To earn a United States EB-5 green card, investors have two options: direct investment or regional center sponsorship. With direct investments, investors find projects on their own and fund them directly, and with regional centers, investors choose from sponsored projects the regional centers have created or identified. Here is more useful information about direct and regional center investments:
Regional center sponsorship typically allows investors to choose from a more diverse range of projects, because regional centers can tap into their own local resources to find or create projects, and because they can pool funds from multiple investors. Using their own local resources is advantageous because regional centers have native connections that investors are unlikely to have access to. The benefit of pooling funds from multiple investors is that it can reduce the minimum investment amount and make larger projects accessible to those investors.
Direct investment requires investors to find projects and conduct due diligence themselves. This investment approach does not preclude pooling funds for larger projects, but it may make the collaboration process more complicated. Investors who choose this route will need to reach agreements on their own regarding how to collaborate with other investors and project developers and how to enforce those agreements. These factors combine to create significantly more work for investors seeking an EB-5 green card.
EB-5 regional center project sponsorship allows for a more passive investment than direct investment projects. Regional center-sponsored projects do not typically demand significant day-to-day management tasks of investors. The developers that regional centers contract assume the project management responsibilities. A regional center also manages the project’s compliance with the various United States Citizenship and Immigration Services, USCIS, requirements. This allows investors to pursue other work opportunities and reside outside the immediate area of their sponsored projects. Houston EB5 streamlines this process by assuming developer roles for projects, allowing investors to collaborate with just one entity throughout their project.
Direct investment requires investors to participate more actively in the EB-5 project. This includes managing their stake in the project and overseeing its development and success. Maintaining compliance with EB-5 regulations is the responsibility of the investor during a direct investment project. Immigration attorneys may be able to provide guidance or assistance roles, but investors must seek out their help.
To maintain their compliance with USCIS, regional centers report regularly on their job creation statistics. This incentivizes regional centers to sponsor projects with the potential for reliable job creation. It’s beneficial for a regional center to choose or create EB-5 projects with high chances of success. Houston EB5’s commitment to program success has resulted in a 100% project success rate since 2013.
For investors who intend to continue owning and operating a business after completing the visa program, they may favor the direct investment approach, where they can have full control over the job creation aspect of their project. This requirement can put undue pressure on investors whose only objective is securing permanent residency, making it useful to have a clear project goal from the start.
At the conclusion of an EB-5 project, investors must consider how to exit the project. Regional center sponsorship often creates opportunities for investors to continue their investment after the project or depart with no issues after earning residency. Continuing their investment allows the new resident to continue making money from the job creation they contributed to. They can also divest their shares or ownership in the project and use their U.S. residency as they see fit.
Exit strategies can be built into direct investment projects as well, but they may come with the additional challenge of investors needing to create and negotiate them on their own. This may leave investors in a position to accept a project with limited exit strategies. These investors risk being left with an illiquid investment, like a business that the investor no longer wants but struggles to sell.Houston EB5 is open about exit strategy options from the beginning of the process. This helps investors assess and avoid potential exit plan risks.
While direct investment and regional center sponsorship can yield permanent residence visas, regional centers offer more benefits and accelerate the process. By providing a more comprehensive selection of projects and more relaxed job creation requirements, regional centers can make the EB-5 process easier for investors. Houston EB5 eliminates middle management by partnering directly with investors as project developers. Regional center sponsorship also requires less project involvement from investors, enabling them to choose where they live and work during the visa program. Contact our team at Houston EB5 today to schedule a consultation and learn more regional center sponsorship.