EB 5 Regional Centers Leading The Way Due To These Factors

1. Qualifying Under the New Rules

There are currently 792 USCIS designated EB 5 regional centers, but they don’t all have projects that qualify under the new EB 5 rules. Some of their projects may no longer be viable under the new rules, while others are slowly determining how to proceed with the changes, and finally some are choosing to legally fight the rule.

The Modernization Regulation was announced in July 2019, giving regional centers roughly four months to begin adapting before the rule went into effect. Some regional centers spent their time rushing financing before the deadline, but some took advantage of this time to begin ensuring that their projects would meet the necessary requirements under the new rules and others already offered projects that would qualify under both the old rules and the new rules.

The EB 5 regional centers leading the way embraced the new rules early on in the process. Or better yet, they never had to make many changes to begin with because they never utilized gerrymandering in targeted employment area designation. One of, if not the biggest change the EB 5 regulation made, was to prevent regional centers from gerrymandering census tracts to try to qualify for targeted employment areas.

Why is targeted employment area designation so important? Regional Center projects that are designated as targeted employment areas (rural or high unemployment areas) qualify for the reduced minimum investment amount requirement $900,000. Non-targeted employment area projects’ minimum investment amount is $1.8 million.

Regional centers  that have not been using gerrymandering census tracts to qualify as a high-unemployment area have a distinct advantage over regional centers that did because they don’t have to find new projects or risk that their current projects won’t qualify under the new rules.

2. Obtaining Permanent Residency for Their Investors

Whether it’s for the business opportunities, the careers, the stable government, or the universities, the US is still a top destination for immigrants investors and their families. To get the highly desirable US green card through the EB 5 Regional Center Program, investors should look for regional centers that have the experience to back up their assertions.

Does the regional center already have investors in the project, how many I-526 petitions and I-829 petitions have received approval? How long has the regional center been around for? Have they completed similar projects with success? Does this project have a job-creation buffer?

Is the project well-organized and are the finances in order? How far along is construction? A project that is further along may be able to offer less risk to investors.What is the exit-plan for investors?

3. Repaying the Investments

Has the regional center returned funds before? Older regional centers may have a track record of returning investor funds while newer regional centers may not have been around long enough to have completed the 5+ year EB-5 process and returned funds.

Does the regional center have experience with the redeployment of funds? Investors from backlogged countries such as Mainland China, Vietnam or India, may want to invest with a regional center that can walk an investor through the complex process of redeployment.

What is the regional center’s track record and history? Past success does not guarantee future success, but a pattern of experience may mitigate some of the risk involved.

Finding the best regional center for you means not only conducting due diligence and asking the questions that matter most to you as an investor, but finding a regional center that is adapting (or better yet, already adapted!) to the new program changes.

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