According to Mr. Bart Suchomski, investors need to exercise caution when considering EB-5 capital redeployment options.
Mr. Bart Suchomski is the Vice President of CanAm’s overseas operations in Southeast Asia, responsible for introducing new CanAm investment opportunities and supporting business development activities in Vietnam and South Korea.
According to him, Vietnam is among the top three EB-5 investment markets in Southeast Asia; therefore, EB-5 capital redeployment has become a major concern for investors.
– Sir, what is EB-5 capital redeployment?
– EB-5 capital redeployment is the reinvestment of all or part of the capital after the initial EB-5 investment has been repaid or liquidated. According to the U.S. Citizenship and Immigration Services (USCIS) Policy Manual, any invested capital that has been repaid must be reinvested or redeployed into another investment. The purpose is to maintain the “at-risk” status of their capital by placing it with a qualified new commercial enterprise for reinvestment until the I-829 petition is filed.
– Why do EB-5 investors need to redeploy their capital?
– Due to extended processing times, which currently range from 29 to 45 months, it is expected that for Vietnamese investors whose I-526 petitions have just been approved or are pending, the EB-5 investment capital may be repaid.
USCIS mandates that capital remains at risk. Therefore, throughout the two-year conditional residency period until the I-829 petition is filed, the repaid capital must be redeployed to satisfy this requirement for the I-829 petition.
– What should investors consider when choosing sectors for EB-5 redeployment?
– At the time many investors first filed their I-526 petitions, USCIS had not yet issued guidance on redeployment. Therefore, investors need to ask whether the approved I-526 petition allows for the redeployment of EB-5 capital into another investment, or if such redeployment requires re-approval from the beginning.
CanAm’s offering documents always allow its limited partners to make investments beyond the initial EB-5 investment. This is based on the acquisition of equity securities, other equity interests, loans, and votes by the limited partners. USCIS has approved these terms, and they will be maintained during the review of I-526 petitions from CanAm investors.
Investors should also pay attention to the projected redeployment options of the regional center within EB-5 limited partnerships that include investors from China, India, Vietnam, etc., as each agreement contains different terms.
– What should investors keep in mind if they are interested in an EB-5 project outside of CanAm?
– Some believe that redeploying into another EB-5 project is safer because those are the terms approved in the I-526 petition, but USCIS does not require repaid capital to be redeployed into another EB-5 project.
Because EB-5 projects must be “job-creating” projects, they tend to carry risks related to construction and various other specific operational risks.
CanAm investors have already created the required number of jobs with their initial EB-5 investment; therefore, there is no need to take on further risk during the investment redeployment. CanAm always strives to introduce market-rate investment projects for investors requiring redeployment.
CanAm’s redeployment solutions offer opportunities for high returns with lower risk than the initial EB-5 investment while still meeting USCIS redeployment requirements to achieve the investor’s immigration goals. CanAm is not interested in locking up EB-5 capital for unnecessarily long periods to benefit from fee collection.
– How do CanAm Enterprises EB-5 investors benefit from capital redeployment?
– Any redeployment option will be presented in a disclosure document, detailing the opportunities and allowing all investors to vote on redeploying the repaid capital into that enterprise.
Investors who have maintained their investment throughout the two-year conditional residency period will have their capital returned. The remaining investors who need to redeploy will have the opportunity to choose the form that best suits their needs until they are eligible for capital repayment.
– How does CanAm ensure the residency goals of EB-5 investors?
– The USCIS Policy Manual currently stipulates two acceptable areas for redeployment investment: another construction project or newly issued municipal bonds.
EB-5 investors can have their capital returned after the I-829 petition is filed with USCIS. CanAm structures redeployment options that take into account the different redeployment timelines of each investor, minimizing unnecessary risk in a long-term investment that could last several years beyond their I-829 filing date.
– What advice do you have for Vietnamese EB-5 investors?
– As with any investment, EB-5 investors should perform in-depth due diligence to assess the suitability of redeployment options, specifically the timeframe, risk level, and expected returns.
