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eb-5 |
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REGIONAL CENTER PROGRAM |
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BENEFITS OF AN APPROVED EB-5 REGIONAL CENTER
Congress created the fifth employment-based preference (EB-5) immigrant visa category in 1990 for qualified foreigners seeking to invest in a business that will benefit the U.S. economy and create or save at least 10 full-time jobs. The basic amount required to invest is $1 million, although that amount is reduced to $500,000 if the investment is made in a rural or high unemployment area. Of the approximately 10,000 EB-5 green cards available each year, 3,000 are reserved for foreign nationals who invest through a “Regional Center.”
To encourage foreign EB-5 investment in the U.S. economy, Congress created an EB-5 pilot program in 1993. By so doing, Congress permitted the U.S. immigration agency to designate qualified applicants as Regional Centers. A Regional Center is a private enterprise or a regional governmental agency with a targeted investment program within a defined geographic region. In the United States, over 98 percent of immigration investment is conducted through USCIS approved Regional Centers.
A United States Citizenship & Immigration Services (USCIS) approved Regional Center allows qualified foreign investors to invest in United States businesses that create jobs for US residents while allowing the immigrant investor to apply for conditional and then permanent green card status for the investor and their immediate family. Since its creation, the Regional Center program has been extraordinarily successful with ample room to grow. Over the past four years, the number of EB-5 visas issued below the 10,000 visa limit: (i) 1,360 EB-5 Visas (2008), (ii) 806 EB-5 Visas (2007), and (iii) 749 EB-5 Visas (2006). The number of EB-5 Visas continues to increase based on improvements made to the EB-5. According to U.S. State Department records, approximately 1,525 visas have been issued to date in 2009. As a result, the total investment in U.S. businesses has been substantial: |
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| Year |
Eb-5 Visas Issued |
Amount Invested * |
| 2006 |
749 |
$ 374,500,000 |
| 2007 |
806 |
$ 403,000,000 |
| 2008 |
1,360 |
$ 680,000,000 |
| 2009 (to date) |
1,525 |
$ 762,500,000 |
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| * Assumes the reduced $500,000 investment, some visas may have been issued for $1M investments. |
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With 10,000 visas available annually (assuming $500,000 investments), a potential $5 billion is available for investment into U.S. businesses every year.
BENEFITS OF WRIGHT JOHNSON EB-5 CONSULTING
Wright Johnson (WJ) is a national leader in EB-5 Regional Center consulting. In collaboration with American Bar Association recognized Immigration “Top Attorneys,” WJ has become the preferred consulting firm for Regional Center applications and EB-5 immigration visa applications (I-526 & I-829). WJ has successfully performed the econometric analyses required by USCIS federal regulations (8 CFR 204.6(M)(i),(iv), and (v)). To date, WJ is proud to report three USCIS Regional Approvals, two Regional Center application submissions pending approval, and more applications and projects in various stages of development: |
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AMERICAN DREAM FUND- LOS ANGELES REGIONAL CENTER
(located in Los Angeles, California and encompassing the county of Los Angeles) |
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CALIFORNIA GLOBAL ALLIANCE
(located in Fresno, California and encompassing the 12 counties that make up the central valley area) |
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PALM COAST FLORIDA GROUP
(located in St. Augustine, Florida and encompassing the 7 counties that make up the Northeast coastal area) |
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AMERICAN DREAM FUND- LAS VEGAS REGIONAL CENTER
(submitted and pending approval from USCIS encompassing Clark County, Nevada) |
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TENNESSEE VALLEY REGIONAL CENTER
(submitted and pending approval from USCIS encompassing 34 counties in central and eastern Tennessee) |
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ALOHA REGIONAL CENTER
(currently producing the Regional Center application which will includes all counties that make up the State of Hawaii) |
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ORLANDO EB-5 INVESTMENT REGIONAL CENTER
(currently producing the Regional Center application which will includes 9 counties that make up Central Florida) |
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PALM BEACH VETERINARY SPECIALTY HOSPITAL
(stand alone EB-5 projects do not require preapproval by USCIS where all job creation is direct) |
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Additionally, WJ is currently preparing the necessary application materials and analyses to establish additional Regional Centers in Orlando, Hawaii and North Carolina.
Federal guidance and USCIS guidelines are, at best, vague and inconsistent. Our Regional Center experience is a major advantage for WJ and their client. WJ is one of a small number of firms, and the only non-legal firm that fully understands and has “hands on” experience in providing USCIS with what is required to obtain Regional Center designation.
BENEFITS TO EB-5 APPLICANTS
The Regional Center Program is ideal for the retiree or inactive investor because of the (1) security that USCIS approval offers a potential investor, (2) the benefit of “indirect employment creation” that aids an EB-5 investor in meeting the job-creation requirement, and (3) the passive investment nature of the investor in a limited partnership role.
In the current economic climate, foreign investors are being presented with many investment options. The ability of a Regional Center and the specific projects undertaken under the Regional Center umbrella to receive USCIS approval demonstrates that the United States government has vetted the business group and the group has committed their financial and business resources to prepare the materials required for submission of the complex EB-5 application. Further, upon Regional Center designation, the group oversees the acquisition of investment funds, the development and successful operation of the project and the reporting requirements mandated by the USCIS so the investor achieves their immigration goals as well as the return on and of their investment.
An investment through the Regional Center program alleviates the burdensome job-creation requirement. The Regional Center program removes the 10 direct-employee requirement of the Traditional EB-5 Program, and substitutes a less-restrictive “indirect employment creation.” The investor satisfies the requirement by presenting evidence that the project will create 10 new jobs within the Regional Center economy as a result of the proposed project. This is evidenced by a USCIS approved econometric analysis performed by WJ on behalf of the client.
The role of a limited partner satisfies the management requirement imposed by federal regulations, while simultaneously permitting the EB-5 investor to make a passive investment. As a limited partner, the investor has limited policy-making involvement, yet no business making or day-to-day management authority. Thus, for the vast majority of immigrant investors not interested in day-to-day or active management of a business, Regional Center programs offer the most attractive option. This form of business structure also protects the investor, as the investor is only liable to the extent of the amount of their investment.
Another advantage of the Regional Center program is the investor is not required to live in the place of investment. Rather, he or she can live wherever he/she wishes in the United States. For example, the investor may invest in a Regional Center in the State of California, but choose to live in Florida.
Under mandate by Congress, Regional Center EB-5 petitions are given priority often resulting in a quicker path to approval.
A Regional Center must be pre-approved to be eligible for an immigrant investor to apply for an EB-5 Green Card.
THE EB-5 PROCESS
The procedure for obtaining an EB-5 Investor Green Card is relatively straightforward. The investor submits an I-526 application, prepared by an experienced immigration attorney, accompanied by 5 years of tax returns to substantiate the source of investment funds. The funds can be the investor’s own money or in the form of a loan not secured by the EB-5 investment or a gift, which would allow a parent to gift the funds to a son or daughter. Gift taxes, if required in the investor’s home country, must be paid. The investor must also present evidence, through bank transfers and other financial documentation that the invested capital came directly from the investor to the EB-5 enterprise.
After the investor completes their due diligence of the EB-5 project, the investment is made and an investor I-526 petition is filed with USCIS, requiring USCIS to certify that the applicant and the investment are eligible for EB-5 status. The approval of the I-526 petition takes from 4-6 months for Regional Center cases and usually longer for regular program cases. Once USCIS approves the investor’s Green Card, it is conditional for a period of 30 months (two and a half years). Conditional Green Card status confers the same rights as the permanent unconditional Green Card.
Between 21-24 months after the conditional Green Card has been approved, the investor must reconfirm that the investment has been made or is still in place and that the employment requirement has been fulfilled or maintained. An application to remove the conditional Green Card status is filed with USCIS.
Once the condition has been removed, an unconditional Green Card is granted for permanent resident status in the United States. From the time of application for the conditional Green Card until approval of the Removal of Conditions, is approximately four years. Thereafter, in approved Regional Center programs, depending on the terms of the agreement, the investment may be sold, and the investor will maintain the permanent Green Card. U.S. Citizenship is possible approximately two and a half years later ( a total of five years after approval of the conditional Green Card), upon satisfaction of U.S. residence.
Freedom to live anywhere in the United States, a passive form of investment with no required direct management responsibilities (other than a limited partner policy making role), priority standing within the immigration process resulting in an accelerated path to Green Card procurement are all important factors making the EB-5 Immigrant Investor Visa category via a Regional Center program, an ideal investment vehicle for the inactive investor or retiree.
The above summary of the EB-5 Regional Center Program should not be considered as legal advice or a complete description of the program. The prospective investor is strongly urged to contact a knowledgeable immigration attorney to review their specific circumstances. Further, times noted to complete the approval process are approximations and the time required to complete the process are dependent on each individuals specific circumstances. |
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