Money and structure
Escrow
Also called escrow account, escrow agreement, release trigger, tài khoản escrow.
Escrow in EB-5 is an arrangement under which an investor's subscription money is held in a designated account under a written escrow agreement and released to the new commercial enterprise only when a stated trigger occurs, rather than passing to the enterprise on subscription.
What it decides
USCIS permits an investor's money to be held in escrow until the investor obtains conditional permanent resident status, but only where the immediate and irrevocable release of the escrowed funds is contingent on nothing beyond two things: approval of the petition for classification under INA 203(b)(5), meaning Form I-526 or I-526E, and either visa issuance and admission to the United States as a conditional permanent resident or approval of Form I-485 (6 USCIS-PM G.2(A)(2)). Escrow does not sit outside the account rules the RIA added. 8 U.S.C. 1153(b)(5)(Q)(i) requires the new commercial enterprise to deposit and maintain each investor's capital in a separate account, "including amounts held in escrow", and (Q)(ii) lets money leave that account only to another separate account or a job creating entity, into the capital investment project it was intended for, or back to the investor who contributed it as a refund. Unless the requirement is waived under (Q)(v), an independent fund administrator cosigns every separate account and must verify and approve each transfer before it happens, under (Q)(iv). Whether release comes on filing of the petition or on approval, and whether money returns if the petition fails, is set by the offering and escrow documents rather than by USCIS. Timing carries a consequence for the two year investment period in 8 U.S.C. 1153(b)(5)(A)(i). For petitions filed on or after 15 March 2022, USCIS starts that period on the date the capital was contributed to the new commercial enterprise and placed at risk, which includes being made available to the business most closely responsible for creating the jobs, so capital still sitting in escrow has not started it. For petitions filed before that date the period is instead the two years of conditional permanent residence under 8 CFR 216.6(c)(1)(iii), and escrow release timing does not move it.
Where this is explained properly
Pages here that go into escrow rather than mentioning it.
Related terms
- Sustainment periodThe period an EB-5 investor's capital must stay invested. For a petition filed on or after 15 March 2022 it is two years, and USCIS counts it from the date the capital was contributed to the new commercial enterprise and placed at risk, not from admission as a conditional resident. For a petition filed before that date it is instead the two years of conditional permanent residence.
- Administrative feeA charge the investor pays to the new commercial enterprise, its manager or the regional center on top of the qualifying investment, covering offering, marketing and management costs. No immigration statute or regulation sets or caps the amount, and it does not count toward the $800,000 or $1,050,000.
- Capital at riskThe rule that the investor's required capital must be genuinely exposed to loss, with a real chance of gain, and not shielded by a guaranteed return or by any contractual right to repayment.
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