Effective June 9, 2017, EB-5 applications must use the new version of Form I-526. The new form reflects measures taken by USCIS to improve the transparency and integrity of EB-5 applications. The application has expanded from the previous 3 pages to 13 pages, significantly increasing the amount of important information required regarding investors and regional centers.
The following are 7 key features of the new I-526 application form:
Requirement to provide 5 years of employment history and 5 years of residential addresses
This information was previously only required on Form DS-260 or G-325A after the I-526 was approved, but USCIS now requires it at the I-526 application stage. Applicants must ensure that the information provided on the I-526 form is consistent with information provided in their previous U.S. visa applications, as well as with the information provided in their source of funds documentation.
Investment category and required investment amount
Question 7 asks whether the investment project is located in an "Upward Adjustment Area," a term for which USCIS has not yet provided a precise definition. The new form also requires applicants to select whether the New Commercial Enterprise (NCE) and the Job Creating Entity (JCE) are located in a rural area or a Targeted Employment Area (TEA).
Applicant's income and net worth
The new form requires applicants to fill in the investment type. Some believe this question is actually intended to confirm whether the NCE is a "troubled business," but the sub-heading in the form is "Your Investment and Income," indicating it is asking for investor information. Additionally, applicants must provide their total income, net income, and net worth at the time of investment. For many applicants, this information is not necessary to establish the lawful source of their investment funds.
Composition of the investment funds
This section is perhaps the most confusing part of the new form, as it requires applicants to specify the composition of their investment funds. USCIS's definition of "capital" was already puzzling, and this further complicates the issue. While most investors invest in cash (Part 2, Box 9), according to current USCIS interpretations, this cash could be in the form of a loan (Box 12) or equity (Box 13). Furthermore, there is an option to list the value of assets transferred from overseas to the United States, but no option for the value of assets already within the United States (Box 11).
Source of investment funds
The new form requires applicants to state the source of their funds. "Loan" is listed as an option here as well, but there is currently much debate in the industry regarding whether investment funds constitute a loan. The varying definitions of "loan" create a dilemma for applicants on how to select the source of investment funds on the form.
Information regarding the NCE
Applicants must list all shareholders of the NCE and their respective ownership percentages, as well as whether these shareholders are applying for EB-5. However, this information changes frequently, which adds difficulty to completing the form.
Funds from non-EB-5 investors
This question does not account for the fact that project capital may be raised through loans or other financing methods, nor does it clarify whether it refers to the capital of the NCE, the JCE, or both.
We hope that this new form will help USCIS expedite the processing of I-526 applications and increase the transparency of EB-5 investment immigration. This form represents a major step toward reform, and its positive impact should be acknowledged. However, the cumbersome new questions added to the form are a significant burden for both applicants and project developers. Furthermore, due to the ambiguity of certain questions, what are the consequences if an applicant provides incorrect information? Applicants, project developers, and attorneys must carefully review the information entered on the form, as any inaccurate or contradictory information could lead to serious consequences.