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Can a new commercial enterprise (NCE) be a charitable organization?

In the EB-5 program, a new commercial enterprise (NCE) is strictly defined as a for-profit entity that was created or restructured after November 29, 1990. Therefore, an NCE cannot be a nonprofit. Even though most EB-5 investments are made in new commercial enterprises (NCEs), investors can also choose to invest in troubled businesses. In these cases, EB-5 investors can either preserve or create new jobs.

Nonprofits may still be able to participate in the EB-5 program in other ways. For example, they could cooperate with a for-profit entity or obtain regional center designation.

A regional center is any economic unit that promotes economic development, employment creation, regional productivity, and capital investment. To obtain regional center designation from United States Citizenship and Immigration Services (USCIS), an entity must file Form I-924, Application for Regional Center Designation Under the Immigrant Investor Program. It is important for prospective regional center owners to determine the geographic scope they will operate in and the kind of projects they will accept. Then, they must assemble a team of experienced EB-5 professionals who can ensure that the I-924 petition complies with USCIS’s many regulations. Some applicants choose to hire several different agencies or attorneys to complete the various sections of the I-924 petition, while others work with only one EB-5 consulting firm. Completing Form I-924 could take a few weeks or several months.

Form I-924 must include key immigration documentation and, if applicable, targeted employment area (TEA) designation. Projects in TEAs, which are either rural or high-unemployment areas, are entitled to receive EB-5 investments of only $900,000 (the non-TEA minimum investment requirement is $1,800,000). If a regional center’s geographic area encompasses a TEA, this should be demonstrated in the I-924 petition. Form I-924 must also contain securities documents showing how upcoming projects will be structured and a business plan that complies with the model set out in the Matter of Ho court ruling.