WHAT IS THE DIFFERENCE BETWEEN A REGIONAL CENTER AND A DIRECT EB-5 PROJECT?

First, an overview of what the law says via US Citizenship and Immigration Service (USCIS).

Under the EB-5, entrepreneurs (and their spouses and unmarried children under 21) are eligible to apply for permanent residence if they:

• Make the necessary investment in a commercial enterprise in the United States; and

• Plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.

This program is known as EB-5 for the name of the employment-based fifth preference visa that participants receive.

Congress created the EB-5 Program in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. In 1992, Congress created the Immigrant Investor Program, also known as the Regional Center Program. This sets aside EB-5 visas for participants who invest in commercial enterprises associated with regional centers approved by USCIS based on proposals for promoting economic growth.

So, what are the main differences between the two programs – Regional Centers versus Direct Investment?

Application Time: When the investor is responsible for the entire business plan and investment documentation process, the timeline before making the investment is longer with the direct EB-5 program. When investors do EB-5 via a Regional Center, the application time (to submit I-526) can be as short as a few weeks.

Cost: The direct program requires a $1,000,000 USD  investment versus $500K for the Regional Center program.

Jobs: The direct program only takes Direct W-2  (employee) jobs towards the 10 job requirement mandated by the program. , The Regional center program allows for indirect and induced jobs.

Flexibility: Direct requires investor to actively operate and live near the project, where under the Regional Center program, the investor can live and work wherever they would like.

Popularity: Due to the these reasons, the direct program only attracts 5% of all EB-5 applicants (versus 95% in the

Regional Center program)