Direct vs regional center EB-5 investments: Which is the best investment option for you?

Direct vs regional center EB-5 investments: Which is the best investment option for you?

Post-1990, the EB-5 immigration program enabled foreign entrepreneurs or small businesses to relocate to the United States with families and relish permanent residency status.

It aims for foreign direct investment in new business, priming the development of rural and high-unemployment regions. Investors could qualify for a green card in exchange for allowing assets. 

Interested businesses must create ten full-time employment opportunities in compliance with the United States and Citizenship and Immigration Services (USCIS).

The program is beneficial and all-inclusive as it optimizes the local economy and provides investors easy access to capital.

  • Leverage opportunities to invest in foreign business
  • Benefits of EB-5 direct investment for business owners
  • Benefits of investing in EB-5 investments through the regional center
  • Direct investment vs. Regional center investment: Which one to opt for?
  • Businesses immigrant investors can invest in
  • Requirements for EB-5 investors
    • a)    Sufficient Job Creation Potential
    • b)    Permanent Green Card holders
    • c)    Visionary and practical job projections plan
    • d)    Must keep EB-5 funds invested for 2 years
    • e)    Provide an authentic source of the funds
  • Tips to ensure the best bet with regional center investments
  • Documents required for filing and qualifying EB-5 visa
    • Project documents
    • Financial documents
    • Personal documents
    • Bottom Line

Leverage opportunities to invest in foreign business

EB-5 US Visa is an Immigrant Investor Program that permits international investors with spouses and unmarried children (below 21 years) to get a green card by investing in US-based businesses.

To qualify for an EB-5 immigration visa, an investor can directly invest or invest through a regional center.

Benefits of EB-5 direct investment for business owners

International or immigration businesses may leverage the following benefits under the EB-5 program:

  • Assured ticket to permanent residency on meeting the minimum investment and job creation requirements.
  • He is either the sole business owner or a partner sharing significant control over the business as a direct investor
  • Direct investors cannot take any credit for the indirect jobs
  • The jobs created by the respected business count as direct jobs

Get jobs (government or private), set up businesses, and lead a retirement life without any sponsorship obligations.

Benefits of investing in EB-5 investments through the regional center

EB-5 regional centers are agencies that help businesses set up a new commercial enterprise. These are USCIS affiliated. The affiliation states that the operations conducted align with economic development and growth.

Though investing in EB-5 through direct investments is beneficial, supporting through regional centers grants more flexibility. Here is how:

  • It eliminates any requirement for involvement in day-to-day business management and interactions. The regional center caters to everything on a business’s behalf.
  • No need to prove a direct job due to investment
  • The immigrant business share flexibility to develop their own business and jobs instead of creating 10 employments in the respective sector.
  • A regional Centre’s track record helps a business grow to bag better projects.
  • The amount you need to invest is $5,00,000. It is easier to get approved for. 
  • Regional centers can take credit for the job creation leading to revenue upliftment.
  • You can demonstrate indirect job creation as proof of employment.

The primary benefit of applying with a prestigious regional center is that investors can secure exemplary approval.

This approval almost approves the 1-526 petition. It is a petition that international business owners must file to get lawful status as an immigrant business entity.

Direct investment vs. Regional center investment: Which one to opt for?

The below parameters will help you choose the best.

Parameters Direct investment  Regional investments
Flexibility Nearly absent Yes
Futuristic No Yes, as experts lead it in the industry
Paperwork and Approval May take long Hassle-free
Role New commercial enterprises must maintain payroll and records to prove a salaried employee onboarding. No requirement to keep track of payrolls and new hires.
Which one is right for you? It is ideal for businesses who wish to gain green card access by investing in existing companies. It is an excellent opportunity for investors to obtain a permanent green card rather than manage a new business.

Businesses prefer regional centers for their breakthrough marketing efforts.

As per facts, 95% of business contribution in EB-5 investments is through regional centers.

With this frame, it becomes easier to achieve job creation goals in the US.

Businesses immigrant investors can invest in

A new commercial business that the investors can invest in must be legally authorized. These businesses include:

  • Partnership
  • Sole Proprietorship
  • Holding company and its subsidiaries
  • Corporation
  • Joint Venture
  • Limited Liability Company (LLC)
  • Other businesses that one can own publicly or privately

*An immigrant business entity is prohibited from investing in residential premises or non-commercial property.

Requirements for EB-5 investors

To determine whether your business qualifies for the EB-5 direct investments, consider the below aspects:

a)    Sufficient Job Creation Potential

Each EB-5 investor business, apart from hiring 10 employees, must ensure 35 hours/per week.

One must follow this for 2 years. The involved companies must keep a detailed record of the same.

b)    Permanent Green Card holders

The authority prioritizes businesses with minor immigration risks. EB-5 investors must ensure a permanent green card for themselves and respected family members.

c)    Visionary and practical job projections plan

Plausible job creation projections must be there in the I-526 application. It is filed under 203(b) (5) of the Immigration and Nationality Act.

The business plan under this must include an operational and employment creation plan post 2-3 years of application approval. It should detail-

  • Hiring schedule
  • Basis of hiring
  • Detailed job descriptions (JD)
  • how the EB-5 business program aligns with EB-5 direct investment requirement

d)    Must keep EB-5 funds invested for 2 years

An immigrant business must keep the funds invested until he holds the temporary green card for at least 2 years.

If one repays the investment amount before 2 years, he will be ineligible for permanent residency under the EB-5 program.

e)    Provide an authentic source of the funds

The USCIS screening process involves a detailed analysis of the investment funds.

An EB-5 applicant may have different sources of funds. He must work with the lawyer to identify the funds to list.

In the case of a loan, the business must provide information regarding the pledged collateral.

The leading authority may request evidence of the same. The loan value must be at most 70% of the property value.

The value of the property must be equal to the loan amount. Apart from this, one must list the following with detailed documentation proof:

  • Corporate/partnership tax returns
  • Money received from inheritance
  • Alimony/official court judgments/civil lawsuits proceedings

Gifts (registration of gift for tax purposes)

Tips to ensure the best bet with regional center investments

  • Research and compare the best EB-5 projects
  • Choose a regional Center with an extensive track record
  • It must be a USCIS-approved center
  • Obtain documents for information 
  • Seek independent verification
  • Analyze structural risk
  • Consider the developer’s incentive

Documents required for filing and qualifying EB-5 visa

Project documents

  • Proof of investment made by the respective business in the EB-5 compatible project
  • Evidence of the project in the TEA (Targeted Employment Area)
  • Evidence of the investment made in the new company/enterprise in the US
  • Regional Centers Private Placement Memorandum, LLC Agreement, the Escrow Agreement, and Subscription agreement.

Financial documents

  • Lawful proof of Funding source (Tax and gifts)
  • Tax statements for the last 5 years

Personal documents

  • Scanned passport copies of both the business investor and his dependents
  • Birth and marriage certificates of the investor and dependents
  • Local or national identification document
  • Copies of previously filed immigration applications or fresh ones

Bottom Line

Businesses interested in investing internationally in US-based businesses must align with these requirements.

Leveraging the expert assistance of benign immigration consultants could help you with guidance regarding the legalities of EB-5 Investment through regional centers and citizenship.

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