Prospective EB5 investors have the option of either direct investment or regional center investment. Through regional center investment, foreign nationals invest in EB5 projects that are sponsored by regional centers. In contrast to direct investment — where investors retain complete control over their investment — regional centers manage the EB5 business on behalf of an investor. The level of involvement of regional center investors is typically very little. Investors in regional center projects also do not have to provide documentation that direct investors are responsible for. This includes documentation such as the business plan, project structure, and others that will be covered shortly. United States Citizenship and Immigration Services (USCIS) evaluates a project’s documentation to determine if it complies with EB-5 regulations.
EB5 investors who are interested in a regional center sponsored project should thoroughly evaluate the project documents before entering any agreement. Project documentation that an investor should review includes, but is not limited to: private placement memorandum, subscription agreement, escrow agreement, loan documents, operating agreement or limited partnership agreement, business plan, regional center designation letter, targeted employment area (TEA) designation, market feasibility study, economic impact report, investor refund policy, etc.
These documents contain crucial information about the project in question and can provide insight into the project’s feasibility and potential risk. However, these documents are generally very complex, so it is important for an investor to obtain clarification if needed. It is in an EB-5 investor’s best interest to retain competent immigration counsel with relevant EB-5 experience. An attorney can review the documents for an investor, answer any questions an investor may have, and refer the investor to other industry specialists as needed. By reviewing project documentation, an EB5 attorney can also assist an investor in conducting due diligence on a project. An EB5 investor’s chance at obtaining U.S. permanent residency depends on their chosen EB-5 investment, so choosing the right project is critical to an investor’s immigration success.