Many prospective foreign investors who are interested in EB-5 immigration are unsure as to whether they should invest through an EB-5 regional center or if they would be better off directly investing in a project or business venture of their own creation.
This article explores the two pathways for EB-5 immigration – direct EB-5 investment and regional center investment – and how they differ.
The path you should choose will ultimately depend on what your personal goals and abilities are and how you prefer to use your abilities to meet your goals.
EB-5 Immigration through Direct Investment
If you are the kind of investor who would like to operate your own business in the United States, feels qualified to open and operate this business, and who is willing to operate this business under the scrutiny of the United States Citizenship and Immigration Services (USCIS), a direct EB-5 investment may be a good option for you. (Note that your new enterprise will also be subject to U.S. corporate, tax, and employment laws and regulations.)
If you plan to open and operate your own business in the United States, you must understand that to qualify for EB-5 immigration with a $500,000 investment, you will need to open that business in a Targeted Employment Area (TEA). A TEA is a geographic area meeting certain requirements allowing it to qualify for the reduced $500,000 investment level. If your business is not located in a TEA, then the minimum investment required is at least $1,000,000.
Under either path, direct or regional center, each investor must prove to USCIS that the requisite 10 full-time U.S. jobs were created through the investment. The direct EB-5 investment option typically relies on direct-hire jobs. This means that the business that you open and operate in the United States must create (and document) jobs for at least 10 US citizens or permanent residents. This can be a very difficult requirement to fulfill, depending on the business type you undertake.
Also, with a direct EB-5 investment, you will be required to prove that you maintain direct ownership and some managerial control over the business that you open and operate in the United States. This means that you must be engaged in the management of your business and in making the decisions that come along with this kind of business. There are, however, some business models you can consider that will allow you to straddle the line between a hands-on and a more hands-off approach to the management of your business.
Generally speaking, the reasons that some EB-5 investors choose direct EB-5 investment immigration is because they:
- Feel qualified to operate their own business
- Want to manage their own business
- Feel that if they operate their own business, their investment will be safer and offer them a higher return or security.
EB-5 Immigration through Regional Center Investment
The EB-5 regional center program is a perfect alternative for investors who want to qualify for EB-5 immigration, but who don’t want to be actively involved in operating an EB-5-invested business in the United States.
The regional center path has the same minimum investment requirements as the direct EB-5 investment path: an investment project located in a TEA currently qualifies for the lower $500,000 minimum investment while all other (non-TEA) investment projects currently require at least $1,000,000 to be invested in order to qualify under the EB-5 program.
Evidence of creating 10 full-time U.S. jobs must still be submitted to USCIS under this option. With the regional center path, the regional center and investment project work together to gather the necessary evidence for investors to prove that the necessary jobs were created.
David Hirson & Partners, LLP specializes in “pooled direct EB-5 investments” where direct EB-5 investors can potentially enjoy the benefits of regional center investments, depending on the investment project meeting certain conditions. Pooled direct investments will require the direct hiring of 10 full-time workers per EB-5 investor, but could also allow the investor other benefits created under the regional center path.
EB-5 immigration through regional center investment offers the following advantages to investors:
- You will not have to work in the business
- You will not have to live in proximity of the business, meaning that you can live anywhere in the United States
- You will not be required to be actively engaged in managing or making decisions for the business.
- The required U.S. job creation may include both direct and indirect jobs.
That being said, it is extremely important for you to work with your legal counsel and your financial advisor to choose the right regional center and project in which to invest your money. Performing proper due diligence before you invest will demonstrate that:
- The investment meets the requirements for EB-5 immigration. In other words, that it will render you eligible to obtain a conditional green card through the EB-5 program and later a permanent green card.
- The investment meets your requirements in terms of the type of return you expect on your money.
Again, the path to EB-5 immigration that you choose, be it direct investment or regional center investment, should reflect the kind of investor you are and align with your goals and abilities. For more detailed information on the subject, consult with an experienced EB-5 immigration lawyer.
Contact an Experienced EB-5 Immigration Lawyer
This article briefly explains the general differences between direct EB-5 investment and EB-5 regional center investment and their related advantages. However, there remains much more on the subject that you, your attorney, and your financial advisor can explore in more detail with the assistance of a qualified EB-5 immigration attorney. At David Hirson & Partners, LLP, we are familiar with the various requirements that an investor must meet in order to qualify for EB-5 immigration and can help you successfully navigate your immigration process.