When embarking on their EB-5 journey, investors have two options: invest directly in an EB-5 project or invest via a regional center. Both offer advantages and disadvantages, but for most EB-5 investors, regional center investment is the clearly superior choice.
Less Risky EB-5 Projects
The objective of EB-5 investors is to make a lucrative investment that earns them the right to live permanently in the United States. Regional center EB-5 projects tend to involve lower financial and immigration risk in the following ways:
- Investors who work with a regional center do not need to carry out managerial tasks, which means that even investors with little managerial experience can be successful in the EB-5 program.
- Working with an EB-5 regional center that has obtained government preapproval reduces the amount of evidence investors need to provide in their I-526 and I-829 petitions.
- Regional centers carefully assess every project they associate with to ensure the financial and immigration risk for investors is low.
Higher Likelihood of a Lower Minimum Required Investment Amount
Certain EB-5 projects—those located in a targeted employment area (TEA)—qualify for a lower minimum investment amount. Whereas EB-5 investors must transfer at least $1.8 million to a project outside a TEA, projects within a TEA require only $900,000. TEA designation depends entirely on the location of the project, regardless of whether it is affiliated with a regional center, but regional centers tend to select EB-5 projects in TEAs.
Easier Job Creation Requirements
One of the most popular benefits of regional center investment is the significantly easier requirements for job creation. In essence, the requirement is the same for all EB-5 investors: 10 full-time jobs for U.S. workers that last at least two years. What differs is what investors may count as jobs. Those who invest directly in an EB-5 project may only count construction jobs and jobs on the payroll of the new commercial enterprise (NCE). In contrast, EB-5 investors working through regional centers are able to include the jobs of the NCE’s external suppliers and service providers (indirect jobs) and jobs created or fostered in the community as the NCE employees spend their money (induced jobs).
No Geographical Restrictions
Direct EB-5 investment ties an investor to the location of his or her project, as he or she must engage in daily managerial tasks. Regional center investors are free of this burden because the regional center handles their managerial responsibilities. Therefore, EB-5 investors who choose the regional center route can live, work, and study anywhere in the United States that they desire. For regional center EB-5 investors, it’s entirely possible to invest in an EB-5 project in Florida while living in Washington, D.C.
Why Some Investors Prefer Direct Investment
No two EB-5 investors are the same, so while regional center investment is the better option for most investors, direct investment is ideal for some other EB-5 investors. EB-5 investors with extensive managerial expertise who wish to expand their business in the United States and retain more control over their funds may be interested in direct investment.
Despite the benefits, however, EB-5 investors considering direct investment should bear in mind the disadvantages of the direct investment route:
- Many direct investment projects are located outside of a TEA.
- You may not be able to find suitable EB-5 projects in the areas you wish to live.
- Direct investment projects may incur more financial and immigration risk (thorough due diligence is a must).
- You can only count direct jobs toward your job creation requirement.
Benefits of the EB-5 Program
Regardless of the investment route, the EB-5 program is one of the best pathways to a U.S. green card for foreign investors. Five years after receiving an EB-5 visa, investors and their families can even apply for U.S. citizenship. The EB-5 visa offers numerous benefits, including the following:
- EB-5 investors can include their families (spouse and unmarried children below the age of 21) on their EB-5 visa application.
- An EB-5 visa facilitates admission to U.S. colleges.
- The United States offers almost unlimited business and investment opportunities for EB-5 visa holders.
- EB-5 green card holders can enjoy work opportunities in the United States with no restrictions.
- An EB-5 visa allows investors to live anywhere they choose in the United States.
