Joe McCarthy: What EB-5 Investors Really Look for in Regional Centers

The EB-5 process has increasingly become a bigger niche in the financial world. It serves as a highly beneficial option for foreign investors to receive U.S. residency, while stimulating the U.S. economy.  Joseph McCarthy, expert attorney on immigration law, lends his expertise on the specifics of the EB-5 process and insight on what investors are really looking for when selecting a Regional Center.

NES Financial: What is the EB-5 process?

The Immigrant Investor Program, or otherwise known as “EB-5” (the fifth subcategory of employment based visas), is a program implemented by Congress to stimulate the U.S. economy through capital investment from immigrant entrepreneurs who invest in new commercial enterprises or troubled businesses. Foreign investors, once approved, can receive EB-5 visas for lawful permanent residence for themselves and immediate family.

NES Financial: What is a Regional Center?

Federal Regulations define Regional Centers as an economic unit, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment. Essentially, a Regional Center is a special designation within EB-5 law that confers additional benefits within the program.

NES Financial: What are the EB-5 requirements?

There are essentially, two processes with separate requirements that must take place throughout the EB-5 process: one process is for immigrant investors who seek residency through investment, and the other process is for businesses who which to be designated as an EB-5 Regional Centers. Both share the ultimate goal of attracting foreign capital to job-creating enterprises located in the United States.

In order to obtain legal residency, immigrant investors must meet specific requirements by the USCIS (8 C.F.R. 204.6). For instance, at least 10 full-time jobs for qualifying U.S. workers must be created within two years of the immigrant investor’s admission to the U.S. as a Conditional Permanent Resident (CPR).  The regulations also require a minimum investment of either $500,000 or $1,000,000 in a new U.S. commercial development, depending on whether the investment is in a Targeted Employment Area (TEA).

Investment documentation must be provided as well. Providing documents must indicate the actual transfer or commitment of funds by the investor, the lawful source of the investor’s funds, the investment in a new commercial enterprise, the involvement of the investor in the business, and the actual creation or comprehensive plan of 10 full-time positions.

Regional Centers, on the other hand, must submit a proposal to USCIS for approval. Their proposal must indicate:

  • How the Regional Center plans to focus on a geographical region within the United States, and must explain how the Regional Center will achieve economic growth within this regional area;
  • That the Regional Center’s business plan can be relied upon as a viable business model stating market conditions, project costs, and activity timelines;
  • How, in verifiable detail (using economic models in some instances), jobs will be created directly or indirectly through capital investments made in accordance with the Regional Center’s business plan; and,
  • The amount and source of capital committed to the project and the promotional efforts made and planned for the business project.

Businesses who successfully receive Regional Center designation are far more successful in attracting EB-5 capital.  Statistics from the State Department show that greater than 90% of EB-5 investments are made through federally approved Regional Centers.  The amount of capital is impressive too.  Last year, more than $690 million dollars was invested through EB-5 and it’s apparent that figure will eclipse $1 billion this year.

NES Financial: What are EB-5 investors looking for in a Regional Center?

Because vast amounts of investor dollars are involved, financial security is among the most important precautions for Regional Centers. Because so much investment is being put forth by investors, providing extensive security of their funds is crucial.

Answers on this blog have been prepared by the law firm of McAdam & McCarthy for informational purposes only. Nothing herein is intended as legal advice. You should not rely upon any information as a source of legal advice, and receipt of any such information by you does not create an attorney-client relationship between you and the law firm of McAdam & McCarthy.  
2017-05-14T21:30:30+00:00 July 12th, 2011|Categories: Uncategorized|