Create and Operate an EB-5 Regional Center

Benefits of Becoming an EB-5 Regional Center

Entrepreneurs seeking to raise inexpensive EB-5 investment funds for business projects can raise the funds directly, by affiliating with an EB-5 regional center, or by forming a new regional center. By receiving designation as a USCIS-approved regional center, a business can benefit in unique ways.

The EB-5 program requires each investor to create 10 full-time jobs. Direct investments result in job creation totals that include only directly created positions, but EB-5 regional center projects offer the advantage of being able to count indirect and induced job creation as well as directly created jobs. Regional centers may also raise capital for one project from multiple investors to increase the total amount of EB-5 capital raised toward the project.This advantage doesn’t apply to most direct investments.

Many businesses prefer to rent a regional center rather than applying for regional center designation because the designation process can take more than a year and its costs are substantial. For other businesses, it’s a worth while undertaking. Each business should carefully consider its individual needs when making this important decision.

Basic Requirements for EB-5 Regional Centers

As economic organizations that sponsor capital investment projects in order to promote economic development, EB-5 regional centers can be formed by any US commercial enterprise or government agency. Their objective is to create jobs, attract foreign investment, and increase regional productivity and exports.

While no license is necessary, USCIS does require the interested organization to submit the Application for Regional Center Under the Immigrant Investor Pilot Program, Form I-924, along with its supplementary documentation. At this time, the application fee is $6,230, but the additional cost of assembling the meticulous documentation is typically much more substantial because it requires the assistance of professionals in multiple fields of expertise.

Completing the I-924 Application for EB-5 Regional Center

1. Define Geographic and Industry Scope

Entities seeking regional center designation must establish their geographic scope and industries of focus in accordance with USCIS requirements. Any targeted employment areas (TEAs) the regional center expects to operate in should be mentioned in the application.

2. Assemble Documentation

The following documents accompany every EB-5 regional center application. Attorneys, economists, and other professionals are usually enlisted in the preparation of these documents to ensure accuracy and compliance with USCIS standards.

  • Operational business plan
  • Corporate structure agreement
  • Sample project business plan
  • Economic impact report
  • Legal securities documents
  • Legal immigration documents
  • Sample management agreement between regional center and project

The Administrative Appeals Office (AAO) precedent decision known as Matter of Ho provides the benchmark for USCIS approval of business plans. An acceptable business plan is credible and includes the information listed below. Because of its complexity, it should be drafted by an experienced business plan writer.

  • organizational structure
  • staff experience
  • staffing requirements, including job descriptions and a hiring timetable
  • detailed market analysis
  • market strategy
  • list of required permits and licenses
  • details of any contracts related to supply and distribution
  • descriptions of any manufacturing processes
  • projections for sales, expenses, and income
  • detailed explanation of how these figures were determined

Just as a business plan writer should be hired to prepare the business plan, an economist should be enlisted to prepare the economic report. To obtain USCIS approval, the report must show whether or not the EB-5 project is within the boundaries of a TEA and that it will create enough jobs to meet the program requirements. Besides the simple calculation of directly created jobs, an economist must use accepted methodologies to show that an adequate number of indirect and induced jobs will result from the investment. Indirect jobs are created in other businesses in response to the new enterprise’s demand for goods and services during its operation. Induced jobs are created in other businesses by the direct and indirect employees’ purchasing power.

In addition, a securities attorney with sufficient EB-5 experience should be commissioned to prepare the transactional documents. To prove the EB-5 investment funds have been irrevocably committed to the project with no guarantee of a return, the investor subscription agreement and private placement memorandum must comply with both Securities and Exchange Commission (SEC) and USCIS requirements.

USCIS requires every applicant for regional center status to submit a project with the I-924. The forms of documentation to be submitted with the application depend on the project’s readiness—hypothetical, actual, or exemplar.

  • Hypothetical projects are based on approximated proposals and forecasting without the underpinning of a business plan that complies with Matter of Ho guidelines. For the goal of showing the regional center candidate will effectively promote economic growth, USCIS may approve this type of project.
  • Actual projects offer more complete and precise documentation, including sample transactional documents and a business plan that is comprehensive rather than a sample. This documentation demonstrates through verifiable economic or statistical evidence that the proposed regional center will promote economic development. Predictions rely on economic or statistical evidence to credibly convince reviewers that the regional center will fulfill the goal of stimulating economic development.
  • Exemplar projects provide a sample I-526 petition along with Form I-924, as well as the candidate enterprise’s final organizational and transactional documents.

3. File the Application

Once all the required documentation is organized, the prospective regional center can submit Form I-924 to USCIS. The applicant is permitted to market the project after filing, but may not accept funding until approval is obtained.

EB-5 Regional Center Operation

When USCIS grants approval to the petitioner’s I-924, the entity becomes a newly formed regional center with three primary roles in the EB-5 program.

1. Submit I-526 Applications

Investors who invest in regional center projects submit their I-526 petitions to USCIS through a regional center, along with their actual or exemplar project documentation. Approval of the I-526 grants conditional permanent residency to the investor and his or her dependent family.

2. Sponsor Projects and Maintain USCIS Compliance

The regional center must file form I-924A annually to maintain USCIS compliance or risk losing its designation. An accurate account of job creation by the regional center’s projects is an important part of the I-924A. The regional center must also submit the necessary documentation to comply with state and local regulations enforced by the SEC and other agencies.

3. Compile Supporting Documentation for EB-5 Visa Applicants’ I-829 Petitions

After the two-year conditional residency period, EB-5 investors submit Form I-829 to request removal of the conditions. The EB-5 regional center amasses the supporting documentation for the investor’s I-826 submission.

To learn more about operating or setting up a new EB-5 regional center, contact EB5 Economist online or call (800) 775-1988.