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EB-5 Investment Visa through Investment in a Regional Center

by Hamid R. Kashani, Attorney at Law
Nov 07, 2018 (last modified Dec 07, 2018)

What is an EB-5 visa?

EB-5 is an immigrant visa, reserved for those who make an investment in the United States and create jobs. EB-5 refers to the fifth class of employment-based (EB) immigrant visas.

What is an EB-5 regional center?

The EB-5 program requires the noncitizens investors to invest $500,000 ($900,000 starting November 21, 2019) or $1,000,000 ($1,800,000 starting November 21, 2019), depending on the circumstances, in a business and employ at least 10 employees, in order to qualify for an investment visa.  In 1992, Congress enacted the Immigrant Investor Program, which is also known as the Regional Center Program.  The act allows noncitizen investors to invest in a “regional center,” instead of creating and investing in their own business.

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A “regional center” can be any public or private entity, which is engaged in activities aimed at economic growth. You can think of a “regional center” as a corporation or company.

To receive an EB-5 visa through investment in a regional center, the regional center must have been approved by the USCIS.

What are the basic requirements for EB-5 Regional Center Investment visa?

There are two basic requirements:

  1. Amount of Investment. To obtain an EB-5 visa, the non-citizen investor must invest $1 million or greater in a regional center, unless the regional center is located in a Targeted Employment Area (TEA), in which case the investment may be as little as $500,000.
  2. Number of Jobs Created. The investment must create and sustain at least 10 jobs. For those investing in regional centers, these jobs may be direct, indirect or induced jobs.  See Job Classifications for EB-5 Investment.

When you invest in a regional center, the regional center will provide you with documents regarding the funds you have invested and the jobs that your investment has created. You simply submit those documents to the USCIS, when needed. Generally, you would not be required to personally account for the jobs that your investment has created through a regional center investment.

How much would I be required to invest?

The amount of required investment funds depends on the location of the regional center.  If the regional center is located in a Targeted Employment Area (TEA), then $500,000 ($900,000 starting November 21, 2019) of investment would be sufficient. Otherwise, the required investment area would be $1,000,000 ($1,800,000 starting November 21, 2019).

What is a Targeted Employment Area (TEA)?

Targeted Employment Areas (TEA’s) are areas targeted for potential economic development through investment.  TEA’s are either rural areas or depressed urban areas. TEA designation is available for regional centers in rural areas (i.e. areas with populations under 20,000 people outside of a Standard Metropolitan Statistical Area (SMSA) or areas of high unemployment (i.e., areas with unemployment rates of 150% or more of the national rate). TEA’s are not always far away places.  Sometimes, they may be located in the heart of a well known metropolitan area.

What is the process for obtaining an EB-5 visa through investment in a regional center?

The first step in seeking EB-5 immigrant visa through regional center investment is to select a regional center. See Selecting a Regional Center.

Once you have selected the regional center, you will enter into an investment agreement with the regional center, deposit the required funds in an escrow account, and obtain a receipt. Thereafter, you file, with the USCIS, an Immigrant Petition by Alien Entrepreneur (USCIS Form I-526), together with documentation that you will receive from the regional center. You must also provide extensive evidence regarding the sources of the funds you have invested.

To see the current USCIS fee for your petition, see USCIS Fee Schedule.

To see how long the USCIS would take to adjudicate your petition, see USCIS Processing Times.

Premium processing is not available for Immigrant Petitions by Alien Entrepreneur.  In exceptional cases, petitioners may request Expedited Processing of Immigrant Petition by Alien Entrepreneur.

What happens after my "Immigrant Petition by Alien Entrepreneur" is approved?

If you are in the United States and qualify, you may apply for adjustment of status.  If you are outside of the United States or do not qualify to file for adjustment of status, you must go through consular processing, to actually receive an immigrant visa.

Eventually, you will receive a “conditional” permanent resident card, which would be good for two years.  In approximately two (2) years, you must file a second petition to remove the condition on your permanent residence and receive an unrestricted permanent residence. See Removing Condition on Permanent Residence Based on Investment.

When would I be eligible for U.S. citizenship?

You become eligible to apply for citizenship five (5) years after you first become a conditional permanent resident under the EB-5 program. This assumes that you have applied for, and the USCIS has removed, the condition on your permanent residence (as described above) and that you meet all other requirements for citizenship.  See Applying for Naturalization (Citizenship).

How many EB-5 Regional Centers are in the United States?

According to the USCIS, as of August 6, 2018, there were 903 approved regional centers in the United States.

The USCIS maintains a list of approved regional centers. See Immigrant Investor Regional Centers.

The fact that the USCIS has approved a regional center only indicates that the regional center has met certain basic legal requirements. The USCIS does not evaluate the soundness of a regional center’s business plan or business operation. The USCIS’ web site specifically states that its approval of a regional center does not in any way

  • Constitute USCIS endorsement of the activities of that regional center;
  • Guarantee compliance with U.S. securities laws; or
  • Minimize or eliminate risk to the investor.

Immigrant Investor Regional Centers.  The USCIS also maintains a list of regional centers whose status has been terminated. See Regional Center Terminations.  Note that the regional center’s status termination may have happened for a variety of reasons, including project completion.

How should I select a regional center for my investment?

The immigration laws require that your funds to be invested and be at risk.  So, when you are going to invest in a regional center and place your funds at risk, you must ensure that you trust the business which would be utilizing your funds.

The very first thing you need to do in selecting a regional center s to ensure that the regional center in which you plan to invest is in fact an approved regional center. You can do this by checking the USCIS’ list of approved regional center. This is just the start of the process.

After you have selected a few possible regional centers for your potential investment, you must obtain as much information as possible from each regional center. The information you may want to see is the business plan, marketing plan, sale plan, historical operational data, financial data, names and resumes of the regional center’s officers, and any additional information that you and your financial and business advisors deem appropriate. Thereafter, you and your business and financial advisors should be able to make an informed decision regarding potential investment in the regional center.

If you are not already in the United States, you may obtain a visitor visa and actually come to ' the United States to personally visit the regional center and meet its officers.

While attorneys are not qualified or allowed to provide financial advice, they may be able to secure the information and documentation that you desire from the regional centers that you specify and submit them to you for your evaluation.

In short, do not fall for advertisement materials or spam emails with lucrative promises.  See Investor Alert: Investment Scams Exploit Immigrant Investor Program.  There is no substitute for “due diligence” (i.e., careful research and investigation of potential investments).

What are my responsibilities in selecting a regional center?

You should use all reasonable measures to research the regional center before placing your funds as risk. Investments made to secure EB-5 visas, including investments made in regional centers, must be at-risk investments. That means that you may lose all or part of your investment in the same way that you may lose money in any other business.

It is your responsibility to carefully examine and research various business opportunities, secure business information and marketing and sales research data, consult business and financial advisors, and make an informed decision before placing your funds at risk.  Note that attorneys are neither qualified nor allowed to provide financial advice.  Your attorney’s duty is to represent you in light of your direction.

What would be my total cost in securing an EB-5 Regional Center Investment Visa?

Aside from the legally-mandated funds, most regional center also require you to pay them an administrative fee in the range of $50,000 to $100,000.  The USCIS and State Department fees will be around $4,500. Attorney’s fees vary by circumstances.

Note that the administrative fee charged by the regional centers will not be recoverable after you close your investment and cash in.

For how long am I required to maintain my investment?

The short answer is that you must maintain your investment and sustain the required jobs until your Petition by Entrepreneur to Remove Conditions on Permanent Resident Status is approved and you receive your unconditional green card.

Theoretically, maintaining your investment and sustaining the required number of jobs for two years should be enough. Federal regulations specifically provide that a noncitizen investor “will be considered to have sustained the actions required for removal of conditions if he or she has, in good faith, substantially met the capital investment requirement of the statute and continuously maintained his or her capital investment over the two years of conditional residence.” 8 C.F.R. § 216.6(a)(4)(iii).  In practice, the USCIS, by policy, requires investors to maintain their investment and sustain the required number of jobs until their petitions to remove condition on permanent residence are approved.

Note that your ability to cash in your investment at the regional center may be limited by your investment agreement with the regional center and your ability to liquidate your interest in the marketplace.

Related Topics:

EB-5 Direct Investment

Comparison of Direct v. Regional Center EB-5 Investment

 

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