS may have changed their stance on the acceptability of this practice: after years of approving applications which employed a single-intermediary exchange, they’ve now begun issuing Requests for Evidence to prove a lawful path of funds.

Given USCIS’s apparent change in interpretation regarding the single-intermediary currency swap, there is a pressing need to innovate in lawfully transferring EB-5 funds from Chinese investors to their NCEs. One possible option would be to develop methodology by which RMB funds remain in mainland China — as in the current single-intermediary system — but the USD invested in the NCE is nevertheless considered a lawful source of funds.

Read the article: “Path of Funds: It’s Complicated

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RIA: EB-5 Industry Experts Help You Prepare for New Changes

A event co-hosted by JTC Americas and Saul Ewing Artnstein & Lehr LLP
Wednesday, November 9, 2022
8:00 am — 7:00 pm EST

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Join JTC Americas and Saul Ewing Arnstein & Lehr LLP in Miami for an exclusive and complimentary in-person networking and industry event focused on the new EB-5 program changes!

This event offers the opportunity to hear from, and interact with, many EB-5 industry leaders. They’ll provide valuable information and answer your questions on navigating the new EB-5 legislation. In addition to lending critical insight into these pressing matters, the seminar will also offer a chance to connect and network with your industry peers. 

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