USCIS Regional Center FAQs

What is a Regional Center?

The United States Citizenship and Immigration Services "USCIS" has approved a number of Regional Centers for the purpose of developing and offering EB-5 investment projects. When an investor invests with one of these approved Regional Centers, the investor will not need to prove the creation of direct jobs for ten (10) U.S. workers. Rather, creation of indirect and induced employment based upon econometric projections is sufficient.

Is an investment in a regional center guaranteed?

No. There is both an immigration risk and a financial risk. Regional centers may have a number of different projects. It is possible for a regional center to obtain pre-approval of a specific project. Even if a project is pre-approved, there is an immigration risk as to whether the necessary jobs will be created in order to obtain removal of conditions. There is also financial risk in every investment. For these reasons, it is critical for the investor to choose both the regional center and the regional center project very carefully.

What risks do investors face in EB-5 regional center investments?

By law, EB-5 investments must be “at risk” in the same way that any equity, stock or other type of investment carries inherent risk. Regional centers, like other entities that market investment opportunities, cannot guarantee a return on investment. Regional Centers also cannot guarantee return of the investment principal to the investor.

What risk do companies have in accepting EB-5 investments?

Companies bear no additional risk for EB-5 investment. They interact with the money as any other equity or financing investment, albeit often at a lower cost.

Are EB-5 regional center financing options cheaper for companies than other sources of capital?

Yes. In many instances, EB-5 funding is a lower-cost form of capital than alternatives because investor demand for return on their investment is often lower for EB-5 capital than other sources of capital. In addition, securing EB-5 capital increases the overall liquidity of a business or project which, in turn, reduces the cost of acquiring capital from other sources.

How do EB-5 regional centers help communities?

EB-5 Regional Centers facilitate direct investment in projects that meet the job creation and economic development goals of designated geographic areas. Regional Centers pool investments made by multiple EB-5 investors and deploy that capital to large-scale projects, often in coordination with regional economic development agencies.

What do Regional Centers do?

  • Identify investment opportunities that will create jobs in local communities, often in partnership with economic development agencies.
  • Assist in marketing those investment opportunities to investors from around the world.
  • Ensure that the investment offering complies with federal and state securities laws and SEC regulations as well as specific EB-5 requirements.

Why is the EB-5 Investment Program Important?

A comprehensive peer-reviewed economic study found that during fiscal year 2012, investments made through the EB-5 program contributed $3.39 billion to U.S. GDP and supported over 42,000 U.S. jobs. This is more than a 100 percent increase from the average annual impact result reported in 2011. And, these jobs were created at no cost to taxpayers. The Congressional Budget Office has scored the program as revenue neutral, with administrative costs paid for by applicant fees. More than 25 countries, including Australia and the United Kingdom, use similar programs to attract foreign investments. The American program is more stringent than many others, requiring substantial risk for investors in terms of both their financial investment and immigration status.
  • Investments made through the U.S. EB-5 program must be “at risk” in the same way that investments in stocks or equity funds carry an inherent risk. There is no guaranteed financial return.
  • If their application is approved by USCIS, EB-5 investors receive a conditional visa that is valid for two years. In order to receive a permanent visa, these investors must demonstrate that the legally required economic benefits flowing from their investments have been achieved.
Annually, the EB-5 Program accounts for less than 1% of the visas issued by the U.S. Throughout the process, EB-5 investors are subject to the same background checks and national security screenings as applicants in any other visa category, and their ability to eventually apply for citizenship is subject to the same criteria as other visa holders. Like any other investment vehicle, EB-5 investment funds are subject to U.S. securities and anti-fraud laws and regulations.

What kind of financial commitment do EB-5 investors make?

By law, an EB-5 investor is required to invest a minimum of $1 million, unless the investment is located in a Targeted Employment Area (TEA)—a rural area or area of high-unemployment designated by USCIS. Regional Centers funding projects in TEA’s can accept a minimum of $500,000 from each EB-5 investor.

REGIONAL CENTER V. INDIVIDUAL EB-5

The profiles of the individual EB-5 investor and the regional center EB-5 investor are generally rather different. The individual EB-5 investor generally has the following characteristics:

  • He or she actually wants to start and/or manage a business.
  • His or her business will be creating employment up front.
  • The investment is the driving force behind his or her wanting to come to the US.
  • He or she wants to have control over his or her investment.
  • He or she wants to maximize profits from his or her investment.
On the other hand, the regional center often meets the needs of investors with a different set of characteristics:

  • He or she is not interested in starting a business.
  • He or she may be a retiree.
  • Although he or she may want to start a business, it will not create sufficient employment for an individual EB-5.
  • He or she wants to be geographically mobile.
  • He or she wants to spend a significant amount of his or her time outside of the US.
  • Immigration - - rather than US business - - is the driving force behind his or her investment.
Partly because regional center investments address the needs of the foreign nationals described above, and partly because the standards for individual EB-5 petitions are so restrictive, the number of EB-5 regional center petitions has increased substantially in recent years and now exceeds 90% of the total number of EB-5 petitions filed.

Before discussing the details of EB-5 regional center petition filings, some background is in order. Established in 1992, the U.S. Immigrant Investor Pilot Program has had a troubled past. The program was suspended in 1997 because of two major problems:

  1. Failure by investors to complete their total investments; and
  2. Failure of the investment projects to create jobs.

Under the new guidelines of the program, issued in 2002, regional center investors are now required to invest the full $500,000 before submitting the I-526 petition, thereby resolving the first problem. As will be discussed in more detail below, the second problem has been resolved to a greater extent by some regional centers and to a lesser extent by others. For this reason, choosing the optimal regional center is a critical decision.

The Immigrant Investor Pilot Program remains a "pilot program" with continuing extensions through the present date. The latest extension expires September 30, 2012. Because of the success of the program both in terms of attracting investors and in terms of providing capital for economic development and job creation, as of the date of this article there is an expectation that the pilot program will be extended --perhaps permanently--by Congress.