Switching EB-5 Projects After Filing I-526: Is it Possible?

The EB-5 Immigrant Investor Program offers a path to U.S. permanent residency through investment in commercial enterprises. A critical juncture for many investors is the period after filing Form I-526 (Immigrant Petition by Alien Entrepreneur) but before receiving approval. A frequent and complex question arises: can an investor switch their EB-5 project during this interim phase?

Understanding the I-526 Filing Requirement

When an I-526 petition is filed, it is intrinsically tied to the specific New Commercial Enterprise (NCE) and the source of funds used for the investment. USCIS reviews the petition based on the facts presented at the time of filing.

The Principle of Material Change

Switching projects fundamentally constitutes a material change to the petition. USCIS policy generally requires that any material change to the basis of the petition must be reported, and often requires a new petition or an amendment, depending on the nature of the change.

Implications for an Active I-526

If an investor attempts to move their committed capital from Project A to Project B after filing I-526 for Project A, the following scenarios are typically considered:

• Withdrawal of Funds: If the capital is withdrawn from Project A before I-526 approval, Project A may no longer meet the job creation or investment requirements as originally proposed in the petition.
• Re-investment: The new investment in Project B must itself meet all EB-5 criteria, including demonstrating that the funds are irrevocably committed.

Methods of Project Switching Post-I-526 Filing

While direct 'switching' is legally precarious, investors might explore specific procedural avenues, depending on the status of the original investment and the stage of adjudication.

1. Withdrawal and Refiling (The Safer Route)

The most secure, albeit time-consuming, method is to formally withdraw the pending I-526 petition associated with Project A and file a completely new I-526 petition for Project B. This requires:

1. Ensuring the original investment funds are properly returned (if applicable).
2. Demonstrating the source of funds is still valid for the new investment.
3. Proving the new investment in Project B meets all current EB-5 regulations (e.g., job creation timelines).

Caution: Withdrawing an I-526 means forfeiting the priority date associated with that filing, potentially leading to significant delays if regulations change.

2. Investment within a Regional Center Structure

If the initial investment was made through a Regional Center (RC), the situation might be slightly different, though still complex. If Project A is terminated or significantly altered, the RC must notify USCIS. The investor’s ability to move to a different investment sponsored by the same RC is often governed by the specific operating agreements and USCIS guidance on continuity of investment.

In many cases, even within the same RC, moving the capital to a completely different underlying enterprise requires careful legal navigation to ensure the "at-risk" requirement is continuously satisfied.

The Impact on "At-Risk" Capital

The core challenge of switching projects is maintaining the status of the investment as "unconditionally required" and "at-risk" throughout the process. If funds are moved prematurely or improperly documented:

• USCIS may argue the investment was never truly committed to the first project.
• The job creation projections for the first project become invalid.

Legal counsel is essential to structure any transition so that the funds are demonstrably at risk for the *new* venture, satisfying the requirements of 8 CFR § 204.6(k)(2).

Conclusion

Switching EB-5 projects after filing Form I-526 is not straightforward and carries significant risk of denial if handled improperly. It generally requires treating the move as a material change, often necessitating the withdrawal of the pending petition and filing a new I-526 for the new enterprise. Investors contemplating such a switch must prioritize legal counsel experienced in both the original and the proposed new investment structure to protect their priority date and investment capital.