What is an EB-5 investment?
There are two ways to make an EB-5 investment. One option is to invest directly in a commercial enterprise as a general or limited partner, sole proprietor, shareholder of a corporation, business trust, or other privately/publicly owned business structure. The majority of EB-5 investors decide to invest in Regional Centers, designated by USCIS to administer EB-5 investment projects and are therefore, responsible for adhering to the USCIS EB-5 program regulations. Regional Centers also face far more lenient regulatory requirements than direct investments. For example, Regional Centers alone can calculate and verify job creation with economic models that do not distinguish between part time and full time workers, rather than showing payroll records. Additionally, Regional Centers can count "indirect jobs" towards the job creation requirement. These are jobs created outside of the New Commercial Enterprise (NCE), but result from EB-5 investment in the NCE. This means that Regional Center investments often have structures involving multiple entities and include debt arrangements.
What are the conveniences of Regional Center sponsored investments?
First and foremost, because Regional Centers must adhere to USCIS regulations, the investor does not have to be actively involved in the business. As such, this kind of investment is better suited for those who want a more hands-off approach whereby they are not responsible for the direct management of their investment. While the investment return of projects through the Regional Centers are low, the professional management of the project will aim to ensure that the project meets all the requirements for EB-5 while the investor can be on the way to receiving his/her green card in a worry-free way. With Regional Centers, fulfilling the job creation requirement is hassle-free. As briefly mentioned before, Regional Center investments need only result in indirect or induced jobs. Indirect jobs can be jobs created in order to supply goods or services to the EB-5 project and count for the job creation requirement. Naturally, as employees will be commissioned to work on the EB-5 project, their income will increase, resulting in greater participation in the community’s economy and therefore more jobs created within the greater community. These induced jobs, too, qualify for the visa requirement.