While it is not required, many foreign investors will choose to use an EB-5 escrow account to transfer the initial amount of funds to their California business.
An escrow account is an interest-bearing bank account. This type of account is typically used to keep large amounts of money for sales of real estate, property, and businesses secure until all transactions are complete. In the case of an EB-5 investment, the business or regional center establishes the escrow account and the investor transfers the required amount of funds. The money is held in the account until official notification from USCIS that the petition has been approved, at which time the investment funds are disbursed to business or project.
In order to hold your EB-5 funds in an escrow account, you must ensure that:
- It is stated in the escrow agreement that the entire amount of required capital will be committed to the regional center or new commercial enterprise, and that funds will be immediately disbursed upon approval of the investor’s EB-5 petition.
- The bank or financial institution where the account is established must have no relationship to the immigrant, the new commercial enterprise, regional center or their affiliates.
- The escrow agreement should specify that the investor’s money will be returned if his EB-5 petition is denied or withdrawn.
Unfortunately, there are many disreputable third-parties that will offer escrow services to immigrants under false pretenses. Our EB-5 attorneys in San Francisco can help protect your investment even before it begins. Call the Law Offices of Vaughan de Kirby today at (415) 221-2345 for more information, or order our FREE guide, Investor's Path to a Green Card: How Investing in America Can Put You and Your Family on the Path to Greater Wealth and U.S. Permanent Residency.