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