Five Questions for EB-5 Regional Center Due Diligence

Besides investigating developers and any other parties playing a role in the project, EB-5 investors planning to invest in an EB-5 regional center project should perform thorough due diligence regarding the regional center and its staff. While the project’s investment terms and its connection with the regional center are the most important considerations, these five questions are key to reducing the likelihood of financial loss or immigration failure and ensuring the EB-5 visa process is carried out reputable.

1. Is the organization a USCIS-designated regional center in good standing?

U.S. Citizenship and Immigration Services (USCIS) designates EB-5 regional centers and approves projects. Investors should research the regional center and the project separately to be sure they’re both approved. Steps to confirm the regional centre is USCIS-approved include

  • Visiting the regional center’s website
  • Checking public records
  • Requesting a copy of the regional center’s official USCIS designation letter
  • Viewing the regional center’s most recent I-924A annual filing receipt

It’s not advisable for EB-5 investors to pursue a project if the regional center sponsoring it has not yet been approved by USCIS. Doing so will result in denial of the investor’s I-526 petition.

2. Is the regional center’s team experienced?

Before making any investment, EB-5 investors should dig into the regional center’s history to make sure it’s up to date on its annual USCIS certification and has been continuously organizing projects. The investor should find out how long the regional center has been designated by USCIS and how many projects it has successfully sponsored in that time.

Since 2008, the number of regional centers has grown exponentially. As a result, many regional centers have short histories and may not have many completed projects on the books. When considering an investment through any regional center, but especially a newer regional center with fewer projects, examining the credentials and work experience of the center’s owners and operators is beneficial.

3. Are the owners/operators of the EB-5 regional center qualified?

The investor’s business partnership with the regional center’s owners/operators is likely to last several years, so it’s a good idea to verify their qualifications. One way to go about this is to request biographies or career summaries of all the owners.

Often, regional centre owners and operators have arrived at their position by way of an unconventional career path, without previous experience in private investment or international securities. Successful operation of an EB-5 regional centre hinges on its being staffed by a team of seasoned professionals whose work experience includes years with reputable legal, financial, and consulting firms overseeing domestic and international business transactions.

4. How is the regional centre affected if it fails to comply with USCIS standards?

EB-5 investors take on significant financial and immigration risk, so it’s imperative that regional centers are equally driven to ensure the projects they sponsor are successfully completed.

When regional centers carry out their own EB-5 projects in addition to sponsoring third-party projects, failing to meet USCIS requirements is disastrous because it interferes with both the regional center’s own projects and those developed by its affiliates. For these regional centers, failure to comply with EB-5 program requirements means losing more than just rental income. Their interests are parallel to the investor’s, so they’re more motivated to guarantee success.

5. Does the regional center have a record of success?

Of all the questions to ask when conducting due diligence, this one is the most essential. An excellent track record doesn’t guarantee future approvals, but it is meaningful. Although newer EB-5 regional centres may not have the hundreds of approved I-526 applications that older centers do, any denials should be considered red flags. Denials of I-526 or I-829 petitions could suggest that the regional center isn’t complying with USCIS requirements, which increases the risk of your petition being denied.

For more information about licencing EB-5 regional centres and maximizing your chances of successful EB-5 investment, contact EB5 Economist at (800) 775-1988.