US EB-5 Regional Center Investor

EB-5 Regional Center Investment

By contrast with its Direct Investment counterpart -- which is also an EB-5 visa --  this visa allows you to invest just USD $500,000, in a “regional center”, which puts your funds to work on your behalf.

The trade-offs for this visa are clear enough: the lower funds minimum is attractive to most, whereas the lack of control of the investment may deter those who would prefer they manage the risks they are taking for themselves.

That said, the program allows you to secure conditional green cards, for you and your immediate family, which allow you to live, work and study anywhere in the US, with no further requirements regarding age, education, or English language.

Regional centers are gov’t approved, but nonetheless remain commercial enterprises, so your funds are at risk. However, the EB-5 program has been in place for over 20 years and it has an excellent record.

Regional centers typically invest in projects such the construction or management of a residential development, hotel or office block, or could involve a regionally appropriate project such as an agricultural or tech development project.

The centers will aim to use your funds to employ at least 10 US workers for a period of at least two years. Once that goal is achieved, you can apply for permanent residency “green cards”. And at the end of the five-year investment period, your funds are returned to you.

 

The Regional Center Program

The Regional Investment Centers are each dedicated to their own distinct industry and geographic focus. Under this program, applicants usually invest USD 500,000 into one of the designated Regional Centre projects, thereby becoming a limited partner in that Regional Centre's new enterprise.

The main benefit of this option is that the day-to-day management of the investment is facilitated by the Regional Centres so that the applicant is free to live and work anywhere in the USA.

However, investors must remain in the USA for at least 180 days each year until unconditional green card status is granted if the applicant wishes to apply for U.S. Citizenship.

Haskew Law can advise and assist international clients with the selection of the most suitable Regional Centre, and handle EB-5 applications.

What is a "targeted employment area"?

The minimum investment is $500,000 in a TEA (Targeted Employment Area). A targeted employment area is a rural area or a geographical area that has experienced unemployment at a rate of at least 150% of the national average rate. Individual states are authorized to designate geographical areas within the state that qualify as targeted employment areas.

What is a Regional Center?

A Regional Center is an entity or economic unit, public or private, approved by the United States Citizenship and Immigration Service (USCIS) to facilitate the pooling of capital by multiple EB-5 investors. Each Regional Center focuses on a specific geographic area within the U.S., and whose goal is to promote economic growth and the creation of new jobs within the designated geographic area. 

Investing in a Regional Center allows the EB-5 investors the ability to invest alongside other EB-5 investors in a pooled vehicle, and to receive credit for both direct and indirect jobs created as a result of the EB-5 investor's investment.

What kinds of projects can be funded with EB-5 funds?

The EB-5 program has been used to finance a myriad of different investment projects. Some of the more common examples include the following:

  • Mixed-use
  • Hotel
  • Sports stadiums
  • Restaurants
  • Manufacturing
  • Medical facilities
  • Entertainment venues
  • Convention centres
  • Office buildings

Restrictions on eligible business types 

The investment must be in a "new commercial enterprise" in the United States. "New" means that the investment must have been made after November 29, 1990. "Commercial" is to be distinguished from a passive, speculative investment, such as a purchase of real estate for use as a personal residence or for potential appreciation in value (as opposed to an active real estate development project).

The U.S. investment can be in any one of four forms: (1) the creation of a new business; (2) the purchase of an existing business, which is reorganized to form a new enterprise; (3) the expansion of an existing business; or (4) the saving of a failing business.

Rules regarding an investment in an existing business 

Investment in an exisiting business must result in a 40% increase either in the net worth or the number of employees of the business.

For example, if a business has a $10 million net worth and employs 50 people, the investment would qualify either if it increases net worth by $4 million or if it results in an expansion of 20 employees.

Creation of employment for U.S. workers

The investment must create full-time employment for at least 10 U.S. citizens or immigrants (permanent resident aliens and other specified immigrant categories). The required 10 positions cannot include the investor or the investor's spouse or children. The 10 jobs must be for employees of the enterprise in which the investment is made and cannot include independent contractors. However, for approved regional centres, the creation of employment can include indirect employment.

When must employment be created?

The EB-5 petition must document that the required 10 jobs will be created within a 2 year period immediately following the approval of the EB-5 petition.

May two or more investors qualify for immigration based upon a pooled investment in a single business?

There is no limit to the number of investors who may qualify for immigration based upon an investment in a single business. However, each investor must invest the required minimum amount, and the number of jobs created must be equal to ten times the number of qualifying foreign investors. For example, if five investors each invest $1 million in a business, they can each qualify for immigration if 50 jobs are created in the business

Do I have to be involved in the day-to-day management of my investment in the FTIDC?

No. The EB-5 regulations require the investor to be involved in management or policy-making in the enterprise. A limited partner in a limited partnership that is properly structured and conforms to the Uniform Limited Partnership Act is sufficiently engaged in the EB-5 enterprise to meet this requirement. 

Is the EB-5 Program suitable for me?

EB-5 investors have many reasons for seeking permanent residency in the United States through the EB-5 Program. They may be seeking economic opportunity, educational opportunity for themselves or their children, or retirement in the U.S. Obtaining an EB-5 visa via a regional center provides these investors with the opportunity and flexibility to live and work permanently in the U.S.

What are the risks?

EB-5 regulations require that all invested capital be "at risk" of loss. Therefore, no investment can be guaranteed - that is, without risk - if it is to qualify as an EB-5 investment. "At risk" generally means subject to normal business and financial risk.

Other risks include the enterprise's failure to meet the direct or indirect job creation requirement. While no investment can be guaranteed, we can guide you towards regional investment centers that are structured specifically to minimize these risks to the greatest extent possible. 

How long will funds remain invested with the FTIDC?

Most FTIDC investment partnerships have a projected life of five years.

How many EB-5 visas are available?

Current U.S. law allocates 10,000 EB-5 visas per year for foreign nationals and their immediate family members (spouses and unmarried children under 21). Of these, 3,000 EB-5 visas are specifically set aside for applicants who invest through a designated Regional Center.

How long will it take to receive a permanent "green card"?

The EB-5 investment process involves multiple steps, and processing times for each step can vary. Overall, the entire process from the initial application to unconditional legal permanent resident ("green card") status, usually takes 27 to 36 months.

What happens if the necessary jobs are not created?

If the necessary jobs will not be created, the investor will not be able to obtain removal of conditions on permanent residence and will lose any legal status in the U.S.

If there will be a change or delay in creating the necessary jobs, it may be necessary for the investor to file a new I-526 petition and obtain a new two year period of conditional permanent residence status. It may not be necessary to do this if the investor can prove at the time of filing of the I-829 petition that all of the necessary jobs will be created within a "reasonable time."

When is it possible to apply for U.S. citizenship?

Four years and nine months after obtaining conditional permanent residence status. Applying for U.S. citizenship is optional.

 

Alternatives to Green Card May Be Preferable

However, for wealthy individuals and families, in particular from the taxation point of view, permanent resident/green card status may actually be worth avoiding. There are many different possibilities to acquire a work permit in the US which does not subject its holder to global taxation.

Possible suitable categories include for example L-1 intra-company manager executive transfers or E-1/2 treaty investor/trader visas, (E Visas can normally be renewed indefinitely). Also often a simple long-term visitors visa may be the appropriate solution if you would like to spend a certain amount of time in the USA but not become subject to worldwide taxation.

EB-5 Regional Center Investment
US Investor visa EB 5

Name: US Passive Investment scheme with Lower Minimum Investment

Description: Actively managing a new business in a new country is not everybody's cuppa. That's especially true if your main goal is to retire! This version of the EB-5 could be what you're looking for. The minimum investment of USD $500,000 is more affordable than other options, and the restrictions are marginal. But with only 10,000 issued annually, there are now regularly queues of applicants. Well worth a look but get advice about how best to pursue it.

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