EB-5 Investment Options
The EB-5 program was originally designed to stimulate the U.S. economy through foreign capital and job creation within the United States. It has since become a program whose purpose is to assist foreign investors and their families in becoming permanent residents in the United States through eligible investments.
In the EB-5 program, foreign investors may choose between investing through a regional center and investing directly in a commercial enterprise. While the core requirements of the program remain the same regardless of the type of investment, there are a few differences in how those requirements can be met.
Investment Through a Regional Center
Most foreign investors prefer using a regional center to manage their investment. One advantage to this method is that direct, indirect, and induced jobs may all be counted towards the 10-job requirement, making it easier to meet this condition of petition approval. This substantially reduces the risk of not having the petition approved and thus not being able to immigrate. The minimum investment amount is the same regardless of the method chosen: $500,000 if the commercial enterprise receiving the investment is located in a targeted employment area (TEA) and $1,000,000 if it is not in a TEA. Permitted enterprise structures are the same as well: sole proprietorships, limited liability companies, joint ventures, partnerships, etc. are all permitted structures.
Direct Investment
Some EB-5 investors choose to invest directly in a commercial enterprise instead of going through a USCIS-approved regional center. This does not mean that they have to be the sole investor in the enterprise; they may join with other investors to provide the needed capital for the project. However, only direct jobs can be counted towards the 10-job requirement. This means that only fulltime employees of the enterprise can be counted, whereas with a regional center investment, the investor may count fulltime direct employees, employees of entities providing services to the new commercial enterprise (indirect jobs), and employees that have jobs as a result of money spent by those employees (induced jobs).
Selecting the Investment That is Best for You
If it seems difficult to pick a form of investment (direct or through a regional center), think of it this way: It all boils down to how much control you want over the project you are investing in. Many foreign investors who select the direct investment method do so with the intention of creating their own commercial enterprise that they will later turn into a successful business. Many times, these investors will simply expand existing homegrown enterprises into the United States and use those enterprises as their investment recipients. Thus, direct investment is the best option for these individuals since they wish to retain as much control as possible over both the investment and the enterprise they are investing in.
A regional center investment is best for those investors who prefer to let others handle the details of the investment and project. The responsibilities that these investors have are few. In addition, since the capital coming from EB-5 investments is usually only a small amount of the total capital a project has obtained when the investment is through a regional center, more jobs are generally created, increasing the likelihood of successful petition approval and immigration.
Petition Filing Procedures for EB-5 Investments
Another difference between EB-5 direct investments and regional center investments is the manner in which the various petitions are filed during the EB-5 process.
With a direct investment, EB-5 investors carry a greater responsibility in the petition filing process. In consultation with a retained immigration attorney, each investor must compile the necessary documentation that must be submitted with each petition. They must also submit petitions themselves, ensuring that the forms have been filled out properly and include all necessary documentation and that they meet the deadlines in the program.
If the investment is made through a regional center, the filing process is done with the combined efforts of the investor and the selected regional center. Both parties will work to locate and combine documentation; much of this work is already taken care of since regional centers already have project documentation prepared.
Summary
Participating in the EB-5 Program requires the investor to make several important decisions. The process can be a lengthy one that can be even more drawn out if obstacles are encountered. Because the importance of ensuring accurate and complete documentation as well as compliance to all regulations on the part of all involved parties, we recommend seeking guidance from a USCIS-approved regional center or an EB-5 consulting firm as they have the experience necessary to help you make the best decision for your situation.
