Almost every potential EB-5 investor has asked us if it is truly safe to invest in the EB-5 Regional Center Program. This question may be one of the most important questions for foreign investor, given that they will be investing US$500,000 or US$1,000,000 in said approved Regional Center and there is no guarantee that the funds will be returned to the EB-5 investor.
Let’s compare both the Direct EB-5 Program and the Regional Center EB-5 Program. Investment in a Direct EB-5 program or Individual EB-5 Program requires a longer and more tedious process than that of the Regional Center EB-5 Program. This includes filing petition for which the investment enterprise has not been pre-approved and providing a detailed business plan with information regarding whether the investment entity qualifies as a “new commercial enterprise;” whether the investment is in a “targeted employment area;” whether the investment is a “troubled business;” how the requisite “job creation” will take place; and whether the investment meets the “establishment” of a new commercial enterprise standard. This program also requires written assessments throughout the creation and construction process from the investor to the United States Citizenship and Immigration Services (USCIS) documenting the progress and development of the EB-5 project. Another requirement is unless the investor can prove that the EB-5 project is designated in either a targeted employment area or a rural area, which would require government approval and consent, the investment for an individual EB-5 program is $1 million as opposed to $500,000. It should be noted that each of these methods is arguably more complicated, with more time-consuming requirements, than investment into a Regional Center.
An investment in the Regional Center EB-5 Program or the Immigrant Investor Pilot Program seems to be the most straightforward way for an applicant to successfully obtain permanent green card through the EB-5 program. This is because the requirements are less complicated than the Direct EB-5 program. The benefits of investing into an EB-5 Regional Center seem to be more of what is not required compared to the Direct EB-5 investment. If you choose a project within a Regional Center that has been approved by the USCIS, certain EB-5 requirements will have been taken care of by the Regional Center in advance. In order for a Regional Center to receive designation or an approval from the USCIS they must submit a business plan for both the Regional Center and the EB-5 Project and provide specific details on the Exit Strategy and how they will return the funds to the investors. The USCIS reviews the information provided carefully and may take up to 4 months to give an approval. This being said, the investment in an approved EB-5 Regional Center is the safer of the two; however, it is crucial that the immigrant investor do their homework prior to making a final decision.
There are some EB-5 visa holders who have taken poor advice and applied unwisely without independent professional advice, or indeed made an inappropriate judgment and selected a center where there have been EB-5 refusals at the I-526 and I-829 stage and some unfortunate few who have suffered the loss of some or all of their funds. However as with any investment, no matter how safe, there is always an element of risk. But it is important to understand that the number of EB-5 visa holders who have lost some or all of their investment is a very small number compared to the number of success stories.
Keep in mind that one way the a loss of some or all of the investment funds can occur when a Regional Center project fails to attract the required number of investors needed to fully fund its program. Unfortunately, there are programs being marketed to investors which are unlikely to ever get off the ground and therefore will not provide the requirements for successful EB-5 applications. This is one of the primary reasons why it is so important to engage the services of an experienced and qualified EB-5 Consultant who has successfully advised people through the EB-5 process over a number of years.
If you are considering investing in the Regional Center EB-5 Program there are several steps you can take to safeguard your process. Number one would be to begin seeking independent and experienced advice at the start of the process. Work with a company who has been in business for several years with a track record of assisting more than 150 individuals just like you. A consultant who has personally visited dozens of EB-5 Regional Centers and approved EB-5 Projects and has worked with many of the leading US Immigration Attorneys who are experienced in the EB-5 program.