The overwhelming majority – roughly 95 percent – of EB-5 visa applicants invest their funds in Regional Centers. Finding an EB-5 Regional Center takes some time, effort and due diligence. It is not that there are not plenty of EB-5 regional centers to choose from, but some are better than others for your specific investment goals. It’s easy to determine a suitable Regional Center once you understand what’s considered a red flag.
Finding an EB-5 Regional Center
Every Regional Center is different, and you must find the one best suited for your investment needs. Some Regional Centers are run by private companies, while others are under state or local government management. Regional Centers may concentrate on specific locations and industries, including:
- Assisted living facilities
- Medical offices
- Office buildings
- Retail buildings
- School construction
If you have experience in a particular industry, you may want to use this knowledge to your advantage when choosing a Regional Center. For example, if you are familiar with medical office construction, it is probably wise to consider a Regional Center with this specialization rather than an industry you know nothing about. That does not mean medical office construction is better than hotel or restaurant building, but you can examine the specifics of the proposal and judge its merits based on your knowledge.
There is nothing wrong with choosing a Regional Center with expertise outside of your purview, but make sure the Regional Center, as well as your immigration lawyer and financial advisor, can answer any questions you have.
Start out by ensuring that any regional centers you are considering have U.S. Citizenship and Immigration Services (USCIS) approval. Verify USCIS approval by requesting a copy of the Regional Center’s designation letter, or its current I-924A receipt. Not only should you avoid any Regional Centers that do not have USCIS approval but stay away from those “awaiting” such approval. Failure to do so could end up threatening your EB-5 application.
Review the Business Plan
Review the Regional Center’s business plan, along with its offering documents. If anything is unclear, ask the Regional Center for clarification or consult your lawyer or financial advisor.
Familiarize Yourself with Management and Owners
Investigate the management and owners of the Regional Center. Request resumes and biographies and follow up the information received with some Google and other searching on your own. A resume may seem impressive, but a quick search could show the person in question has a criminal history.
Job Creation History
Job creation is the key to obtaining your Green Card with an EB-5 visa. A Regional Center must create at least 10 permanent, full-time jobs within two years, or you will not receive your Green Card. Pay particular attention to a Regional Center’s job creation methodology, or you could risk not only a huge sum of money but your opportunity to become a permanent U.S. resident.
Public vs. Private
Overall, a Regional Center run by a government entity or working extensively with a local government is often a better bet than strictly private enterprises, since there is more documentation available. If nothing else, such projects have passed government legal scrutiny and virtually guarantee the legitimacy of the enterprise.
The Track Record
When evaluating any type of business, you must look to its track record, and that holds true for Regional Centers. Obtain a record of the Regional Center’s projects and their outcomes, especially its return on investment for prior buildings.
A regional center’s waiting list is also indicative of quality, but this is a double-edged sword for the EB-5 investor. The top regional centers often have long waiting lists for new investors. While long wait times are a good advertisement for any regional center, the EB-5 visa process may take three years or longer, depending on country of origin. For practical purposes, some investors simply cannot put themselves on a long-term waitlist and may have to go with a less popular Regional Center alternative. Find out a Regional Center’s wait time by contacting them directly.
There is a disclaimer in most investment documents to the effect that past performance is not indicative of future success. That is as true with Regional Centers as any other form of investment, but it is more likely that good past performance is a better measure of future success than mediocre, or even poor, past performance. At the least, there is risk minimization.
Regional Center Returns
Your primary purpose in making an EB-5 investment in a regional center is obtaining a Green Card. While making money with your EB-5 investment is a worthy goal, unlike other types of investments receiving a high return is secondary when it comes to regional centers. A low return is better than no return, as long as you receive your Green Card, and even some of the most highly rated regional centers may not provide robust returns.
However, reviewing the regional center’s repayment method and exit strategy, especially who is paid back first and when, is crucial when making your investment decision.
While in the process of finding an EB-5 Regional Center, keep an eye out for any red flags. Here are signs that something is amiss:
- A Regional Center that will not share information with you. You want a company that is as transparent as possible.
- A Regional Center with a history of form I-526 or I-829 denials. If there are several denials, the company is likely experiencing significant issues.
- Any Securities and Exchange Commission (SEC) violations.
- Previous business failures.
Look for a regional center with an experienced legal team. Structuring an EB-5 regional center project is complicated, and you do not want attorneys who are learning on the job.
There are plenty of legitimate and successful regional centers around, so do not waste your time with any that sound dicey. Trust your instincts. If your gut tells you something is just not right, listen to it.
How Lightstone Can Help
As one of the largest privately-held real estate companies in the country, Lightstone has more than $6 billion in assets under management and development. With the new minimum financial investments for the EB-5 visa approaching rapidly, time is of the essence for those seeking EB-5 visas for themselves and eligible family members under the current $500,000 threshold. If you would like more information about the EB-5 investment program and how Lightstone can help, please fill out our contact form.