Across the globe, foreign nationals take advantage of the EB-5 Immigrant Investor Program to attain the desired life they envision for themselves and their direct family in 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 health care 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).
EB-5 investors have two routes they can take to distribute their investments into the project. The first is to send their EB5 investment directly to NCE. The other option is to invest through an EB-5 regional center, which will handle the investment fund in which capital from multiple EB-5 investors can be combined to carry out larger projects. Both options offer different benefits to the EB-5 investor, but investing through an EB-5 regional center has unique advantages that entice EB-5 investors to more generally take this route. For example, investors can retain strong EB-5 knowledge from regional center operators as well as generally meet the managerial requirements simply by operating as a limited partner. It also allows investors to include indirect and induced jobs toward the job creation requirement, which helps build a cushion and security for the investor.
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. It’s extremely important to understand that the value associated with the EB-5 regional center program goes above and beyond those fees. The major relaxation of managerial requirements is just one benefit, and the facilitated EB5 regional center investment process offers other great incentives, but proper examination of centers is crucial to maximizing a foreign national’s investment.
Points to Consider When Choosing a Regional Center
EB-5 regional centers are commercial businesses that require United States Citizenship and Immigration Services (USCIS) approval to partake in EB-5 investment projects. USCIS grants centers the right to sponsor EB-5 projects over a specific geographical area, which could range from counties to entire states. A regional center’s main focus is to fit its projects within targeted employment areas (TEAs) because TEA projects allow foreign nationals to invest half of the EB-5 investment requirement—$800,000 compared to $1,050,000.
Aspiring EB-5 investors should do proper due diligence on the regional centers they are considering. Evaluating the management team of a prospective center should be the start, with their backgrounds and past experience constituting a particular focus. Researching past projects sponsored by the centers should also be a main consideration. Investors should consider information such as the number of projects the center has sponsored, the number of their previous investors who have gotten I-526 petition and I-829 petition approval, and their rate of return on EB-5 investment capital by the end of the loan term before making their decision.
Investors should also consider whether the regional center has worked on similar projects to the specific EB-5 project they are considering. Key information to examine includes whether the regional center has collaborated with this developer in the past and whether they have managed projects in the same field before. A savvy EB-5 investor will also examine the project developer, including their track record, experience with the EB-5 program, management, and more.
Don’t hesitate to ask any questions you may have for a prospective regional center about their EB-5 projects, EB5 investment, or any other questions that may concern you. Reputable regional centers have respect for their clients and expect investors to reach out to the center team for clarifications. A well-established regional center will always provide the documentation and information requested by investors to ensure they understand the process and its benefits, as well as their success with foreign investors similar to you in the past.
Resources for Researching Regional Centers
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 turn to third-party resources to mitigate all risks.
The USCIS website is a great resource to certify whether a regional center is USCIS-approved to sponsor EB-5 projects. Through their website, you can search through the USCIS-approved regional centers across the US as well as terminated regional centers.
Better Business Bureau
Another resource for EB-5 investors to select the best center for their project is the Better Business Bureau (BBB). Their website provides reviews on regional centers made by clients, as well as ratings for each center. In the search, you can also see whether the BBB has accredited the company as having higher standards.