EB5 Investors Magazine Volume 1 Issue 1 | Page 57

Other requirements directly relate to the investment project and its business plan . A business entity seeking Regional Center designation shall be ready to spend substantial funds to hire professionals for preparation of the business plan accompanied by economic and statistical reports in support of job counts and forecasted economic results . It is also necessary to prove that the investment project implementation would result in a positive impact on the region .
Additionally , the application process for Regional Center under the EB-5 Immigrant Investor Pilot Program is quite costly ( as it requires a $ 6,230 fee ). The average processing time for the application is about nine months . Moreover , after a business entity receives the desired designation from the USCIS , it is required to demonstrate an approved Regional Center ’ s continued eligibility for the designation every year by filing form I-924A . It does not require a governmental fee , but a Regional Center will definitely need to budget for expenses on lawyers , economists and marketing analysts on an annual basis .
The USCIS , in turn , has enforced additional rules to control activities of the Regional
Centers . As a result , compliance with
Security and Exchange Commission rules has become one of the most vital aspects for all active Regional Centers .
Despite the above mentioned complexities , many Regional Centers have successfully received USCIS designation since 1992 . The vast majority of EB-5 money is funneled through Regional Centers ( the number of which has increased up to 251 in 2012 from only 11 in 2007 ). However , this impressive statistic does not indicate that it has become easier to obtain USCIS designation , nor that each project promoted by a Regional Center receives the projected amount of funds from foreign investors . Recent information illustrates that the USCIS is stuck with processing of applications for Regional Center designation and many applicants have been waiting for adjudications for over 10 months . These delays are probably caused by the fact that many projects , “ have gone bust and some are in legal disputes alleging fraud which cast doubt on the immigration agency ’ s ability to effectively monitor the program .” 2 The USCIS , in turn , has enforced additional rules to control activities of the Regional Centers . As a result , compliance with Security and Exchange Commission rules has become one of the most vital aspects for all active Regional Centers .
The entities offering investments must either register with the SEC or qualify for an exemption , and they must follow stringent rules on how they market their investments and which assurances they give while marketing . The USCIS strives to restrain activities of unauthorized brokers who have been reported to receive up to $ 100,000 in commission for each investor they bring to a Regional Center . Non-compliance with even basic securities regulations could result in fines and penalties for a Regional Center , meaning the investors could sue them to recover money .
Therefore , those who are planning to attract capital by means of the EB-5 Program shall consider each and every aspect of becoming a designated Regional Center . It might not be worth trying to get a Regional Center designation for a single project , especially as it is not uncommon for the process to take many years . In most cases , acting under the standard EB-5 Program would be much more efficient for business owners who have prepared a comprehensive business plan for their project and managed to find interested foreign investors . It is important to understand that EB-5 requirements for an investor under the pilot program are essentially the same as in the standard EB-5 investor program . It is a realistic business plan with a detailed explanation of business necessity , investment objectives and the number of full-time positions to be created that matters . In order for investors to be qualified for the lower investment threshold of $ 500,000 , a business entity may do research on the geographic area where it operates and obtain appropriate documentation from the local government to prove that the investment project is to take place within a TEA . So in many cases , it is probably better to revise the business model rather than try to get Regional Center designation .
In conclusion , we encourage entrepreneurs who are ready to engage in business relationships with foreign investors to focus first of all on their strategic goals . For those interested in cooperation with developing companies on various projects , designation as Regional Center would be the best way to attract and coordinate substanti ¬¬ al amounts of foreign capital . Those planning a particular project to expand existing business , or establish their presence in a new market , shall rather use foreign investment under the standard EB-5 Program , and those seeking funds for implementation of an existing investment project or business idea may always try to cooperate with a Regional Center on the project promotion .
Elizabeth Krukova , Esquire , is a founding partner of National Capital Legal Services , Inc . and an expert in immigration related matters , including green cards and EB-5 investor visas . She completed her Juris Doctorate degree at Moscow State Law Academy in Moscow , Russia and her Masters degree in Law at Indiana University of Law . Elizabeth specializes in investment based immigration , cross-border transactions and corporate law .
1 . USCIS official website : http :// www . uscis . gov / portal / site / uscis / menuitem . eb1d4c2a3e5b9ac89243c6a7543f6d1a / vgnextoid = 2785a5f224a2e210VgnVC M100000082ca60aRCRD & vgnextchannel = 2785a5f224a2e210VgnVCM100 000082ca60aRCRD
2 . Sarah Ryley , The Daily , “ Investor Visa ” Probe http :// www . thedaily . com / article / 2012 / 09 / 10 / 091012-news-investor-visa /
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