Difference between EB-5 Direct and Regional Center Investments

In an effort to attract foreign investment to help boost the U.S. economy, Congress created the original EB-5 visa program in 1990 by setting aside 10,000 EB-5 visas per year to allow foreigners to get a green card by investing in a business in the U.S. The EB-5 program is administered by USCIS and has experienced many ups and downs in the past two decades.  Though, in the past decade, the program has evolved into a relatively popular method for foreigners to obtain a green card.

The EB-5 program allows foreigners to invest $1.05 million in a new commercial enterprise.  The program also allows the amount of the investment to be reduced to $800,000 if the business enterprise is located in a “targeted employment area,” which was defined as a rural area or a region with high unemployment.  These designations are updated bi-annually.

Direct Investment

When it comes to types of investments, foreign investors have the option of investing directly in a business enterprise and becoming an active manager of the business. This all depends on what type of involvement an investor wants.  Are you skilled at running your own business; managing the day-to-day operations, directly hiring and overseeing employees, or managing the services or inventory the business offers?  Do you want active management control over how the business operates?  If so, are you and your family ready and willing to move to the geographic region where this business is located to do so?

The direct investment route is not quite as popular as the Regional Center investment route simply because many foreign investors have no desire to participate in management of a business that closely.  Moreover, some investors prefer to live where they want rather than be tethered to the location of where the business enterprise is located.

For investors who value the control and potential profitability of directly managing a business, the direct investment path is their best option.

Regional Center Investments

For investors who are attracted to the ease, flexibility and relative financial security of investing, the Regional Center path might be a better fit.

A Regional Center is a business that the U.S. government has given permission to attract foreign investors under the EB-5 program.  Every Regional Center must be in an area or business venture that USCIS has awarded the status of “designated Regional Center.”

By definition, Regional Centers are a new business enterprise that have already been vetted by USCIS.  Part of the “designation” process requires Regional Centers provide USCIS with a detailed business plan and economic model projections on jobs that will be created from the enterprise.  Thus, it provides for a much more streamlined process for foreign investors to apply for an EB-5 visa and they can live in any state.

Which EB-5 investment path makes the most sense to you?

At Jatoi & de Kirby, A.P.C., we know how important it is for you to get all the information necessary to qualify for an EB-5 visa.  Our immigration attorneys can provide you advice based on your current status and qualifications, allowing peace of mind.  Contact us today for more information.