An EB-5 applicant has the choice between the regular EB-5 Program and the Regional Center Program:
- The direct EB-5 investment in a new commercial enterprise
The direct EB-5 investment structure involves the creation of a new commercial enterprise, which is a business entity, typically a limited partnership or limited liability company. The foreign investor takes the minimum capital required (typically $1,000,000) and invests it directly into the project.These direct investments in new commercial enterprises must create 10 direct jobs for qualified workers, a requirement that can be risky and sometimes be difficult to prove.A few examples of the types of popular projects EB-5 applicants invest in are medical or office buildings, hotels, condominiums, or mixed-use developments.USCIS requires the projects to be "at-risk", meaning EB-5 investors who invest capital directly into the project cannot be guaranteed a return on their investment or enter into agreements that provide protection.For these reasons many EB-5 investors look for investment options that provide added security. This is why the Regional Center Program interests many EB-5 applicants.
- The EB-5 Regional Center Program.
The EB-5 Regional Center Program offers options and protections that the regular EB-5 Program option does not offer. Regional Centers typically market projects located in targeted employment areas (TEAs), which reduces the EB-5 capital requirement from $1,000,000 to $500,000, and appeals to a great number of EB-5 investors.Since the primary concern for EB-5 investors is receiving their green card, Regional Centers can get developers low interest financing. This low interest financing then gives projects a higher chance of success.Regional Centers pool EB-5 investors. EB-5 investors form limited partnership companies which lend money to project developers. The role of a Regional Center is that of a managing member. EB-5 investors do not have to be involved in the day to day managing of the enterprise, whereas the EB-5 applicants who invest in a new commercial enterprise in the regular EB-5 Program, have to be more closely involved in their projects.After Regional Centers pool investors for a project, they work on fulfilling the main EB-5 Program requirement: job creation. Each project must create 10 jobs for each EB-5 investor in a certain timeframe. EB-5 investors need to prove the job creation requirements in order to receive approval for their petitions for green card status. Regional Centers have more flexible job creation requirements. The regular EB-5 Program requires 10 direct jobs be created, while the Regional Center project can create 10 direct, indirect or induced jobs.This means, for instance, if a company is going out of business, a Regional Center could pool EB-5 investor capital into the project and save jobs, fulfilling the EB-5 Program requirements.Many EB-5 investors like the oversight, economy of scale, and security of the Regional Center model. 