LAW OFFICE OF JIMENA G. CABRERA
SPECIALIZING EXCLUSIVELY IN IMMIGRATION LAW
EB-5 INVESTOR REPRESENTATION
Regional Center-Based EB-5 visas might be the best choice when the investor's overarching goal is to obtain green cards for her/his family.
The Regional Center Program was enacted in 1992 as a pilot program and it has been reenacted since then. On December 21, 2020, the House and the Senate passed the Consolidated Appropriations Act, 2021. The Act was signed by the President on December 27, 2020. The Consolidated Appropriations Act, 2012 extends the EB-5 Regional Center Program until June 30, 2021.
Regional Centers are private or public entities that sponsor capital investment projects that seek investment from EB-5 investors. USCIS designates an entity as a “Regional Center” on the basis of a proposal for economic growth in a particular geographic area. As of Dec. 7, 2020, there are 673 approved regional centers.
Approximately 90-95% of EB-5 applications submitted to USCIS fall into this category.
From the 10,000 visas available to the EB-5 category each fiscal year, 3,000 are reserved for applicants who invest in a commercial enterprise associated with Regional Centers approved by USCIS.
Regional Centers generally afford the investor a low return on investment and generally the ability to re-coupe investment in 5 to 7 years.
It is important to be familiar with the way Regional Centers operate. As you may know, one of the requisites of the EB-5 visa is to invest in a new commercial enterprise; Regional Centers sponsor new commercial enterprises and they may do it, mainly, in two ways:
Generally, the new commercial enterprise is organized as a limited partnership, where the regional center is the general partner and the EB-5 investors are the limited partners.
This occurs when developers/new commercial enterprise "rent" someone else's regional center. In this case, the regional center does not own or control the new commercial enterprise, but gets into a licensing agreement with the developers. In this licensing agreement, the regional center sets obligations to the new commercial enterprise such as to follow the applicable laws and to disclose to the regional center necessary information to do annual mandatory disclosures to USCIS.
It is imperative that a qualified immigration attorney conduct immigration due diligence on the regional center and its projects.
The major advantage of the regional center as compared with a direct investment is that indirect employment creation is allowable. Indirect jobs are those jobs shown to have been created collaterally or as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. A foreign investor may only use the indirect job calculation if affiliated with a regional center.
With the Regional Center Program, in many cases, the sole remaining issues are tracing the funds from the investor to the regional center and proving the lawful source of the investor’s funds. This means Regional Centers eliminate the need to deal with the many complicated issues involved in an individual or direct EB-5 petition such as whether the investment entity qualifies as a "new commercial enterprise;" whether the investment is in a "troubled business;" and whether the requisite "direct employment creation" has taken place.
Regional Centers come in various shapes and forms, but a reputable Regional Center will offer its investors a business plan that includes an exit strategy that allows EB-5 investors the return of their investment in about 5 to 7 years. It is important to note that the investment is at-risk and return of investment is not guarantee.