A nonaccredited EB-5 investor cannot invest in a project sponsored by a regional center. A reputable regional center that has been approved by United States Citizenship and Immigration Services (USCIS) will often enter into an EB-5 relationship only with accredited investors. This is due largely to the federal and state securities laws established by the U.S. Securities and Exchange Commission (SEC).
All U.S. companies engaging in securities offerings must operate in accordance with SEC regulations and be either registered with the SEC or have a suitable exemption. An agency like one of the EB-5 program’s regional centers is considered a company engaging in securities offerings, as they must gather capital for their sponsored EB-5 projects. Regional centers also provide securities offerings in the form of limited partnership or limited liability company roles that regional center investors occupy in the project they’re investing in. As such, most regional centers choose to operate in compliance with the SEC and its rule of exemption, which means all EB-5 investors who invest through a regional center must be accredited.
An EB-5 investor qualifies as an accredited investor by meeting one of the following two criteria: either they individually or jointly (with a spouse) have a net worth of $1 million, excluding the value of a primary residence, or they have earned an individual income of $200,000, or a spousal joint income of $300,000, for the past two consecutive years and expect the same amount, either individually or jointly, for the present year.
An immigration attorney can help prospective EB-5 investors wishing to invest through a regional center obtain accredited status. The attorney will ask the investor for certain documentation that confirms their eligibility for accredited status and from there, help obtain an Accredited Investor Verification Letter.
EB-5 investors who do not qualify for accredited status but still wish to participate in the EB-5 program have the option of following the direct investment model.