Over the last few years, there has been a remarkable growth in the number of EB-5 Regional Center designations. This rise was partially driven by the perceived demand for Regional Center geographic coverage. Real estate developers seeking access to EB-5 capital largely shied away from the administrative burdens and ongoing responsibilities associated with the Regional Center business. Setting aside the legal and rather insignificant government application fees, the barriers to entry in the Regional Center market have been low. The USCIS actually simplified the process when, in the May 30, 2013 EB-5 Adjudications Policy Memorandum (“May 30 Memo”), it obviated the need for offering documents if the Form I-924 application was based on a “hypothetical” project.
The increase in application adjudications that ensued could also be attributed to the efficiency with which the new Washington, D.C. adjudicators are handling the I-924s in stark contrast with the confounding backlog applicants previously faced with the California Service Center. Whatever the reason though, the increase in I-924 designation numbers has not been welcomed by veteran Regional Centers that previously had a much stronger grip on the EB-5 market. Even more vexing for such veterans, however, has been a spike in the general acceptance and usage of the Regional Center rental model.
In NES Financial’s recently published eBook, Navigating a Changing EB-5 Sector: Insights from Experts, Rohit Kapuria of Medallion Partner Klasko Compliance wrote an article expanding on the paragraphs above that looks at the Regional Center “pure” rental model and whether or not it can remain a viable option as the program grows.
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