EB5 Visa Attorney - Everything You Always Wanted to Know about Regional Centers
his great summary is provided by AILA with the guidance of Tammy Fox-Isicoff. The EB5 program is of great interest to many applicants, especially those with the means to participate. he EB-5, Green Card through investment, was created to promote investments in businesses and to create and preserve jobs in the U.S. You can become a lawful permanent resident by establishing a new commercial enterprise and provide full-time employment to at least ten U.S. citizens, legal permanent residents, or other immigrants with employment authorization.
Under section 203(b)(5) of the Immigration and Nationality Act (INA), 8 U.S.C. § 1153(b)(5), 10,000 immigrant visas per year are available to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise.
Of these 10,000 visas, 5,000 are set aside for those who apply under a pilot program involving a CIS-designated "Regional Center."
What is a Regional Center (RC)?
A RC is a proposed business venture often located in a targeted unemployment area supported by an econometric model based on a business plan forecasting indirect and/or direct job creation. Normally, RCs are located in areas of high unemployment or rural areas and require a $500,000 investment. However, some RCs are not located in targeted employment areas and therefore require investments of $1,000,000. An investor in an RC is not required to be actively involved in the management of the investment as long as the investor is a limited partner under the Uniform Limited Partnership Act. An RC normally structures one or more new commercial enterprises (NCE) that receive capital from investors to engage in direct or indirect job creation project or projects.
What does RC designation by USCIS mean?
It means that USCIS has reviewed the proposed business plan, any accompanying econometric model, location, and proposed job creation and has determined that the proposed business plan meets the requirements of The Immigrant Investor Pilot Program, created by Section 610 of Public Law 102-395 on October 6, 1992. Are all RCs that have received designation from USCIS operational?
No, actually only a small percent of designated RCs are operational and have been the basis for approved I-526 Immigrant Petitions by Alien Entrepreneur. Even a smaller percentage have approved I-829 Petitions to Remove Conditions on Residence.
Is USCIS required to conduct background checks on RC managers or directors?
No. Does USCIS monitor the performance of RCs?
No. USCIS has sent out questionnaires to RCs, but it is not clear at this time what USCIS is doing with the information obtained from the questionnaires.
Does USCIS publish a list of operational RCs and those with approved I-526 and I- 829 petitions?
While USCIS does publish a list of designated RCs, it does not publish which RCs are operational or which RCs have approved or denied I-526 and/or I-829 petitions.
If an RC is designated by USCIS, are all NCEs formed in the RC automatically approved?
No, each NCE within the RC must meet the requirements of the requisite investment amount and job creation. If the NCE will be investing in another business, that business must meet the requisite employment creation. Is there a process whereby USCIS provides pre-approval of an NCE within an RC?
Yes. USCIS has recently created a pre-approval process. However, this process is not taken advantage of by many RCs as the time to obtain pre-approval of an NCE can be extensive, inordinately delaying the NCE from receiving funds from investors. The preapproval process is so new that it has not been adequately time tested.
If USCIS has approved a number of I-526 petitions for an NCE or pre-approved an NCE is it a guarantee that future petitions for the same NCE will also be approved?
No. USCIS will always examine the source and path of funds of the individual investor and failure to carefully document this can result in the denial of the I-526 petition. More baffling is that on frequent occasions, USCIS has raised questions pertaining to NCEs that have a long track record of approvals, and USCIS can also raise questions pertaining to NCEs that have been pre-approved. USCIS has also raised questions concerning an NCE’s qualifications after approving an I-526, at the I-829 stage. Thus, prior approvals for the same NCE, pre-approval of an exemplar petition for an NCE and even the approval of an investor’s I-526 for a particular NCE, does not mean that the NCE will not be further scrutinized by USCIS.
What happens to an investor who invests in an NCE that never gets off the ground?
The initial I-526 petition may be approved based on the business plan and supporting documents, but the I-829 petition to remove conditions on residence will be denied.
If either the I- 526 or I- 829 is denied, will the invested funds be returned to the investor?
This depends to some extent on the agreement between the investor and the RC. Some RCs hold funds in escrow pending approval of the I-526. Others do not. At the I-829 stage, it is doubtful that funds will be returned if the I-829 is denied as the funds must have been placed at risk in order for the I-526 to be approved in the first place. See Matter of Izumii, 22 I&N Dec. 169 (Assoc. Comm. 1998). The RC cannot provide any guarantee of the return of the invested funds if the I-829 is denied.