With the September 30th grandfathering deadline less than three months away, prospective EB-5 investors looking to take advantage of the protections of the clause will need to move quickly. However, moving quickly cannot come at the expense of making unsound decisions or submitting incomplete applications.
The grandfather clause, which is contained in the EB-5 Reform and Integrity Act of 2022 (RIA), states that an investor who submits their I-526E petition on or before September 30, 2026, is entitled to full participating in the EB-5 program even if the program is not reauthorized by September 30, 2027. To take advantage of these significant protections, investors should could consider the following items as they prepare to move forward in the coming months.
Begin Your Source of Funds Documentation Immediately
For many investors, the greatest challenge is not selecting an EB-5 project, it is documenting the lawful source and path of their investment funds. Depending on how the capital was accumulated, this process may require collecting years of tax returns, business records, employment documentation, real estate sale agreements, inheritance records, gift documentation, bank statements, or loan documents.
International document collection often takes much longer than expected. Financial institutions may require several weeks to produce historical records, and obtaining certified translations or government documents can add additional delays. Beginning the source of funds process as early as possible gives immigration counsel sufficient time to identify any evidentiary gaps before the petition is filed.
Time to Select the Right Project
Selecting an EB-5 project is one of the most important decisions an investor will make, and it should not be rushed simply to meet a filing deadline. Every project comes with a substantial package of documents, including the private placement memorandum, subscription agreement, operating agreement, business plan, economic impact report, and other disclosures, that should be carefully reviewed with the assistance of experienced immigration, securities, and, where appropriate, financial advisors. Investors need sufficient time to understand the project’s structure, financing, job creation methodology, repayment strategy, and potential risks before making an investment decision.
Equally important, investors should have a clear understanding of what they are looking for in an EB-5 project before they begin their search. Some investors prioritize immigration security and a conservative capital structure, while others focus on collateral, developer experience, personal guarantees, project location, or expected repayment timing. Taking the time to identify these priorities and compare multiple opportunities can lead to a more informed investment decision. Beginning the evaluation process well before the September 30 deadline allows investors to complete thorough due diligence without feeling pressured to commit to a project simply because time is running out.
Coordinate Your Entire Professional Team Early
A successful EB-5 filing requires coordination among several professionals, including immigration counsel, project representatives, fund administrators, accountants, banks, and sometimes foreign legal advisors.
As the filing deadline approaches, each of these professionals is likely to experience a substantial increase in workload. Waiting until September to begin assembling the team may create scheduling bottlenecks that could delay the filing. Investors who engage their advisors early are generally better positioned to resolve issues before they become time sensitive.
The weeks leading up to September 30 are likely to be among the busiest periods the EB-5 industry has experienced in recent years. Investors who begin preparing now, by organizing their source of funds documentation, selecting a well-prepared project, coordinating with experienced advisors, and allowing adequate time for petition preparation—will be far better positioned to benefit from the protections provided by the EB-5 Reform and Integrity Act.
