With hundreds of EB-5 regional center investments to choose from, which is right for you?
The best EB-5 offerings stand up to scrutiny. Our independent analysis is just what potential investors need before making a decision. However passionate you are about your offering – in today's world nothing attracts investors like transparency.
We can help you make an informed decision about which EB5 projects gives you the best chance of getting a Green Card and your money back.
A regional center is an organization approved and regulated by the U.S. Citizenship and Immigration Services (USCIS) to promote economic growth in a specified region.
A regional center allows a New Commercial Enterprise (NCE) in the U.S. to pool together the capital from many investors into one project. An NCE can be a public or private entity or a combination of both.
Inspired by the immigrant investor programs of other countries, Congress established the Regional Center program, then known as the Immigrant Investor Pilot Program, in 1992. This was two years after Congress established the EB5 visa program in 1990.
Twenty years later, in 2012, Congress removed “pilot” from the program name and reauthorized the program through till 2015. The Regional Center Program has since been reauthorized many times for different lengths of time.
USCIS oversees the program, its policies, and the compliance of EB5 investors, regional centers, new commercial enterprises, and job creating entities.
Every year a regional center must submit a Form I-924A to show their job creation activities as well as other proof of eligibility for the program. If a regional centre does not submit this form or properly proves its job creation, it can receive a Notice of Intent to Terminate (NOIT). This can lead to that regional center losing its designation in the program.
While an investor must fulfil many EB 5 visa requirements, the essence of the program is about U.S. job creation and economic development. As such, each investor seeking their EB-5 visa need to invest a prescribed amount of capital into a new commercial enterprise that creates at least 10 fulltime U.S. jobs for at least two years. And their EB5 investment must qualify with being “at risk.” If the job creation requirement, along with others, are met, after two years, an investor can receive an EB 5 visa.
As part of USCIS’ new EB-5 modernization that went into effect November 21, 20019, the Regional Center Program has two EB5 investment tiers applicants: $900,000 for Targeted Employment Area investments (TEA’s) investments, and $1.8 million for non-TEA investments.
The program’s activity and impact have increased by a huge margin, even in the last decade. In 2008, the program garnered $321 billion in investments; while in 2014 to 2015, that number skyrocketed to $11 billion. During 2014-15, the capital infusion from the program represented 2% of total foreign direct investment in the U.S.
The impact made by regional centers touches many necessary and important industries and sectors including health care, education, renewable energy sources, senior living facilities, transportation, affordable housing, hotels, research facilities, architectural and engineering related services, wholesale trade, and more.
When the EB-5 program was originally created in 1990 there was only direct investment option. Today The Regional Center Program accounts for 95% of all EB-5 project investment.
The EB5 process from investor perspective involves selecting an Investment project, filling an I-526, then I-485 or DS-260 and I-829; which eventually opens the platform to get an EB5 green card. While the Regional Center Program is one way to acquire an EB 5 visa through investment, direct investment is another.
A direct investment usually features one investor for a project and the investor must act in a managerial or advisory capacity for that business, and be involved in decision making with an EB-5 business plan. In general, an investor must be actively involved in a direct investment.
In a direct investment project, an investor also must follow different job requirement standards. Direct investments only allow “direct” jobs to be counted (see below for job-type definitions), and each job counted must have a corresponding W-2 for that employee. Franchises, hotels and retail stores are typical direct investments.
Conversely, regional center investments involve many investors who purchase equity stakes in an investment fund. That fund then purchases equity in the job creating entity (the equity model) or loans capital to the job creating entity (the loan model).
There are many reasons why investors find the regional center model makes the EB-5 process easier for investors. One is the amount of active involvement required: almost none compared with a direct investment. A regional center investment allows investors to passively invest through a limited partnership or limited liability company. For an EB-5 applicant not interested in running a business, this is a significant advantage.
Another clear advantage of the regional center program vs. a direct investment lies in job creation. The Regional Center Program allows for a broader range of jobs accepted, thus making that requirement easier to fulfil. Regional center jobs may be direct, indirect or induced.
Regional centers, by virtue of investor capital pooling, also have a wide range of projects they can support compared with the relatively limited scope of direct investment options.
As one of the EB-5 visa requirements, Job creation is a critical aspect of EB-5 visa program. Direct jobs are usually construction or jobs created during the operational phase of the EB-5 project, such as hotel operations. Note that construction jobs can only be counted if the construction phase is longer than 24 months; otherwise only indirect and induced jobs created by construction spending can be counted.
Indirect jobs are those created in industries that supply the necessary goods and services required for construction or operations. Examples would include employment related to a construction supply company.
Induced jobs are created from the extra spending in the local economy by people with direct and indirect jobs related to an EB-5 project. An example would be a clerk at local supermarket hired to accommodate the extra business they are experiencing because of an EB-5 project.
Through the Regional Center Program, an applicant must either invest $900,000 in a designated TEA project or $1,800,000 in a non-TEA project. TEA designation is given to projects in rural areas or areas with an unemployment rate of at least 150% of the national average. TEA’s are now designated at the federal level.
To qualify for Targeted Employment Areas (TEAs) designation, a non-rural investment project must be in an area with at least 150% of the U.S. national unemployment rate, or in an area that qualifies as a rural area. Rural-area TEAs can include cities and towns outside of metropolitan statistical areas (MSA’s) and have a population of 20,000 or more.
The job-creating entity (JCE) must conduct its main business in the TEA and fulfil job-creation requirements in the TEA as well. Additionally, new EB5 green card program rules require that any census tracts used in TEA calculations be directly adjacent to the project tract.
While TEA status was previously made on a state-by-state level, that power now resides at the federal level with the Department of Homeland Security (DHS). This program change was made to ensure consistent TEA qualifications, and to fulfill the original aim of the EB5 Regional Center Program — to give financially challenged and rural areas financial support through investment capital and job creation.
Each investor must now provide proof of TEA qualification. Note that the Department of Homeland Security does not prescribe that one particular set of data or methodology be used. This evidence must be given with each I-526 petition and is processed together with that petition.
While it is theoretically possible for an investor to provide clear evidence of TEA qualification, it is recommended that they enlist the support of an experienced EB-5 economist or due diligence firm — as significant time and money is at stake. A denial of TEA status will require an investor to make a $1.8 million investment, rather than $900,000.
USCIS, as of June 3, 2019, has approved 884 regional centers. Click here to see the list of USCIS approved regional centers.
Investors should be mindful of the limitations of USCIS approval of an EB-5 regional center. Such approval does not indicate USCIS endorsement of that regional center or its EB-5 compliance, nor is it a guarantee of that regional center’s compliance with securities laws. It also does not minimize any investor risk.
USCIS offers this crucial advice: “Potential investors are encouraged to seek professional advice when making any investment decisions.”
We at EB5 Diligence fully agree with this statement. It is the reason why we exist: to give potential investors all the information and due diligence they need about regional center projects so they can make an informed decision. Thus due diligence can maximize an investor’s chance of getting a Green Card and return of their investment capital.
"Our work with EB5 Diligence has been great. They asked all the right questions and knew exactly what they were looking for. The turn-around time on the report was quick and we were given the opportunity to provide more documentation."
EB5 Capital Regional Center
“What impressed me most about EB5 Diligence was their report hit all the essential bases with clearly defined investigative parameters. Site visits, interviews with managers, background checks, financial analysis illustrated by graphs and charts make the EB5 Diligence report an excellent tool. EB5 Diligence has set a sound standard for the regional center industry to follow.”
Pacific-Northwest EB-5 Regional Center and President of IIUSA