You have two options for EB-5 visa investments: directly (on your own) or through a regional center that has received government approval for a New Commercial enterprise. Both have their own unique benefits and drawbacks, so it can be difficult to decide which is the right option for you.
In this article, we will explore the differences between these two investment options and help you decide which is the best fit for your needs.
The direct investment route is the most common way foreign investors contribute money to a U.S. business. In this type of investment, the investor provides funding directly to the business without going through an intermediary. The minimum investment funds for this type of visa is $1.05 million, although it may be lower if the company is located in Targeted Employment Areas (TEA).
A key requirement for this type of visa is that the investor must prove that their investment will create full-time jobs for at least 10 qualified employees within two years of the petition’s approval.
In addition, these jobs must be direct jobs, which means they must be observable and located within the investment-receiving firm. A direct investment route is a great option for foreign investors who want to be actively involved in the management of their U.S. investments.
Foreign investors looking to finance a business through a regional center may be wondering what exactly that entails. A regional center is an organization that has received government approval to raise and invest capital on behalf of foreign investors.
The minimum investment required is $1.05 million, though this decreases to $800,000 if the investment project is situated in a Targeted Employment Area (TEA). A targeted employment area is designated by USCIS (the United States Citizenship and Immigration Services). It’s important to note that not all regional centers are located in TEAs, but many are.
One key benefit of investing through a regional center program is that it typically takes less time and effort to meet the job-creation criteria than if you were investing as a direct investor.
This is because you can fulfill the criteria by establishing direct or indirect full-time employment for at least ten staff members within two years after the petition’s approval.
Additionally, regional centers often create indirect jobs by investing capital in new commercial companies. Investing in a regional center can be a low-risk way to participate in the U.S. economy and make a difference in an underserved community.
Here’s a brief overview of each option to help you get started:
Even though the regional center investment might be less demanding in certain ways, not all EB-5 investors may find it appealing. The direct approach might be preferable for people who wish to launch their own business or grow an existing one and want more control over their capital and business operations.
A foreign entrepreneur’s principal goal of expanding business operations to the United States may only be ancillary to the requirement to secure permanent status through direct investment.
Additionally, investors looking to optimize earnings may find more possibilities by investing directly as opposed to in a regional center, most of which are situated in TEAs, as business endeavors will often have a higher probability of success in regions with better economic conditions.
Additionally, increasing business control may make gathering information to demonstrate compliance with regulatory obligations simpler, somewhat relieving the burden of proof on direct investors.
However, a solid commercial incentive alone is not enough to make the direct method a good choice; other aspects also need to be considered. The investor must prioritize the possibility of establishing at least 10 qualified full-time positions that are true, recognizable jobs within the business.
Conversely, the regional center method’s indirectness may appeal to less business-driven investors. Regional center investors can take advantage of established, government-approved economic units rather than expending time and energy to build their enterprises.
Ultimately, whether to make a direct EB-5 investment or a regional center EB-5 investment comes down to your personal preferences and needs. There’s no right or wrong answer, so it’s essential to research and figure out which option is best for you before making a final decision.