Regional Center EB-5 v. Direct EB-5 Investment
Time and again I get questions from prospective EB-5 U.S. investor visa applicants from India and other countries such as Brazil and Mexico about whether they should make an EB-5 Regional Center Investment or a Direct Investment. Generally speaking, a Regional Center investment will almost always be a somewhat large scale infrastructure project related to hospitality, health-care, residential and/or commercial development or re-development whereas a Direct EB-5 will likely be an investment in an actual new business that could be a restaurant, technology company or a franchised business. I always say certainly look at both options but pay specific attention to the following basic considerations both positive and negative:
Regional Center EB-5 Investment:
- Generally a loan-based model with no ownership of the project or everyday control and management (unless a direct equity investment wherein an investor applicant ‘buys’ a share in the project)
- Low-risk project = Low or no return on investment
- Investment capital at-risk and blocked for 5-6 years or more
- Burden to create 10 full-time US jobs is on developer/borrower
Direct EB-5 Investment:
- Identification of a good business opportunity that has the potential to sustain itself and create and maintain 10 full-time jobs over 2-3 years
- Direct investment into the business with possible ownership, management and control
- Running a business in the US while on a B1/B2 visitors/business visa
- Getting approval for the I-526, Immigrant Petition by Alien Entrepreneur if only an EB-5 application is filed along with an EB-5 compliant business plan but no real operations in place
- If business is started prior to filing I-526 then finding a competent and trustworthy manager or CEO while investor is waiting for approval of I-526
This post originally appeared on EB5 BRICS. Copyright © 2015 EB5 BRICS. All Rights Reserved. Reprinted with permission.
Vivek Tandon is the Founder and CEO of EB5 BRICS – the go to source for everything related to EB-5 U.S. Immigrant Investor Visa (Green Card) Program. A lawyer and an investment banker, Vivek’s primary focus is on educating investors in India, Mexico and Brazil about EB-5 Visa Program and EB-5 regional center projects and EB-5 direct investments. Vivek holds Financial Industry Regulatory Authority (FINRA) and U.S. Securities and Exchange Commission (SEC) securities licenses and is associated with a registered broker-dealer NMS Capital Advisors, LLC – a Beverly Hills, California based global, privately held, independent, diversified financial services firm providing investment banking, asset and wealth management and EB-5 consulting services.