EB-5 regulations require rigorous accounting of project expenditures. It’s important to keep an easily-accessible record of spending throughout your entire project in the case of an RFE (request for evidence) from USCIS and to support each investor’s I-829 petition.
At PRXY, you can upload all spending, both EB-5 and non-EB5, to the Drawdowns & Spending Tab after logging into pryxco.com. To approve a drawdown, PRXY needs supporting proof that matches the amount and purpose of the draw request.
The below is general guidance on documentation that is considered acceptable for documenting project-related expenditures.
What is USCIS looking for?
USCIS requires evidence that invested capital was actually deployed to the entity most responsible for creating jobs (the “Job Creating Entity” or “JCE”). Accordingly, all project-related spending described in the business plan, whether EB5 or Non-EB5, must be tracked and documented in order for investors to be credited with all of the jobs created as a result of completing the project. The documentation must show:
- The expense occurred or is due, and
- Nexus to the project. Documents must show the expenditure is:
- Project-specific (i.e. bills and expenses pertain to the correct entities in the corporate documents and offering documents)
- necessary for development or operations
- consistent with the business plan/JCE activities (i.e. identified in the budget)
- If using EB-5 funds, the expense is directly tied to a budget line-item as outlined in the project’s business plan and economic report and is supported by documentation showing the need to draw down a specific amount to cover the payable.
- A clean audit trail. In general, expenses should have:
- source document → proof of payment → tie to budget line-item
Expenditures that may not be paid/repaid with EB-5 Capital
- Attorney fees to draw up EB-5 documents
- Payments of EB5 loan interest or EB5 investment returns to the NCE derived from the EB5 capital itself
- PRXY onboarding, subscription, or storage fees