Regional Centers

How They Qualify

Regional Centers are started by local U.S. businessmen, sometimes in alliance with local government agencies, in order to attract investment capital for current or planned business ventures. The additional benefit of U.S. permanent residence allows the centers to attract foreign investors even if the financial return is modest. The investments may be in any lawful business, and they vary widely.

Regional Centers Today

There are currently over 600 USCIS designated regional centers. Investments range from commercial real estate to solar energy plants. Most do not have a track record and are therefore not likely to attract investors surveying the entire field. These newer centers rely on foreign agents who generate investors from sales activities overseas where the specific center is the only one presented to investors.

Click to see Current List of EB-5 Pilot Program Regional Centers.

Risk Characteristics

The factors below point to issues which may create risk of 1) loss of principal, or 2) failure to receive unconditional lawful permanent residence status (click on titles to see sub-issues).
Our firm will evaluate:

Legal Risks

Job-Creation Methodology
  • Historical record with USCIS
  • Past problems encountered with job creation methodology
  • Conformance with 12/3/10 letter from USCIS regarding job creation outside geographic area
  • Likelihood of USCIS challenge to job creation plan
Material Changes in Project Plan
  • USCIS definition
  • Material changes in past
  • Review of current business plan
  • Review of contingency plans
Targeted Employment Area
  • Center’s definition of geographic area(s) in Approval Letter
  • Risk of unemployment statistic changes in targeted employment area
  • Risk factors of unemployment statistic changes in U.S. affecting targeted employment area
Securities Law Compliance
  • Management of agents and salespersons for “Regulation D” compliance
  • Management of prohibition against “general solicitation or advertising” by Regional Center
  • Policy on finder’s fees to agents in U.S. who are not registered with SEC
  • Pending lawsuits against the Center, its principals or projects
  • Pending lawsuits initiated by Center
  • History of SEC or other regulatory agency problem
  • Insurance coverage
Systemic Risks
  • Changes in U.S. tax law
  • Changes in U.S. immigration law
  • Prospects for Pilot Program renewal in 2015
Immigration Petition History of Center
  • I-526 petitions approved/pending/denied
  • I-829 petitions approved/pending/denied
  • Review of USCIS Requests for Additional Evidence
  • Review of USCIS denial letters
  • Relevance of past history to future performance

Financial Risks

Equity vs. Loan Based Investment
  • Pluses and minuses of each investment type
  • Investment period and exit opportunities
  • Risk factors compared
Evaluation of Principals
  • History, background and credentials
  • Dun & Bradstreet report
  • Experience with job creation
  • Experience with U.S. immigration
  • Experience with securities law compliance
  • Affiliated immigration attorney
  • Affiliated securities  attorney
Organization Issues
  • Limited partnership vs. limited liability company, strengths and weaknesses
  • Voting rights of partners/members
  • Personnel turnover last two years
Financial Strength of Underlying Business Entity
  • Debt/Equity ratio
  • Net Worth Statement
  • Balance Sheets
  • Cash Flow Statement
  • Operating profit (EBIT and EBITDA)
  • Strategic relationships
  • Bankruptcy risk
Competition Risks
  • Evaluation of major competitors
  • Market trends
  • Restrictions against general partner competing with individual projects
Financial Transparency
  • Investor access to net worth and cash flow statements and other financial documents
  • Frequency of reports to partners/members
Exit Strategy
  • Time period until investment may be liquidated
  • Mechanism(s) for liquidating investment
  • % of investment recovered by previous investors
  • Investor options if job creation goals aren’t met
Yield on Investment
  • Historic rate of return to investors
  • Current year rate of return to investors
Operating History of Current Project
  • Funding secured to date % of total needed
  • Number of investors to date % of total needed