The EB-5 Immigrant Investor Program enables foreign nationals to immigrate to the United States following a one-time investment in the U.S. economy. Usually, this investment is made via a regional center. Regional centers are organizations that set up new commercial enterprises (NCEs) for EB-5 investors.
Choosing a regional center to invest with is one of the first and most important steps in the EB-5 process. It is important to know, however, that there are around 640 regional centers across the United States and choosing the right one can be difficult for investors. You need to be confident the regional center you choose will help meet your EB-5 application requirements and provide a good return on investment.
In this article we will uncover what a regional center is, as well as how to find the most successful EB-5 regional centers. We will also provide you with the resources you need for performing due diligence on each regional center project.
What is a Regional Center?
EB5AN’s Regional Centers
Should You Invest Directly Or Through an EB-5 Regional Center?
How To Choose An EB-5 Regional Center
Top Resources For Researching Regional Center
Where to Get Started with EB-5 Regional Centers
What is a Regional Center?
To be considered for permanent U.S. residency under the EB-5 program, investors must invest in an NCE that generates 10 jobs for U.S. citizens.
EB-5 investors have two routes they can take to invest in an NCE:
- Make a direct investment: This is where they invest money into an NCE themselves.
- Invest via a regional center: The EB-5 applicant invests their capital in an NCE through an intermediary EB-5 regional center.
The vast majority of EB-5 investors choose the second option. In fact, recent data shows that over 94% of all EB-5 visas awarded went to regional center immigrant investors.
A regional center is a United States Citizenship and Immigration Services (USCIS) approved private or public economic unit that promotes economic growth in an area. It helps investors meet EB-5 requirements by:
✔️Setting up and managing NCEs for investors to fund.
✔️Partnering with commercial projects that stimulate the U.S. economy by creating jobs. These are often referred to as job-creating entities (JCEs)
✔️Providing application support and services to EB-5 investors.
✔️Helping to manage investor funds.
Regional centers handle EB-5 capital from multiple immigrant investors, and combine these into larger investment funds. This allows them to manage larger EB-5 projects, which makes them more capable of meeting their investor’s requirements.
Each regional center sponsors projects over a specific geographical area. These could range from counties to entire states.
Investing in targeted employment areas
Investing in targeted employment areas
Most regional centers focus on helping EB-5 applicants invest in targeted employment areas (TEAs). A TEA is a rural area or a non-rural area with an unemployment rate at least 150% of the national average.
TEA projects offer several benefits:
- Lower investment: Foreign nationals only need to invest $800,000 compared to the usual $1,050,000.
- Greater job-creation flexibility: TEA project investors can count indirect jobs towards their 10-job quota. This can include, for example, jobs created in their project’s supply chain.
- Visa priority: There are a limited number of EB-5 visas that can be issued each year for each country. If the visa allocation for the year is used up by a particular country, then other investors from that country need to wait extra. However, a certain number of visas are put aside for TEA projects. This gives TEA project investors from countries with a backlog the priority over regular ones.
EB5AN’s Regional Centers
EB5AN) has a network of 10+ EB-5 regional centers across the United States. All of these:
✔️Are USCIS-approved.
✔️Offer EB-5 projects located in TEAs.
✔️Have a track record of successful job creation.
This allows immigrant investors already residing in the country to easily find a regional center project nearby. Having their foreign investment in their own state gives them better oversight of it.
Our current projects include:
🏡Twin Lakes, Georgia: This 1,300 single-family home development is based in a rural TEA. So far, 530 properties have been built. It includes a loan repayment guarantee and job creation guarantee.
🏡Wohali, Utah: This 428-residence golf community development is already underway. It includes an I-526e approval refund guarantee and job creation guarantee. So far, the project has created 44 EB-5 jobs per investor.
Should You Invest Directly or Through an EB-5 Regional Center?
Both a direct investment or a regional center investment offers different benefits to EB-5 applicants.
However, investing through an EB-5 regional center has unique advantages. We’ve listed the main ones below:
| Advantages of investing through a regional center | Advantages of investing directly |
| Indirect and induced jobs count towards your job creation requirement. This includes any jobs created or prolonged because of the EB-5 investor’s foreign investment. For example: vendors or contractors. | Potentially start and run your own new commercial enterprise in the United States. |
| Get help and advice from experienced regional center operators. | Expand existing business operations in the United States. |
| Meet EB-5 managerial requirements simply by operating as a limited partner. | Greater control over your investment. |
| Excellent guarantees. | Chance to reap greater returns. |
| Disadvantages of investing through a regional center | Disadvantages of investing through a regional center |
| Pay fees on top of the regional center investment, since it is a commercial organization. | Can only count direct jobs (full-time employees, working directly for the NCE under a federal W-2 tax form) towards your 10-job EB-5 quota. |
| Little control over your investment. | Little help and advice. |
| Returns on your investment may be modest at best. | Could experience significant losses. |
How to Choose an EB-5 Regional Center
Aspiring EB-5 investors must do proper due diligence on the regional centers they consider.
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. Consider the backgrounds and past experience of each project manager.
A savvy EB-5 investor will examine the regional project developer using a number of criteria, including:
🔎Their track record of successful development.
🔎Their past experience with the EB-5 program and regional center management.
🔎Their past experience with the EB-5 program and regional center management.
Research the regional center’s past projects
Consider information such as:
🔎The number of projects the EB-5 regional center has sponsored.
🔎The number of previous immigrant investors who have achieved I-526 petition approval by investing through each of the prospective regional centers.
🔎The number of previous immigrant investors who have achieved I-829 petition approval by investing through each EB-5 regional center.
🔎The number of previous immigrant investors who have achieved I-526 petition approval by investing through each of the prospective regional centers.
🔎The number of previous immigrant investors who have achieved I-829 petition approval by investing through each EB-5 regional center.
Investors should also consider whether the regional center has previously worked on projects funded by EB-5 regional center investments. They should check if it is similar to the 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.
🔎Whether they have managed EB-5 regional center projects in the same field of expertise or area of the economy before.
🔎Whether they have managed EB-5 regional center projects in the same field of expertise or area of the economy before.
Check if the project developer is in a strong financial and operational position
Research the project developer and find out if it has recently worked on non-EB-5 regional center projects. The best developers won’t have to rely on alternative capital like EB-5. They will be creditworthy enough to secure traditional financing and in demand for many projects.
Find out if the developer has:
🔎Completed similar projects to the one you are considering investing in.
🔎Recently secured new financing for non-EB-5 projects.
🔎Defaulted on a loan.
Find out if the EB-5 project shares its financial statements
If a project doesn’t share its financial statements, this may indicate it has little or no revenue, significant debts or substantial losses.
Always ask to see financial statements from the regional center and the EB-5 project before investing. Read our comprehensive guide on analyzing an EB-5 project’s financial statements to learn more.
Does the project include a repayment guarantee?
The best EB-5 projects will set up agreements with the project developer’s parent company to guarantee repaying a loan. This way, if the project developer cannot repay the loan then EB-5 investors will still get their money back.
Check who the guarantor is and that they are well-capitalized and independent from the investment fund. The guarantor should have assets and net equity far in excess of the EB-5 loan.
Read our article about how EB-5 repayment guarantees work to find out more.
Avoid conflicts of interest
There should be no conflicts of interest between the regional center or the project developer. In other words, they should be completely separate entities.
This helps the regional center to protect its investors if the project is unable to repay them. For example, if the developer owns all or part of the regional center then it may be unable to repay investors due to losses incurred from the failed project.
Read our article on identifying regional center-developer conflicts of interest to learn more.
Contact each regional center with questions
You should always contact your regional center team with any questions you have about its projects or the EB-5 investment process.
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.
They’ll also provide their regional center’s success rate with foreign investors.
Top Resources For Researching Regional Centers
While regional centers are a great resource for EB-5 investment information, you shouldn’t base your investment decision solely on information from them.
Foreign nationals should also turn to third-party resources, including:
The USCIS Website
Visit the USCIS website
The USCIS website 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 database allows immigrant investors to check whether an EB-5 regional center 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
Visit the Better Business Bureau website
Another resource to help EB-5 immigrant investors 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 to advance marketplace trust by evaluating and accrediting businesses. Its 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.
The Better Business Bureau is not associated with the government. Its independent accreditations are widely trusted by businesses and citizens throughout the United States.
Where to Get Started with EB-5 Regional Centers
The benefits that come with investing through an EB-5 regional center program are well worth the managerial fees.
Fewer managerial requirements and more flexible job creation requirements are just the beginning. In fact, immigrant investors can take advantage of a whole host of other great incentives facilitated by the EB-5 regional center investment process.
It is however crucial for immigrant investors to properly examine any regional center that they are considering before making a foreign investment.
Due diligence on regional centers, project developers, and NCEs is essential to safeguard your EB-5 investment and ensure a successful green card process for you and your family.
If you need advice and guidance on regional centers, contact EB5AN’s experts and arrange your free consultation.
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 with the EB-5 immigration process, contact EB5AN today for a free assessment.
