Question: What is the difference between Regional Center and a direct investment? What are the pros and cons of each? Can the EB-5 investor be limited in the legal exposure/management of the project, such as is often the case defined by being a limited partner in an indirect EB-5 investment through a Regional Center?
Attorney Lei Jiang: The main difference is that a regional center can utilize indirect job creation while a direct investment cannot. Moreover, direct investment normally requires more involvement from investors. Regional center projects, on the other hand, have a team of professionals. So investors are all passive investors.
Question: Why does I-924 takes from targeted 4 month to 9 month? What are the reasons for this delay?
Attorney Lei Jiang: I-924 normally takes 9 month or longer. USCIS wants to be careful but lack of officers. So it is backlogged.
Question: Do I submit my project directly to a Regional Center? I am a real estate developer in Indianapolis. I have a project in Chicago which will generate 50 new jobs and the project total cost is $10 million.
Attorney Lei Jiang: You should contact Chicago regional centers to see if they are interested in your project.
Question: Do you need to have an EB-5 Project in order to start your own Regional Center? I want to know the requirements to start a regional center myself, and if I need to have a project ready before applying to become a Regional Center?
Attorney Lei Jiang: No. You do not need an actual project for regional center application, but as part of the application, you need to submit a hypothetical/exemplar project plan.
Question: I have a project but I don’t want to wait a year or so to get a regional center designation. Can I purchase an existing one? Would I need an immigration lawyer to help me in the transaction if it is possible?
Attorney Lei Jiang: Yes, you can if a regional center agrees to sell. Alternatively you can “rent” one. You do not need immigration attorney for this transaction but it is good to have one. You need to understand immigration issues.
Question: Does your law firm offer the service of establishing a regional center? And approximately how much would it cost for this service? Thanks.
Attorney Lei Jiang: Yes we do. It normally runs around $80,000 to 120,000. There are many other law firms offering such service.
Question: What is the benefit of investing in an EB-5 Regional Center as opposed to going with a direct investment in an EB-5 project?
Attorney Lei Jiang: You can utilize an economic model for job calculation. 10 required jobs for every investor (normally with $500,000 investment) is difficult to achieve for many business ventures.
©Lei Jiang Law Firm 2014.
Question: I am planning to invest in my own project but it might not create 10 direct jobs in 2 years. There is a Regional center in the same area with a similar project. How could I work with the regional center and create a structure to leverage their ability to include indirect jobs?
Attorney Lei Jiang: You need to talk to them. One benefit of using regional center is that you can count indirect jobs.
Question: Why do Regional Centers use mezzanine financing? Isn’t mezzanine financing risky?
Attorney Lei Jiang: This kind financing is commonly used in real estate. Since most regional centers have real estate projects. You should not be surprised by this type of financing.
Question: What would be an applicant’s position if EB5 pilot program is not renewed (Sept 2015) after approval of his I-526? Would all rights to obtain residence be lost? Could an investor sell his investment immediately to reclaim funds?
Attorney Lei Jiang: It’s unlike that the program will not be renewed. Whether the investor can sell his investment or not depends on the subscription agreement and other legal documents that he has signed. Investors should always read these legal documents very carefully and/or seek professional help.
Question: What is the process for filing a complaint against a Regional Center for fraud? I am a project sponsor who paid a non-refundable deposit to a firm representing itself as an established Regional Center. The Regional Center I wish to file a complaint against is the parent of the firm we paid, but wasn’t an approved center at the time of payment. Also, how do I access the date on which a Center was approved? The USCIS website does not list that information, and my email inquiries to them have been rejected.
Attorney Lei Jiang: All approved centers are listed on USCIS website. So if a regional center has not been approved, it will not be on the USCIS list. Normally you can file a lawsuit (complaint) in a common pleas court or a federal district court which has the jurisdiction of this company. You need a lawyer for that.
Question: My main goal is the preservation of my capital. What are the chances that the regional center does not return the principal? Do regional centers return the full principal I’ve invested with them at the end of the 5 or 6 year period? How often do they fail and how can I find the regional center which has no failure record.
Attorney Lei Jiang: Do your research and talk to EB5 attorneys (they know the regional centers)! It’s just like other investments (stocks, bonds, etc.).
Question: How do you go about using an EB5 Regional Center to fund a project, without becoming designated as a regional center yourself? I have a business in Colorado and have researched the EB5 program. Once I find a regional center whose designation I may use, who does the reporting to USCIS and do I have to do a business plan and economic impact study to work through the regional center. What does the Regional Center have to provide the USCIS with if a third part project is using its designation?
Attorney Lei Jiang: You need to talk to the regional center to see whether you can utilize it and how to do it. Business plan and economic report are needed for immigration petitions.
©Lei Jiang Law Firm 2014.