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Regional centers are entities that manage and direct investment funds on behalf of foreign investors. These entities may be public or private and are generally responsible for the economic development, through EB5 investments, of specific regional areas.
Although investing through a Regional Center is a great idea for investors who are more concerned with getting a visa than with actually running or managing a business venture, investors are not required to invest through a regional center in order to qualify for an EB5 investor visa.
Direct Investment Allowed
U.S. immigration policy allows foreign investors the chance to qualify for an EB5 investor visa by investing a substantial amount of capital in the U.S. economy. This investment does not need to be made through a Regional Center, but it is required to meet certain standards outlined by the government.
In particular, for a direct investment to qualify as substantial under the EB5 program, it must create visible economic growth. This can be shown through the creation of at least 10 jobs for new business ventures, or through an expansion in net worth by at least 40% if investing into an existing venture.
Should I Invest Directly or Through a Regional Center?
Direct investments are allowed, but typically only advised for entrepreneurs with private business experience who want to take a hands on approach to building or managing the U.S. based venture. A benefit to investing through a Regional Center is that investors don’t have to find or be directly involved with a venture of their own in order to be awarded an investor’s visa.
When cash is invested, the Regional Center takes over the management of the funds and directs them to area entrepreneurs and businesses in need of capital. In exchange for managing the funds on behalf of an investor, Regional Centers will collect a nominal fee that spreads the cost of fund maintenance across several investors.
Further, investors who invest through Regional Centers are also allowed certain exceptions. For example, they do not have to personally show that an investment will create growth, because this would be handled by the Center, on the investor’s behalf.
Deciding whether or not to invest directly or through a Regional Center is really a question of how involved the investor wants to be and how much work the investor wants to do in order to receive the EB5 visa.
Requirements Are the Same
Whether or not they decide to invest in a Regional Center or into a venture directly, foreign investors must still meet the same requirements. The money invested must be at least $500,000 in designated industries or at least $1,000,000 in all others. The source of the funds must be legitimate and well documented. Unless they can show that all of these additional requirements have been met, it won’t matter whether or not the investment was made directly or through a Regional Center, because EB5 approval is unlikely.
For more specific advice on the EB5 process, contact a credentialed immigration attorney.