What is an EB-5 regional center management or administration fee, and do direct investments carry such a fee?

Regional center investment is, by far, the more popular EB-5 investment method. This popularity can be attributed to its many benefits, such as a lower minimum investment amount. Moreover, regional centers will handle much of the paperwork required to prove their chosen project qualifies for the EB5 program. The purpose of admin fees is to pay the expenses accrued in the process of offering the project and ensuring its compliance with United States Citizenship and Immigration Services (USCIS) EB5 regulations. These costs include:

  • Marketing expenses — cost of attracting investors
  • Agent commissions — finder’s fees for agents who recruit investors
  • Administrative costs — payments to lawyers, economists, and other consultants who help ensure the project is complaint with EB5 regulations

Regional center admin fees vary widely between different centers and projects, but typically fall somewhere in the range of $30,000 to $60,000, with an average of $50,000. Admin fees are unrelated to an investor’s initial EB5 investment capital. As such, any paid admin fee does not count towards these funds. Moreover, most regional centers require the admin fee to be paid up front and in full before the investor even files their I-526 petition.

As the alternative to regional center investment, direct investment means an investor must either purchase or invest in an existing enterprise or create an entirely new business. Direct investments can have fees similar to regional center admin fees, but this depends on the nature of the investment. Regional center admin fees exist to cover the cost of managing an EB5 project on behalf of the investor. In a direct investment, the investor is solely responsible for managing their enterprise. However, a direct investor may hire the services of consultants, planners, business brokers, and other legal professionals to help ensure project compliance and success. In these cases, the investor must pay for any expenses incurred in the process.