This article discusses the basics of EB-5 regional center investments.
Learn the answers to common questions potential investors have regarding EB-5 regional center investments.
Discover the benefits and advantages of EB-5 regional center investments.
What is a regional center?A regional center is a public or private organization that once designated by USCIS, can facilitate investment in job-creating projects. What are the major advantages of using a regional center?
- A regional center can count indirect and induced job creation. An EB-5 investor must be credited with creating 10 jobs for qualified U.S. workers. The ability to count indirect and induced jobs lowers the challenge of meeting the job creation requirements under the EB-5 Program.
- Investors who choose projects affiliated with regional centers do not have to worry about participating in the day-to-day management of the project. Instead, an investor can meet the EB-5 Program requirements by merely being involved in policy formation.
- Since investors do not have to run the day-to-day management of the project, they can live anywhere in the U.S. They are not tied to living near their investment. This is extremely beneficial to investors who want to live in highly sought after school districts for their children. A qualified EB-5 investor can obtain green cards for their spouse and their unmarried children under the age of twenty-one, under one application.
Are there many regional centers to choose from?An investor can choose from hundreds of EB-5 Regional Centers designated by USCIS. An investor must conduct due diligence on any regional center they are considering working with. EB-5 investors must choose at-risk projects. Any regional center project that guarantees a return on their investment will not qualify in the EB-5 Program.What is the role of a regional center?
- They identify potential investment opportunities
- They partner with developers on projects
- They ensure SEC and EB-5 Program compliance
- They market projects internationally
- They assist EB-5 investors
What are the benefits of EB-5 regional center investments in the U.S.?Regional centers often partner with developers on local projects that stimulate the community economy by creating jobs. These communities are often targeted employment areas (TEA). TEA are areas that are rural or have high unemployment rates. The EB-5 Program has been credited with pouring billions of dollars into the United States economy and creating over a hundred thousand jobs for qualified U.S. workers.What is the financial commitment?EB-5 investors must invest a minimum of $1 million into a new commercial enterprise or $500,000 into a TEA project.What is the structure of a regional center investment?Regional centers use private placements for EB-5 investment. Private placement memorandums offer details of the offerings including estimated job creation, project funding, risk disclosure, and federal and state law compliance information.What risks are investors taking when they invest in an EB-5 regional center project?EB-5 investors must place their investment at-risk. They cannot obtain a guaranteed return on their investor, nor can they be guaranteed to receive their principal investment back. This is the same whether an investor chooses the normal program or the Regional Center Program.Is there any downside for a developer to utilize EB-5 capital for their project?Not only is there no downside because there is no added risk of using EB-5 capital, but there is tremendous upside because EB-5 capital investment typically comes at a lower cost than other types of financing. EB-5 investors are primarily concerned with obtaining green cards and not high returns on their investment.
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