Breaking Escrow in advance of an EB-5 Draw

An overview of the steps you need to take to break escrow and move capital to the NCE EB-5 Account in advance of a Draw to the JCE. 

Step 1: Prepare to Break Escrow

Before you begin the process to move funds, there are a few administrative steps you must complete. 

1. Add banking details – bank name and last 4 digits of the account number – to the PRXY Portal. If your project is started, reach out to support@prxyco.com and we’ll take care of this for you.  
2. If you are not using a PRXY Partner Bank, confirm that PRXY is a co-signatory on the Escrow Account. Reach out to your bank to confirm or complete this step. 
3. Ensure you have all investor documentation uploaded to each investor’s profile in the PRXY Portal. In addition, you must include a copy of the I-526E Receipt Notice (I-797C) or the alternative options outlined in your project documents, when such documentation becomes available. 
4. Ensure that you have met all of the conditions to release funds set forth in your escrow agreement (e.g. Filing your I-956F with USCIS, the Regional Center Good Standing Requirement, etc.) 
5. Review your project documents to understand any additional limitations. For example, some projects require that you move the full $800,000 investment rather than a partial amount or that you have subscribed a minimum number of investors.
6. If you collect an administrative fee, that amount cannot be included in the amount sent to the NCE EB-5 Segregated Account. 

Step 2: Fill out the Written Direction or Disbursement Form

An important step in breaking escrow (and the reason PRXY must be a co-signatory) is to fill out the Written Direction/Disbursement Form and have PRXY sign it. Here’s how: 

1. Find the appropriate form in your Escrow Agreement. It’s usually Exhibit D to the Escrow Agreement and is typically called either ‘Written Direction’ or ‘Disbursement’ Form.
2. Confirm it includes a line for PRXY Fund Services, LLC to sign on and there is space for PRXY’s signature.
3. Fill it out with all relevant information and add the date that you plan to send it to PRXY and the bank. Note that this must be during banking hours. The Written Direction/Disbursement Request must be in final form (i.e. no brackets or highlighted text) and signed by the Issuer and Subscriber Representative, if applicable.

Step 3: Send the filled out form to PRXY

As co-signatories, PRXY must also sign this form. Here’s how to get it to us: 

1. Email the form to PRXY for signing, specifically including Aaron and Clem, their email addresses are below. Please include the name of the investor in the body of the email:
   1. clem@prxyco.com
   2. aaron@prxyco.com
   3. Note: you may also include your banking contact, if you choose. We will simply follow up on the same thread. If you do not, we will send the signed form to your team only.
2. A member of our team will confirm that all investor documentation is in the PRXY portal and that the escrow release conditions have been met and return the signed form to you, including any others cc’ed. 

Step 4: Send the filled out form to the bank

At this stage, you are formally ready to request escrow be broken and move funds to the NCE.

1. Draft an email addressed to the bank. It should include the Investor’s name in the body of the request. 
2. Attach the following documents: 
   1. The signed Written Direction/Disbursement Form
   2. Investor's Valid Passport (also for any remitters who sent funds on the investor’s behalf, along with their relationship to the investor, if applicable)
   3. W-8BEN or W9
   4. Fully executed Subscription Agreement
   5. Investor Questionnaire
   6. Signed Escrow Acknowledgement
   7. For Minor Investors, Investor’s birth certificate along with certified English translation (if applicable), Parental Consent signed, at least a Passport for one of the Parents.

A few things to remember: 

• This process – dated, signed by PRXY, and emailed to the bank – must be completed within three to five (3-5) days. Make sure to complete Step 1 above in full so you do not need to update the date and resend the form. 
• This process must be completed before banks close. If the bank receives it after banking hours, funds will be released the following business day. Typically, banks do not process escrow releases after 4pm EST.
• The bank may have additional questions or requests prior to releasing escrowed funds.  Please be responsive, as banks have their own compliance personnel and procedures.
• If PRXY or the bank is closed for a holiday, it’s best to wait until all parties are open. See the PRXY Support and Holiday Schedule to confirm. 

What happens next 

Generally, you will initiate the wire transfer from Escrow to the NCE EB-5 Segregated Account. The bank will follow up with a confirmation, or may issue a paper receipt.

If you have any questions about this process, please reach out to support@prxyco.com.