Tips for Choosing a High-Quality EB-5 Regional Center

Across the globe, foreign nationals participate in the EB-5 Immigrant Investor Program to immigrate to the United States.

For an EB-5 investor and their family, having a green card provides priceless benefits, including but not limited to facilitated admission at U.S. colleges, technologically advanced healthcare services, and a backup in scenarios where there is political instability or economic volatility in their home country.

All this can be made a reality through a one-time EB-5 investment in a qualifying new commercial enterprise (NCE).

Most EB-5 investors invest in an NCE through an EB-5 regional center. In this article, we will discuss how to find the best regional center for EB 5 investors and provide resources for performing due diligence on a regional center project.

How to Succeed in the EB-5 Immigration Process

The road to a green card and a better life in the United States has never been more straightforward thanks to the EB-5 Immigrant Investor Program. Foreign investors and their family members simply need to follow this roadmap to EB 5 success:

1. Find a New Commercial Enterprise

The first step in the EB 5 Immigrant Investor program is for a prospective foreign investor to find a qualifying new commercial enterprise seeking foreign capital for investment through the EB 5 program.

The new commercial enterprise should have a clear business plan demonstrating the expected return on investment and how the deployment of the investor’s EB 5 capital will create or preserve at least 10 qualifying full-time jobs.

A new commercial enterprise is defined in the USCIS Policy Manual as any commercial enterprise established after November 29th, 1990. An NCE can be any of the following lawful, for-profit organizations formed in the United States for the ongoing conduct of business:

• Corporation
• Holding company
• Sole proprietorship
• General partnership
• Limited partnership
• Joint venture
• Business trust
• Other such publicly or privately owned entity

Once an immigrant investor has decided on an EB 5 project with an NCE, they must invest the required minimum investment of $1,050,000; or $800,000 if the project is located in a targeted employment area (TEA).

The foreign investment can be a direct investment, made directly in the new commercial enterprise; or an indirect investment made through a USCIS-approved EB 5 regional center. This type of indirect EB 5 investment is also known as a regional center investment.

Nearly all EB 5 visa applicants prefer to make a regional center investment as opposed to a direct investment.

2. File an I-526 or I-526E Petition

After investing the required minimum investment with a qualifying NCE, an immigrant investor then files an I-526 or I-526E petition.

• Form I-526, Immigrant Petition by a Standalone Investor, is for immigrant investors who made a direct investment in an NCE.
• Form I-526E, Immigrant Petition by a Regional Center Investor, is for those immigrant investors who invested in their chosen NCEs through EB 5 regional centers.

According to the USCIS website, in order to qualify for the EB 5 Immigrant Investor Program, an immigrant investor must present at least the following evidence in their I-526 or I-526E petition, as applicable:

Evidence on the New Commercial Enterprise

• Articles of incorporation, certificate of merger or consolidation, partnership agreement, certificate of limited partnership, joint venture agreement, business trust agreement, or another similar organizational document for the new commercial enterprise.
• A certificate evidencing authority to do business in a state or municipality or, a statement to that effect.
• Stock purchase agreements, investment agreements, certified financial reports, payroll records, or any similar instruments, agreements, or documents evidencing the direct investment or regional center investment in the new commercial enterprise and the resulting substantial change in the net worth or number of employees.

Evidence of the EB-5 Foreign Investment

• Bank statements showing amounts deposited in U.S. business accounts for the enterprise.
• Evidence of assets that have been purchased for use in the U.S. enterprise, including invoices, sales receipts, and purchase contracts containing sufficient information to identify such assets, their purchase costs, date of purchase, and purchasing entity.
• Evidence of any loan or mortgage agreement, promissory note, security agreement, or other evidence of borrowing secured by the immigrant investor’s assets, other than those of the new commercial enterprise, and for which the immigrant investor is personally and primarily liable.

Evidence of Investor Participation in the NCE

• A statement of the position title that the immigrant investor has or will have in the new enterprise and a complete description of the position’s duties.
• If the new enterprise is a partnership, either limited or general, evidence that the immigrant investor is engaged in either direct management or policymaking activities.

An immigration attorney usually files Form I-526 or Form I-526E on behalf of immigrant investors.

Immigration attorneys also help make sure that immigrant investors and their eligible family members have compiled all the necessary supporting documentation for their petitions.

3. Receive Conditional Permanent Residency

Once the immigrant investor has filed their I-526 or I-526E application– including all required documentation on the investor, their foreign investment, their chosen new commercial enterprise, their finances, and their eligible family members– the investor must wait for approval by United States Citizenship and Immigration Services (USCIS).

USCIS approval of I-526 and I-526E applications has become slower since the global consular shutdown precipitated by the 2020 COVID-19 pandemic.

However, with the passage of the EB-5 Reform and Integrity Act of 2022, the U.S. Congress and President Joe Biden committed more resources to USCIS. This may allow USCIS to adjudicate more petitions more quickly in the future.

Once an immigrant investor’s I-526 or I-526E petition is approved by USCIS, the investor, their spouse, and any of their unmarried children under 21 receive two-year conditional permanent residency green cards, allowing them to live and work in the United States.

Conditional permanent residency status lasts for two years.

4. The Last 90 Days: Form I-829

In the last 90 days of conditional permanent residency status, the immigrant investor must file an I-829 petition to remove conditions from their family’s green cards.

Once their I-829 petition is approved, the investor and their eligible family members will be granted full permanent residency, with the freedom to live, work, travel, or study, anywhere in the United States.

Five years after establishing conditional permanent residency, the investor and their family can even apply for United States citizenship.

The Role Of An EB-5 Regional Center

When choosing a new commercial enterprise, EB-5 investors have two routes they can take to distribute their foreign investment into an EB 5 project:

• The first option for immigrant investors is to make a direct investment, arranging for the distribution of their EB5 capital into the NCE directly.
• The second option for immigrant investors is to make a regional center investment, investing their EB 5 capital in an NCE through an intermediary EB-5 regional center.

EB-5 regional centers are commercial businesses that receive USCIS approval to partake in EB-5 investment projects. Regional centers handle the EB 5 capital from multiple immigrant investors, and combine them into a larger EB 5 investment fund in order to carry out larger EB 5 projects.

USCIS grants regional centers the right to sponsor EB-5 projects over a specific geographical area, which could range from counties to entire states.

Regional center investments allow immigrant investors to not only pool their resources with other EB 5 investors, but to take advantage of the invaluable EB 5 insight that only established regional centers with a proven track record of success can provide.

A regional center’s main focus is to work with EB 5 projects within targeted employment areas (TEAs) because TEA projects allow foreign nationals to invest less than the standard EB-5 investment requirement—$800,000 compared to $1,050,000.

EB5AN’s Regional Centers

EB 5 Affiliate Network (EB5AN) has a wide network of 10+ EB 5 regional centers, all of which have received USCIS approval and have a proven track record of successful EB 5 visa investments for foreign nationals.

EB5AN’s regional center network has regional center availability all over the United States. This allows immigrant investors already residing in the country to easily find a regional center project nearby, allowing an investor to have better oversight on their foreign investment right in their own U.S. state.

EB5AN’s regional centers offer EB 5 projects that are located in TEAs, allowing for a much lower minimum EB 5 investment of just $800,000.

Should You Invest Directly Or Through an EB-5 Regional Center?

Whether immigrant investors choose to make a direct investment or a regional center investment, both options offer different benefits to the EB-5 investor.

However, investing through an EB-5 regional center has unique advantages that entice EB-5 investors to take the regional center investment route over direct investment.

Advantages of Direct Investment

Direct investment is often the preferred investment method for those immigrant investors interested in using their foreign investment to start and run their own new commercial enterprise in the United States.

Immigrant investors who wish to expand or begin their own business operations in the United States will be more interested in direct investment. Those investors who seek more control over their new commercial enterprise, as well as full management of their foreign investment, should consider direct investment over regional center investment.

However, direct investment does come with certain drawbacks.

Direct investment in an NCE means that immigrant investors can only count “direct” jobs towards their required minimum of 10 jobs created.

Direct employment refers to full-time (at least 35 hours per week) employees working directly for the NCE under a federal W-2 tax form.

All other jobs or persons financially dependent on EB 5 capital for the preservation of employment, such as vendors or contractors, do not count towards the immigrant investor’s job creation requirement under direct investment.

This inflexibility in meeting the job creation requirement is a significant drawback for most EB-5 investors, and the single biggest reason so many choose to make a regional center investment over a direct investment.

Advantages of EB-5 Regional Center Investment

The overwhelming majority of EB-5 investors do not make a direct investment in an NCE. Most foreign nationals in the EB 5 visa program invest through an EB-5 regional center.

In fact, a 2021 study found that 93.4% of all EB-5 visas awarded went to regional center immigrant investors.

Investing through an EB-5 regional center allows investors to include indirect and induced jobs toward the job creation requirement.

“Indirect” or “induced” jobs refer to anyone whose job was created or prolonged because of the deployment of a given EB 5 investor’s foreign investment. In the construction of a hotel, for instance, this could include construction vendors, legal counsel, or others.

Importantly, these jobs also include a regional center project’s overall economic impact.

This expansion of criteria for what constitutes the creation of a job is vital to the EB 5 visa process. Being able to count more jobs helps build a cushion and security for the investor, in the event that some of the jobs do not last the required two years.

Investing through EB-5 regional centers also allows immigrant investors to take advantage of robust EB-5 knowledge from regional center operators.

Immigrant investors who make a regional center investment can also generally meet the managerial requirements simply by operating as a limited partner.

EB-5 investors who plan to funnel their loan through an EB-5 regional center have to pay fees on top of the investment amount, since it is a commercial organization.

However, despite the addition of a managerial fee, the aforementioned advantages mean that regional center investment is still the chosen path for nearly all successful EB 5 visa applicants.

How To Choose An EB-5 Regional Center

Aspiring EB-5 investors must do proper due diligence on the regional centers they are considering.

Before making a decision on an EB 5 regional center, immigrant investors should investigate the following points about each of their prospective EB 5 regional centers:
Investigate the Regional Center’s Management

Immigrant investors should start by evaluating the management team of the prospective regional centers. Considering the backgrounds and past experience of each project manager should be a top priority for foreign investors.

A savvy EB-5 investor will examine the regional project developer by a number of criteria, including:

• The project developer’s track record of successful development.
• The regional center project developer’s past experience with the EB-5 program, regional center management, and more.

Research the Regional Center’s Past Projects

Researching past projects sponsored by the regional centers should also be a main consideration. Investors should consider information such as:

• The number of projects the EB 5 regional center has sponsored.
• The number of their previous immigrant investors who have gotten I-526 petition approval by investing through each of the prospective regional centers.
• The number of their previous immigrant investors who have gotten I-829 petition approval by investing through each EB 5 regional center.

Investors should also consider whether the regional center has worked on EB 5 investment projects similar to the specific EB-5 project they are considering for their foreign investment. Key information to examine includes:

• Whether the regional center has collaborated with this particular EB 5 project’s developer in the past, and
• Whether they have managed EB 5 projects in the same field of expertise or area of the economy before.

Top Resources For Researching Regional Centers

Immigrant investors seeking to make a regional center investment in order to achieve their family’s dreams of United States residency should not hesitate to ask a prospective regional center any questions the investor may have.

Reputable regional centers have respect for their clients and expect investors to reach out to the regional center team for clarifications about the EB 5 regional center’s EB 5 projects, EB 5 regional center investment, or any other questions that may concern foreign investors.

A well-established regional center will always provide the documentation and information requested by immigrant investors to ensure they understand the regional center process and its benefits, as well as their specific regional center’s historic success rate with foreign investors similar to you in the past.

Making an EB5 investment is an intricate process, and the decision should not be made solely based on documentation collected from the regional center.

While regional centers are a great resource for EB-5 investment information, foreign nationals should also turn to third-party resources to mitigate all risks.

The USCIS Website

The official United States Citizenship and Immigration Services (USCIS) website, provided by the U.S. federal government, is a great resource for all EB 5 immigration concerns, including EB 5 regional center records.

Through their website, immigrant investors can also search a database of all USCIS-approved regional centers across the United States.

This official database will allow immigrant investors to be able to certify whether a given EB 5 regional center they and their family are considering for foreign investment has been approved by USCIS to sponsor EB-5 projects.

Foreign investors can also find a list of terminated regional centers on the USCIS website.

Better Business Bureau

Another resource to help EB-5 immigrant investors to select the best EB 5 regional center for their project is the Better Business Bureau (BBB).

The Better Business Bureau is an independent nonprofit organization founded for the purpose of advancing marketplace trust by evaluating and accrediting businesses in the U.S., Canada, and Mexico with a proven track record of fair business practices.

The Better Business Bureau website provides reviews on various EB 5 regional centers made by their former immigrant investor clients, as well as ratings for each EB 5 regional center.

By using the website’s search function, immigrant investors can also see whether the Better Business Bureau has accredited any prospective EB 5 regional center as having higher standards.

As of July 2022, the Better Business Bureau has independently accredited over 400,000 businesses and commercial enterprises.

The Better Business Bureau is not associated with any government entity. But its independent accreditation is widely trusted by nearly all businesses and citizens throughout the United States.

Where to Get Started with EB 5 Regional Centers

It is extremely important to understand that the value associated with the EB-5 regional center program goes above and beyond the managerial fees.

The major relaxation of managerial requirements is just one benefit of making a regional center investment. Foreign investors can also count both direct jobs and indirect jobs towards their job creation requirement if they make a regional center investment. In fact, immigrant investors can take advantage of a whole host of other great incentives facilitated by the EB 5 regional center investment process.

However, before deciding on making a foreign investment with any EB 5 regional center, it is crucial for immigrant investors to make a proper examination of all regional centers they are considering.

Due diligence on regional centers, project developers, and NCEs is essential to maximizing a foreign national’s EB 5 investment. It is also essential in order to ensure a successful green card process for not only the immigrant investor, but their spouse and unmarried children under the age of 21 as well.

Immigrant investors seeking guidance on regional centers should take advantage of the expert advice offered by the EB-5 professionals at EB5AN.

EB5AN operates more than 10 USCIS-approved EB 5 regional centers, with regional center coverage across more than 20 U.S. states, plus Puerto Rico and the District of Columbia (Washington, D.C.).

To get started on the EB-5 immigration process, contact EB5AN today for a free assessment.