Regional Center Due Diligence, What Questions Should You Be Asking?
What regional center due diligence should EB-5 investors conduct?
Regional center due diligence is a major part of the EB-5 process for any potential investor.
Below is a list of some of the main questions investors should ask a regional center.
Past projects:
- Does the regional center have prior experience working with the EB-5 Program?
- Do they have past projects with I-829 approvals?
- Has the regional center successfully return their investors' investments back?
- How similar were the past projects to the current offering?
- What is the contact information for any third parties listed in the offering documents? Potential investors will want to check references to confirm information and data.
- Did they have any issues with the past projects?
Current project:
- What is the exit strategy and can investors get out of the new commercial enterprise?
- How does the regional center mitigate risk?
- What is the capital structure?
- What percentage of the funding comes from EB-5 investment?
- Is there a job creation buffer?
- What is the job creation methodology?
- How are the jobs allocated to the EB-5 investors?
- Is the project located in a TEA?
- Does the regional center recommend project site visits?
- What are the qualifications of the regional center's executive team?
- Does the regional center provide transparency to investors?
- Are investors allowed to see the new commercial enterprises' financial records?
- What are the management fees?
- What are the qualifications of the managers?
- Is the economist independent of the regional center? What is their track record? What methodologies did they use?
Regional center due diligence is an important part of the EB-5 process. Potential investors should discuss their concerns with a qualified EB-5 immigration attorney.