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EB-5 Regional Center

A Regional Center is formed by an individual or corporate entity filing an application with the United States Citizenship and Immigration Service (USCIS). Regional Centers are formed to attract high net worth foreign investors seeking to qualify under the EB-5 Entrepreneur Category, for U.S. Permanent Residence (Green Card) by investing a minimum of $1,000,000 in a U.S. based business. If the qualifying investment is located within a rural area and/or an area with high unemployment the minimum investment is reduced to $500,000.

Forming a Regional Center involves expense, time and commitment. American Business Exchange provides hands on assistance in compliance with governmental regulations in formation of Regional Centers.

For each EB-5 investment of $1,000,000 or 500,000 the investor must show that it created or preserved a minimum of 10 full time jobs for American workers.

The principal advantage of a Regional Center is that indirect employment can be counted in job creation. If an EB-5 investor invests in a new manufacturing company that will f employ at least ten workers for each EB-5 investor to be credited with… then a Regional Center is not needed because the job creation threshold can be met through direct employment.

In contrast, if an EB-5 investor invests in a project to construct a hotel, which is then leased to a management company that employs at least ten hotel workers… a Regional Center is needed because the threshold for job creation in this case, can only be met through indirect employment because the hotel employees are not directly employed by the capitalized construction project.

Indirect induced jobs in a Regional Center’s local economy can be justified by an economist utilizing economic job multipliers. For example if a management company of a multifamily apartment complex employs five full time workers, if a Regional Center is formed that number can be multiplied to increase it to the requisite minimum of ten full time jobs.

Another advantage attributable to a Regional Center is that EB-5 investors can qualify by investing in a limited partnership that in turn loans money to a borrower that uses the funds to finance a project. An EB-5 investor may not qualify by directly loaning money to a borrower.

An EB-5 investor is issued a conditional Green Card as if and when their investment funds are “at risk” e.g., deposited in an escrow account. If the investment is in own business, the funds are not considered to be “at risk” unless and until the requisite amount i.e., $500,000/$1million is actually spent.

There are basically two Regional Center models. One takes in investors’ capital and loans it out to a project. The other model involves purchasing an investment project and expanding or rehabilitating it with investors’ capital. A Regional Center may do both. Some are operating a diversified capital fund with investments in multiple projects. This business model involves complex tracing of capital and jobs and is not attractive to prudent investors.

Each Regional Center designates a geographic area for its investment projects. The region may encompass several counties or a whole state. There can be more than one Regional Center in the same area. A person (or group) may set up more than one Regional Center, and the jurisdiction can be expanded by filing an amendment to the Regional Center with USCIS.

A Regional Center must designate the type(s) of economic activity to be funded. The Regional Center application can be amended to include additional economic activities. Regional Center applications are supported by an economic analysis explaining the job creation for each business activity as well as the methodology for measuring job creation.

If an investment project is in a Targeted Employment Area (TEA), the EB-5 immigrant’s investment is $500,000; outside a TEA requires an investment of at least $1 million. A TEA is defined as a rural area (outside a municipality or township with population in excess 20,000) or a high unemployment area (150% above the national rate).

USCIS requires the Regional Center to be adequately capitalized with about $150,000 to $200,000. Capital from EB-5 investor visa applicants cannot be used to set up the Regional Center.
Regional Center

In addition to the owner’s capitalization of the Regional Center, other estimated costs of setting up and obtaining USCIS approval of a Regional Center include fees for:

 •  Economist
 •  Business and securities attorneys
 •  A business plan writer

Once American Business Exchange is informed of the plans for a particular project, a fee will be quoted for preparing a comprehensive application to be filed with USCIS for Regional Center designation. American Business Exchange’s team is composed of seasoned economists, security attorneys and business plan writers that collaborate in successfully filing EB-5 Regional Center applications with USCIS.

American Business Exchange fees are reasonable in comparison to its competitors. With American Business Exchange you get a top notch professionally prepared EB-5 Regional Center application at a budget price.

USCIS’s filing fee for a Regional Center application is $6,230. After approval of a Regional Center application, there are legal fees for ongoing consultation, researching issues, and preparing reports to USCIS.

USCIS Regional Center applications are usually adjudicated within five months.

For more information on how American Business Exchange can help you obtain an EB-5 Regional Center please fill our out Complimentary Consultation form and one of our visa professionals will get back to you with more information.