Whether a foreign national makes an EB-5 investment through a USCIS-approved regional center or directly in their chosen EB-5 project, the outcome of a successful investment is the same: U.S. permanent resident status for the investor and their immediate family members. Success is contingent on meeting the various requirements of the EB-5 program, including investing the minimum required investment amount, proving the lawful source of funds of the EB5 investment capital, and creating no fewer than 10 full-time jobs for U.S. workers.
EB-5 investment through a regional center and EB-5 investment directly in a qualifying project both have their merits. Direct investment is well suited to investors with substantial managerial experience who wish to work closely with the new commercial enterprise (NCE) to retain more control over their investment funds. For most EB-5 investors, however, the choice is clear: the advantages of investment through a regional center far outweigh those of direct EB5 investment.
What Are the Advantages of EB-5 Regional Center Investment?
Most EB-5 investors choose to work with a regional center—in fact, some years, all the investors from a given country opt for the regional center route. This choice isn’t without reason—EB5 investment via a regional center offers more security and freedom than direct EB-5 investment. Below are the key benefits of EB-5 regional center investment.
Higher Proportion of TEA Projects
Most regional centers focus on EB-5 projects that qualify for targeted employment area (TEA) status, which is designated to projects in particularly high-unemployment or rural areas that can especially benefit from the economic stimulation and job creation the EB-5 program cultivates. Congress has given foreign nationals a strong incentive to make an EB-5 investment in TEAs: the minimum required investment amount for TEA projects is halved from $1.8 million to $900,000. While direct investment projects can also qualify for TEA status, depending on their location, they are easier to find through EB-5 regional centers.
Lighter Managerial Responsibilities
Those who make an EB-5 investment directly in a project are generally required to heavily involve themselves in the day-to-day management of the NCE, which can be daunting for investors without sufficient managerial experience or who simply wish to devote their time to other affairs. Regional center investors are typically spared these responsibilities, instead satisfying the requirement of involvement in the NCE with a policy-advisor role as a limited partner. This allows investors to, for example, make an EB5 investment in a project in Florida yet move house to Hawaii.
Easier Job Creation Requirements
To be eligible for permanent resident status in the United States, a foreign national must prove their EB-5 investment has created at least 10 new jobs for U.S. workers. For direct investors, this can prove challenging, as the jobs must be direct (i.e., listed on the NCE’s payroll or construction jobs lasting more than 24 months). Regional center investors, on the other hand, can count not only direct jobs but also indirect and induced jobs. Thus, instead of showing the NCE’s payroll to prove job creation, regional center investors can supply a professionally drafted economic report estimated to have been created through the NCE’s provision of goods and services and the wages spent by NCE employees in the local community.
Guidance from EB-5 Professionals
EB5 investments are inherently complicated, and it can be challenging for an investor to navigate all the regulations on their own. Reputable regional centers are run by industry experts with extensive experience in the EB-5 sphere and investment projects, which means investors have access to professional advice and guidance to help them through the process. Most regional centers have in-house law experts to help make sure investors are complying with all the EB-5 regulations.
How Do You Choose the Right EB-5 Regional Center Program?
While making an EB-5 investment through a regional center generally offers more security than direct investment, meticulous due diligence on prospective regional centers is still imperative. Regional centers vary in their experience, professionalism, and track record, and anyone who aims to immigrate permanently to the United States should ensure they are entrusting their EB5 investment capital to a reputable organization. Here are three key aspects to consider when vetting potential regional centers.
Consider how many EB-5 projects the regional center has previously worked with and how many of its EB-5 investors’ journeys have culminated in U.S. green cards. Look at the EB-5 regional center’s track record for both I-526 and I-829 petitions. To safeguard your financial interests, also ascertain how many previous investors have received their EB-5 investment capital back.
The Developers They Work With
Take a look at the developers and projects the EB-5 regional center works with. Who are the developers and how trustworthy are they? Find out who the construction lenders and general contractors are. Determine the developers’ commitment to their own projects by considering how much of their own money they have invested in their projects.
The People on Their Team
Learn who operates the EB-5 regional center and what their backgrounds are. Look into their credentials and experience in relevant areas, including EB-5 investments and project development. Ask questions and get to know the team—after all, if you choose to invest through the regional center, you will be working closely with them.