EB-5 Regional Centers

What is it?

A Regional Center is any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation, and/or an increased domestic capital investment. USCIS rules and regulations establish eligibility criteria for a Regional Center and annual reporting requirements. In most cases, a Regional Center operates a limited partnership for each project, but other entities are permissible.

To encourage immigration through investment and to concentrate investment in specific regions, Congress directed USCIS to set aside 3,000 visas for people who invest in a designated “Regional Center Program.” A “Regional Center” is a designation granted by USCIS on the basis of a proposal for economic growth in the particular geographic area. Approximately 90% to 95% of EB-5 applications submitted to USCIS fall into this category. . 

What are typical Regional Center Programs?

As time passes Regional Center Programs become more diverse. The following are some typical Regional Center Programs: a real estate limited partnership program that offers investment in industrial properties in a specified major city; a limited partnership program that makes low interest loans to businesses in a specified major city; and ownership of an 80-acre almond farm in a specified location in California.

What are the benefits for establishing a Regional Center?

U.S. entrepreneurs may wish to form their own Regional Center to take advantage of the USCIS. pilot program and attract foreign investments to their enterprise. The benefit of forming a Regional Center to receive foreign investments is that it opens the door for the entrepreneur to accept large investments from investors overseas who do not expect a high return. Most investors are more concerned with becoming permanent residents than they are with the rate of return on their investment. Additionally, the costs for setting up a Regional Center are relatively low compared with the associated opportunity costs. There are currently over 400 Regional Centers across the United States. A Regional Center, as defined by USCIS, is “any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.” Regional Center investments must be $1,050,000 million USD or greater, unless the Regional Center is designated as a Targeted Employment Area (TEA), in which case investment amounts are $900,000 USD.

What are the general requirements?

• Invest at least $1,050,000 in a Regional Center or $800,000 if the Regional Center is located in a Targeted Employment Area. The area of the Regional Center must be clearly defined.
• Create 10 new full-time jobs directly or indirectly.
• A detailed description of how the investment within the specified area will create jobs directly or indirectly.
• A detailed administrative structure of the Regional Center which explains how it will promote more investment, assess investor projects, oversee all investment activities, and structure its own investment capital.

What is needed for a Form I-924, Application for Regional Center under the Immigrant Investor Pilot Program?

Investors should have a team of professionals throughout the business plan development and I-924 application stages, including:

• Immigration Attorney, to ensure conformity of business plans and other documents with USCIS policy, review documentation, and prepare and file the petition;
• Bank Escrow Agent, to offer protection for investor’s funds pending EB-5 application approval;
• Economist, for analysis and projection of indirect and direct job creation, TEA establishment, and geographic area determination;
• Business Attorney, to prepare the offering documents, PPM, subscription agreement, and describe the immigration risks of the investment; and
• Business Plan Writer, to draft comprehensive business and operational plans, including a timeline, job creation descriptions, and all other aspects of the proposed Regional Center.

To submit a Regional Center designation proposal to USCIS, the applicant must submit Form I-924 along with the $17,795 filing fee (this includes new designation requests and amended designation requests). The initial application processing time is between seven and twelve months.

The entrepreneurs seeking to form or designate a Regional Center should develop a comprehensive proposal containing the following:

1. A clearly identified contiguous geographical area for the Regional Center;
2. A detailed description of how EB-5 capital investment within the geographical area of the Regional Center will create qualifying EB-5 jobs, either directly or indirectly, supported by economic data, studies, analyses, etc.;
3. A detailed forecast of the proposed Regional Center’s future job creation (either direct or indirect), greater demand for business services, utilities, maintenance and repair, and construction both within and outside of the geographic area of the proposed Regional Center; and
4. A description of the plans to administer, oversee, and manage the proposed Regional Center, including how the center will:
   
   1. Be promoted to attract EB-5 alien investors, including a budget for promotional activity;
   2. Identify, assess, and evaluate proposed immigrant investment projects and enterprises;
   3. Structure its investment capital; and
   4. Oversee investment activities affiliated with, through, or under the sponsorship of the proposed Regional Center. ^[1]

Evidence to demonstrate the above may include:

• Map clearly indicating the contiguous geographical area of the RC;
• Documents evidencing the economic situation of the geographic region;
• Job Creation Projections;
• Business plan;
• Industrial NAICS codes category;
• Evidence that RC is in a TEA (If applicable);
• RC Operational and Marketing plans;
• RC’s Organizational structure and budget;
• Statement from the principal of the Regional Center that explains the methodologies that the Regional Center will use to track the infusion of each investor’s capital into the job-creating enterprise and to allocate the jobs created;
• Draft Subscription Agreements;
• Draft Escrow Agreements;
• Draft Private Placement Memo (PPM);
• RC Corporate documentation;
• Marketing materials;
• Plans to remain in compliance with USCIS monitoring requirements;
• Documents showing investors’ involvement in the RC;
• Procedure the Regional Center will use to perform due diligence on the source of funds of the investors (to ensure they originated from a lawful source); and
• Documentation of community or political support.

Once a Regional Center designation is applied for, USCIS will adjudicate the application within one year. USCIS may adjudicate the application as received, or issue a Request for Evidence (RFE). RFEs describe what is missing in the application, and provide the applicant with an opportunity to provide more evidence before a decision is made. Once approved, the Regional Center must file form I-924A annually to demonstrate their continued eligibility for designation as an approved a Regional Center. The Regional Center must provide information showing the continual promotion of economic growth, improved regional productivity in the defined geographic area, job creation, and increased domestic capital investments in the area.^[2] Additionally, the Regional Center should document all approved I-526 and I-829 applications, the aggregate capital invested, the number of jobs created, information on all investors, and the regional center’s administration methods. If the regional center fails to adequately demonstrate the requirements of I-924A or if USCIS finds the Regional Center “no longer serves the purpose of promoting economic growth. . .”, then USCIS has the authority to terminate the Regional Center.^[3]

Read more about the complex process of setting up an EB-5 Regional Center.

For additional information and assistence, do not hesitate to contact EB-5 Global Business Ventures. Fill out this form, email us, or call 617-536-0584.