Common Misconceptions about EB-5 Regional Centers
The EB-5 Immigrant Investor Program is one of the fastest ways to permanent U.S. residence. One route to an EB-5 visa green card is by way of investment into an approved EB-5 Regional Center. The EB-5 Regional Center Investment Program, also known as the EB-5 Investor Pilot Program, was created in 1993. Since the pilot program is relatively new, there is a lot of information that is either unknown or unclear to many prospective foreign investors.
One common misconception is the popular belief that the older the Regional Center is, the better its chances of success. Certainly the more experienced a Regional Center is, the more knowledge the center has of the program and it may be easier to complete the EB-5 process, however it is still important to verify the Regional Center’s history and the types of projects it has completed in the past. There may be a chance that the regional center has not developed a project for a long amount of time and given the poor business climate of the U.S. in recent years it may not be beneficial to invest in a center that has not developed any projects during or after the recession.
There are many cases where a Regional Center is very successful with one EB-5 project but does not do so well with another. A Regional Center can have multiple ongoing projects which is why it is important to assess the Center’s history and the outcome of each project. Certain project’s may not be as successful as others given their location and the business climate of that particular region.
Another topic has been the belief that selecting a regional center that has the highest rate of return of the investor’s capital is the most important criteria. Indeed, it may be very important to an investor to receive back their invested funds however the bottom line is that the EB-5 is an investment visa. There is always a chance that the program may fail or does not meet the job creation requirement which would lead to not obtaining permanent residence in the U.S. and a chance of losing some or all of their investment. Thoroughly researching the Regional Center before making a decision is the only method to help ensure the success of the center; the emphasis should be placed on the security of the program, employment creation, and sound exit strategies when examining the regional center.
With over 100 different EB-5 Regional Center projects all over the United States, hiring an EB-5 consultant can help with providing in-depth reports on each Regional Center to assist the investor in making their final decision. Ultimately, it is the investor’s decision on which center to choose, the consulter simply provides all of the information pertaining to the centers to make the process easier.
It is important for the foreign investor to be cautious when dealing with a Regional Center’s own sales staff, and not use an EB-5 consultant or doing their own research. Many Regional Centers have a severely persuasive and biased sales force that have, in the past, has made false claims and left the investor in an unfavorable position. Never rely solely on the information given in a regional center’s brochure or what they may say. Instead, investigate their track record and even ask for references that can be contacted to evaluate if the Regional Center is a good choice or not.
Some regional centers offer tours for potential foreign investors. These conducted tours are useful but can be used as a sales tactic. Having an EB-5 consultant accompany the investor on the tour would be much more safe and helpful. An EB-5 consultant knows what to ask and what to look for, getting past the sales talk and down to the facts and history of the Regional Center.