The US Citizenship and Immigration Services has approved a total of 783 regional centers throughout the United States to absorb EB-5 investments for the benefit of the local economy. Most of these centers are located in Targeted Employment Areas.
Most investors choose to invest indirectly into regional centers rather than investing directly in a new commercial enterprise. The same minimum investment amounts apply, and the regional center will disperse the investment capital to various enterprises.
Cutting Through Red Tape
The relaxed job-creation rules for regional center investments mean that the investor’s burden of proving that his investment will create 10 full-time jobs becomes much easier. A regional center investor does not have to prove that his investment will directly create 10 full-time jobs.
Instead, the 10-job requirement can be met by creating jobs indirectly in enterprises that are affiliated with the regional center. The regional center itself can help document this.
Unlike a direct investment, the investor does not have to prove that he has established a “new commercial enterprise” or its equivalent. Instead, he will act as a passive investor and will not make major decisions except through his voting rights as a shareholder.
Investments are relatively safe, but they typically offer a low return on investment. It is also easier to prove that your investment is located in a Targeted Employment Area, since the regional center has already established this with the USCS.
All in all, the paperwork is considerably simpler when you invest in a regional center rather than investing directly into a new commercial enterprise. Nevertheless, if you seek to invest in a more prosperous area with better economic prospects (not a TEA), your options will be more limited if you invest in a regional center.