The EB-5 green card program began in 1990, creating a path to United States residency through economic investments. Regional centers were first created in 1994 to help improve the EB-5 program. The purpose of the regional centers is to function as pools for investors and to find EB-5 projects to deploy the investments. Regional centers are licensed by the United States Citizenship and Immigration Services to fill this role.
EB-5 regional centers can administer investment funds for at least five years and are equipped to protect investor rights and covenants. Recent legal enhancements to the regional center program have increased the centers’ ability to safeguard investor funds and immigration processing. Furthermore, regional center EB-5 projects benefit from the inclusion of indirect and induced job-creation which creates strong job-creation cushions/buffers. Because of this added layer of protection and the high job-creation numbers, regional centers account for the majority of EB-5 visa investments and projects.
Regional centers are familiar with the ideal methods of structuring fundraising for EB-5 projects as well as carefully deploying and maintaining their investments. Regional centers that have received investments collaborate directly with developers to fund projects suited to the EB-5 job creation requirements. At the same time, regional centers work directly with the investors, keeping them informed about their project and investment status. Regional centers also provide investors with necessary information about the immigration process. This information includes which documents are needed, who can apply, the benefits of EB-5 investment, and more.
In the previous EB-5 program (prior to the passing of the RIA), regional centers provided much oversight as they managed and administered the funds throughout the project. In exchange for this, regional centers often strongly profited through the spread/delta in interest points from what they paid investors to what interest rate they then loaned EB-5 investments to the project at. Now post-RIA, all regional centers are required to engage 3rd-party fund administrators for all projects which has devoid them of their major contribution. So, what value do regional centers provide to warrant such high profits? The simple answer is very little. This further highlights the advantage of partnering with a vertically integrated regional center and developer as they likely choose not to profit as a regional center but rather to have safer projects with less financing cost and risk.
EB-5 Investors and regional centers share a similar goal: facilitating legal immigration opportunities. Regional centers work to help investors qualify for the green card program through accreditation and by introducing investors to projects. Investors can work with the regional center to determine whether an $800K or $1.05M project suits them best. The EB-5 program also requires certain checks on the source of investment funds, which regional centers help confirm. Regional centers like ours at Houston EB5 reduce the complexity of the EB-5 application process by providing partnership investments instead of simply identifying potential projects. Once the investor has chosen a project, regional centers provide relevant project documentation to the investor’s immigration attorney. Evidence of job creation is part of the required project documentation that regional centers provide to attorneys during the final stage of the process.
Regional centers are a popular choice for EB-5 green card projects because they can make the process easier and safer than going through it alone. Although EB-5 investors can seek out projects on their own, doing so requires significantly more work with less security and assistance. Stand-alone EB-5 investors rely on starting and running their own businesses and personally hiring and managing at least 10 employees for no shorter than 2 years. Investors who create their own businesses must provide a thorough business plan with their EB-5 application. Working with a regional center can help prevent investors’ stress surrounding running a business, maintaining the necessary number of jobs, and reaching the required job-creation threshold with room to spare. Regional centers handle these aspects of EB-5 projects for investors and applicants, facilitating a smoother immigration process.
A successful EB-5 project is among the quickest methods for receiving a green card and eventual citizenship. Once an EB-5 project is selected and the investment requirement is fulfilled, investors apply for approval. The investor will then have conditional legal residence in the U.S. for two years. During those two years, the regional center will keep investors updated on their investment and project status. The investor can apply for a status adjustment to remove the conditions three months before the conditional residency ends. This results in a permanent green card. The investor can apply for full citizenship after holding the green card for five years. If their EB-5 project proves successful, they can also receive their investment back which typically happens in years 5-7
EB-5 regional centers are beneficial for people looking for one of the fastest methods to immigrate and begin living and working in the U.S. Individuals with temporary visas, like H-1B, can also seek status adjustments and use EB-5 projects to speed up their immigration process. Working with a federally licensed regional center can help limit financial risks by protecting funds, ensuring job-creation, and securing successful projects.
Our team at Houston EB5 represents an award-winning regional center that takes a direct interest in investor progress by developing our own projects. Sharing risk with our investors motivates us to do everything in our power to see their EB-5 project and immigration process succeed. Contact us today to schedule a consultation and get answers to any questions you may have about EB-5 projects.
Our goal is not to profit off EB-5 fundraising as a regional center, but rather aim to profit as a developer of real estate. However, in order for us to do that, we must fully pay dividends owed to EB-5 investors before we can receive a dime of profits. Further, we can only exit the project after the EB-5 investments have safely returned to our investors. This is why we’ve had a 100% success rate in repayment of EB-5 funds, an accomplishment that only the gold-standard of regional centers can say.