EB-5 regional centers are a core component of the EB-5 Visa Program.
While foreign investors can either make a direct investment or go through a regional center program, the latter is by far the most popular option.
In fact, 95% of EB-5 investors choose to invest in regional center projects.
In this guide, we explore EB-5 regional centers. We will examine the benefits, how they stack up against other EB-5 investment options and other key information.
EB-5 regional centers are entities designated by the United States Citizenship and Immigration Services (USCIS).
They are required to:
An EB-5 regional center connects investors with project developers. They pool investment funds, which are used to fund large-scale projects. These often involve real estate development or local infrastructure.
EB-5 investors can secure a Green Card in one of two ways. They can either make a direct investment or go through a regional center.
A direct investment is basically any investment that is not made through an EB-5 regional center project. This can include:
The minimum investment amount for both options is the same. Investments in a TEA (targeted employment area) start at $800,000. For non-TEA projects, it is $1,050,000.
Below are some of the key benefits of investing through an EB-5 regional center.
Regional Centers pool funds from multiple EB-5 investors to finance large-scale projects. However, direct investment projects are often funded by one investor.
As a result, EB-5 regional centers offer a much broader range of investment options.
One of the main criteria for the EB-5 program is the creation of at least 10 full-time jobs per investor for U.S. workers.
Unlike the direct investment option, EB-5 regional center projects can count both direct and indirect employment towards this requirement. Let’s take a look at what both of these terms mean.
As the name suggests, direct jobs are those created directly by the job-creating enterprise. This would be those working for an EB-5 business that can be verified through payroll records.
The USCIS policy statement defines indirect jobs as “those that are held outside of the new commercial enterprise but are created as a result of the new commercial enterprise.”
Indirect jobs can be those held by employees of a separate job-creating entity. They can also include those who produce the following that are used by the business:
So, what does this mean for an investor?
Simply put, the job creation requirement is easier to fulfil through an EB-5 regional center. This is because the scope of what is classed as a full-time position is broader.
Direct investments require active involvement in business operations. This means that direct investors play a crucial part in the daily operations and decision-making process.
On the other hand, regional center projects pool funds from multiple investors. This means you could be one of hundreds of other investors in the project.
As a result, EB-5 regional centers allow investors to take a more passive role in the day-to-day management of the business.
Of course, the level of control being a benefit is subjective. However, going through an EB-5 regional center could be the best option for those who want to take a more hands-off approach.
EB-5 regional center investments typically have lower return on investment (ROI) potential when compared to a direct investment project. However, while the ROI is often lower, so is the level of risk.
Another thing for potential investors to consider is the level of protection they get from going through a regional center.
The EB-5 Reform and Integrity Act 2022 introduced new measures that greatly reduce the risk of regional centers misusing funds. On top of this, EB-5 regional centers must undergo a strict application process to gain approval from the USCIS.
One of the key benefits of a regional center is the investor involvement in the EB-5 project.
As we discussed, the investor is often one of hundreds of others who are part of the same project. As a result, they play a passive role in the day-to-day running of the business.
Instead, the EB-5 regional center operator looks after the project. This includes the employment creation side of things.
However, this comes at a cost, as regional centers charge a fee for their services. The average admin fee can be between $80,000 and $85,000. This is in addition to the other costs associated with the EB-5 Visa.
Like any other type of investment, you must pick a suitable EB-5 investment that fits your needs and goals.
The first step is understanding the EB-5 Visa process and ensuring you meet the program requirements. For example, you must be able to invest a minimum of $800,000 in a TEA or $1,050,000 in a non-TEA project.
The next step is to find a regional center project in which to invest. The USCIS publishes a complete list of approved EB-5 Immigrant Investor Program regional centers. Here, you will find all the USCIS-approved regional centers, the state where they operate and their ID number.
This step requires a lot of research. Speaking with an expert is recommended, as they can advise you based on your situation, needs and goals.
EB-5 regional centers are a vital part of the investor visa program.
They play a crucial role in developing and funding projects through foreign investment. They also provide a pathway to U.S. residency for international investors and a streamlined approach for those seeking a Green Card.
Download our factsheet to learn more about the program. Alternatively, speak to one of our specialists.
Holborn Pass is an international leader in investor visas. Our experienced team provides a bespoke, end-to-end service and tailored advice to support your needs.
We are part of the wider Holborn Assets Group, a leading, award-winning financial advisory company with over $2 billion in assets under management (AUM).
We have successfully helped hundreds of people and their families secure golden visas. To find out how we can assist you, book a consultation with one of our advisers.
An EB-5 regional center is an organisation that has been authorised by the U.S. Citizenship and Immigration Services (USCIS) to sponsor capital investment projects for EB-5 immigrant investors. These centers collect investments from various EB-5 investors and use the funds to finance job-creating projects in specific geographic areas.
As the name suggests, with the direct option, the investor directly invests in and manages the business. However, with an EB-5 regional center, investors can invest in a project indirectly. This allows them to meet the EB-5 program requirements through a more passive investment approach.
Investing through an EB-5 regional center offers several benefits. Some of these include:
EB-5 regional centers are subject to rigorous oversight by USCIS. The USCIS reviews and approves regional centers to ensure compliance with program requirements.
Yes, investors have the flexibility to choose from a variety of EB-5 regional centers across different industries and locations.