Recent USCIS statistics highlight importance of best practices
Last week we posted the USCIS statistics and while on the surface these may appear to be relatively small changes, the fact is that the denial rate has increased on both I-526′s and I-829′s for first time ever on a year over year basis. Perhaps even more significant is that the 79% I-526 approval rate in 2012 to date is down from the 89% I-526 approval rate in 2010! A significant change in just 2 years and a strong reminder to all in the EB–5 ecosystem to embrace best practices that protect investors wherever possible and ultimately protect the integrity of the whole EB-5 program. We are off to a good start with the industry leadership provided by IIUSA which has formed a best practices committee that is actively working to establish and promote best practices in all areas of the EB-5 ecosystem.
From an NES Financial perspective it is encouraging to see that despite there being no legal requirement to do so, the use of escrow during the capital raise process is a best practice that is increasingly being used by Regional Centers. More specifically using escrow and holding investor funds until I-526 approval is a model that is continuing to grow in its adoption. In light of the current lengthy USCIS approval times and the pressures that Regional Centers are under to get funds into projects to begin to create jobs, holding funds in escrow until I-526 approval is a very positive trend to see because it provides the highest level of funds security and transparency for investors. At NESF we have noticed a marked trend between projects considered to be of similar quality: the projects with the highest level of funds security and transparency for the investors complete the capital raise the fastest.
Commitments to transparency, security of funds, and compliance with regulations are the tenants to a good best practices effort, and are guiding principles that should be foremost for all providers of services to the EB-5 industry. While there may be outside pressures to make trade-offs for other business reasons, standing firm to these guiding principles is always the right thing to do and in the end will result in a more successful industry with higher growth and success for all.
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