May 29th, 2009 |
As you research regional centers, it’s not at all uncommon for you to find regional centers and projects that have a definite targeted audience—a definite culture or nationals of a specific country or countries whom are being obviously catered to as potential immigrant investors. The targeting can be so obvious that it leaves you wondering if the center is interested in investors outside that culture or country at all. It can almost leave you thinking that perhaps they do not want your money if you do not fit their targeted profile.
The question is whether or not this is an issue, and whether or not you need to be concerned with this—either as a member of that targeted population or as an outsider with an interest in such a project. The answer to the question is that yes, this is definitely something you will want to discuss with your immigration consultant.
Again, it is not that this practice is across-the-board problematic, and it is not illegal, but there are certain implications for projects that do cater to certain investors. You see, when you have a specific target audience in mind, you put a lot of work and emphasis on serving the needs and wants of the people who make up that target audience; those are people who usually, as a group, have similar goals and motivations. Those goals and motivations may or may not be in line with yours, even if you are a member of that targeted group.
The potential implications are wide-ranging, and whether or not they are a positive or a negative, or even a neutral factor for you needs to be determined. You would be surprised at the insight your immigration consultant can provide to you in this regard.
You should also know that the regional center and their representatives will not be very willing to divulge the possible implications behind their targeting practices, as they know that they do have very serious implications. Very rarely will you find a center that can take an objective look at the possible implications of such a practice and lay it out in meaningful terms for you; for that, you need a truly impartial party who has other options to present to you as well.
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Tags: eb-5, immigration consultant, regional center
Posted in Immigration | No Comments » |
May 28th, 2009 |
The varied practices and policies of different regional centers can have definite implications on your investment and your immigration status. Much like the red flags we talked about, just what those implications might be for you are highly individual; as are the ability to understand when and where a policy or practice might become an implication of more concern. Given that, we can give an overview of the practices, policies, and implications that need to be addressed, but to really understand the bearing on your own plans and goals you will need to work with your advisor so that he can show you the how and the why of these implications given your specific situation.
There are a lot of practices and policies that you may not have given much thought to, but that do carry certain implications with them in terms of investing and immigrating with the EB-5 visa. Some of the most common will be outlined in this blog:
Size implications of the regional center project.
The size of the project that you will be investing in can have a number of implications upon your ability to immigrate. By extension, these implications may come to bear on the length and timing of your immigration status. Additionally, the size of the project can be a critical factor in all aspects—in the processing and approval of the I-526, the removal of conditions on the I-829, and also on the risk and exit strategy, and your ability to get your invested funds back.
The size of the regional center project can have implications on the outlined exit strategy, too. It may seem that that exit strategy is very clearly planned and laid-out, but in actuality it may not be if it is too reliant on certain factors, such as economy and market. If that becomes the case, you need to consider how the size of the project and/or number of investors might impact upon your personal exit strategy and ability to finalize your return on investment. Be sure you talk with someone who can illustrate the possible scenarios for you, and understand that exit strategy in realistic terms.
It’s important to caution readers that there is no simple answer in regards to the appropriate size of an investment—both large and small projects can have their definite advantages, but both can also have definite downfalls, depending on the other factors and specifics of the center and the project. The possible implications of a center’s project size must be considered on an individual project per project basis (not a regional center basis—as we said before, one successful project is not always an indication of success a second or third time around).
To sum it up, size is certainly an important consideration, and it is a consideration that goes beyond the advantages that the center’s representatives will portray to you. You need to look beyond the sales gloss, and even beyond the legal considerations, and then sit down with your advisor to consider what other implications may apply to your individual goals and timeline given the overall picture.
Continued next time with: Implications of cultural focus or targeting investors from certain countries. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: eb-5, exit stratergy, I-526, I-829, immigrate, Immigration, investment, investors, red flags, regional center, visa
Posted in Immigration | No Comments » |
May 27th, 2009 |
There is no way for you to gather the information you need if you don’t know what questions to ask. Being new to the prospect of immigration and EB-5 investment, there is almost no way for you to know what those questions might be, unless you put the advantage of professional advising on your side.
Part of the job of that advisor is to spot potential problems and red flags. There is really no telling what form those red flags might take, and this is in a way the “catch all” that is left when all other issues have been attended to. That may sound as if we are being intentionally vague, but we are not; we are simply pointing out to you that there are certain things that will raise the awareness of a good advisor, and that will require further investigation. These are issues that will be unique to the regional centers and projects that you are considering. To the trained eye, these issues will be spotted quickly and will be very telling of the project and center’s operations, while to the untrained eye they would be easily glossed over by sales spiel and largely ignored until it is too late.
Realistically the potential problems and red flags that an impartial third party will find and address, and the ability to recognize those issues or lacking elements will come as a direct result of experience. Being able to spot red flags and address them in a proactive way is a skill that is developed as one works with several regional centers and their projects over time, as well as the process and regulations regarding EB-5 immigration. It’s not something that can be learned by reading and research alone—this ability comes from direct, hands-on investigations and information saturation of the sort that only time and involvement can bring.
In many ways, this ability to address the ethereal red flags and potential problems is the most valuable service that an experienced impartial advisor can deliver to you. Throughout the entire process of regional center evaluation and investment it is not the known and obvious that will cause you problems—it is the unknown, the unquestioned, and undisclosed; but as we’ve said many times, given the complexity of investing and immigrating through the EB-5 visa, there is hardly a way for a single investor, or even small group of potential immigrants, to know exactly what to look for, or what information to trust.
If an impartial advisor, Immigration Advisor, or Immigration Consultant does not have these concerns, you should think twice about why that is. Is it possible the advisor is not as impartial as you originally were led to believe? Is there a conflict of interest? Or is the advisor simply not that good at his or her job?
These are things you want to consider to ensure you are getting value from the partnership, and also to ensure that the advisor has first and foremost your concerns at heart. To be even more clear, and hopefully preempt these troubles entirely, we’ll look at how to find a good Immigration Consultant or third party advisor after we address a couple more issues wherein your impartial third-party advisor will certainly prove his or her worth.
Next, POTENTIAL IMPLICATIONS OF SOME REGIONAL CENTER PRACTICES AND POLICIES. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: andrew bartlett, eb-5, Immigration, immigration consultant, investment, partnership, stephen parnell, visa, Which EB-5
Posted in Immigration | No Comments » |
May 26th, 2009 |
Most discussion around the EB-5 focuses on the amount of money you need to invest in order to qualify for the visa; what a lot of people do not realize, and what a lot of regional centers aren’t as quick to share, is that the total cost of your visa is not just a flat $500,000 or $1 million. The total cost will be higher when all is said and done.
In addition to the requisite amount of your investment as determined by the USCIS and the project you are investing in, there will be an additional set of fees charged by the regional center. This varies between each center, and is set by the administrators; these fees are in no way regulated by the U.S. government, and are entirely separate from your investment. As a bare minimum, you are probably looking at something more in line with $540,000 just to get started on the process and investing. This figure is arrived at by taking the minimum amount of $500,000 required by USCIS, and adding in the average basic fee of $40,000 that the regional center will charge in administrative and other fees.
Many of these fees are real reflections of costs of business and investment, and are justifiable. They may be used for a variety of applications, including administrative fees and legal fees accumulated by the regional center in the course of processing and overseeing the project. It is not that it is shady business for a regional center to charge a set of additional fees, and in fact this is the norm; the trouble comes when investors are not prepared for them, because they have only been given the bare basics of investment requirements.
The other problem that often arises is that investors are not told specifically what is and is not covered by the fees that are disclosed to them. For instance, the legal fees charged are the fees incurred by the regional center for legal services—they are completely separate from the legal fees that you will incur for your own representation. It is also not uncommon for an investor to be lead to believe or assume that the fees they are charged will cover all of their expenses with USCIS for application and petition fees, but this also is something separate that you need to be prepared for.
A true determination of the potential cost of doing business with a given regional center really only comes through a thorough analysis of the center’s costs and charges. You need to know exactly what is and is not included in any fee structures, but then you also need to go beyond that published list and ask the questions the centers are hoping you would not think about (at least not until it is too late and they’ve already got you on the hook for $500,000 to$1 million!). Most of these, like project evaluation itself, are not questions that you would know to ask unless you have had extensive dealings with a number of regional centers, policies, and projects. Potentially, any small variation from the “normal” application (which is usually to say, very basic and “by-the-book”, if such a thing exists) is grounds for additional charges and processing fees from the center. There are myriad potential charges that should be discussed well ahead of any commitments or payments.
Both the published and the hidden costs and fees of a regional center need to be determined before you can make a real, informed choice of a regional center investment project. Only when you know the real cost potentials will you know the real cost of doing business with the centers you are considering. And only when you know all the costs of all the centers on your list do you have a real basis for comparison between centers and projects. This is an overwhelming amount of information for one person to pursue and flesh out, but with the help of an experienced immigration consultant the information will be much more quickly forthcoming and provided in a way that makes comparisons easier, giving you the confidence to make a good decision.
Next we’ll look at potential problems and red flags associated with an EB-5 investment visa. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: andrew bartlett, costs and fees, eb-5, regional center, stephen parnell, US Government, uscis, visa, Which EB-5
Posted in Immigration | No Comments » |
May 25th, 2009 |
Safety is an important consideration, as is investment risk. Your impartial third-party advisor will also want to be sure all of your potential EB-5 decisions have been thoroughly evaluated from an investment perspective too. You need to know that there is a reasonable potential for a return of your investment and on your investment. Keep in mind that this is always necessary, even if your only true concern is getting a U.S. green card and gaining lawful permanent U.S. residence.
A bleak outlook for return on investment has implications that extend beyond your personal financial circumstances. If you think return on investment is of little or no concern to you because you are only interested in your ability to emigrate, consider this—how likely is an investment project to meet investment and job-creation criteria if it does not stand the tests of viability and produce a return on your investment? Is that investment even capable of achieving the bare-minimum of immigration petition approval and removal of conditions?
The potential for return on your investment needs to be evaluated from several points of consideration. It is always strongly recommended that you seek appropriate professional advice in evaluating all investments; this is not a personal recommendation, it is the advice of any reputable professional or resource in the field. Some of the points of consideration that your third-party advisor will be concerned with are:
• The implications of the viability of the project and return on investment from an immigration perspective.
• Return on investment from a financial investment perspective.
• The published/projected rate of return on investment.
• The variability of the rate of return—is it fixed (such as for loan interest returns) or dependent on market or other factors?
• How well suited the projected return is to your lifestyle and financial plans.
• Projected rates of return in comparison to actual returns on this or other past projects (in other words, historically speaking, has the regional center achieved the rates of return for its investors that it has said it would?).
Your best interests are served when you and your advisor are able to work together to match you to the regional centers, and eventually center, that is/are best suited to you all-around. That means that not only should your immigration goals be prioritized, but also your goals for investment and return. As any investor knows, each individual has his or her own investment style. What you consider to be a good rate of return is very much related to your style, as is what you consider to be a reasonable amount of risk. It takes a lot of work and evaluation to match you to the regional center that is really suited to your needs.
Next we’ll look at hidden costs and fees associated with your EB-5 investment. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: eb-5, green card, Immigration, investment, regional center, removal of conditions, safety
Posted in Immigration | No Comments » |
May 22nd, 2009 |
Along with having a good fall-back plan, your regional center should also be able to tell you what will happen to your investment if problems do arise (not only with the project, but also, more so, if problems arise with your immigration application). This is critical information for you to know. Too many investors have failed to ask this question.
Primarily what you want to know is whether or not your funds will be escrowed. The next question that needs answering is what happens to those funds if your (I-526) petition for a green card is denied. If USCIS (United States Citizenship & Immigration Service) does not approve your application and grant you a green card, will your funds be refunded to you?
This again may seem another question that should be simple enough to answer. Most regional centers do engage in some process of escrowing funds and maintain a policy of refunding money for failed applications. However, do not discount the value of your advisor in these matters. Whether or not your money will be refunded is not a simple yes or no question.
Although most centers have a refund policy, it needs to be determined what the conditions are in regards to that—what are the terms under which you will qualify for a refund of your investment money (do not expect a regional center to want to part so easily with an investment of $500,000 to $1 million!—don’t take assurances at face value!). You need to know the specific circumstances under which the center is willing to refund your investment in the case of visa denial; the typical regional center refund policy applies only if the visa petition is denied because of some problem with the center’s project. It may not necessarily apply if the visa is denied due to an issue that the center considers to be the immigrant’s responsibility.
For example, if USCIS determines that the evidence supporting the legal source of obtaining your invested funds is insufficient, or if there are criminal convictions or other disqualifiers present, the center may deny the refund. Every regional center has its own policy regarding the refunding of invested capital, and these policies can vary widely. It is important to research the policies ahead of time and to compare and contrast between them. An experienced advisor will be familiar with the various policies and be able to point out to you which areas and disqualifiers could be potential cause for concern.
Even assuming good due diligence in this respect, there are even more considerations, and more depths that your advisor will go to in order to help you understand exactly how safe your investment is in relation to visa approval, and what the real likelihood of a refund is. There are two more major considerations, and more that your advisor will discuss with you.
The first of those two is the attitude of USCIS toward your refund agreement. If your funds are guaranteed, will USCIS consider them to be at risk? Will they qualify as an at-risk investment capable of qualifying for visa application and later approval? Will those funds need to be released and so not be able to be subject to escrowing or refunding? These are questions and answers that a third-party advisor will evaluate and help to answer for you.
USCIS aside, you also need to consider the safety and legality of the escrow fund that your money is being kept in. If you do not use extreme caution at this point, you stand to lose all of your invested money. Let your advisor do his or her job here, and make sure that this is a real escrow fund and that your rights and ownership are being protected. Let them look further into the matter, and find out what the disposition of other funds has been—were the monies invested? Were funds returned to investors? Why? How difficult was it for failed applicants to recoup their funds?
Clearly, the matter of safety of your investment is one that requires much care and research. This is not just about good business planning; the safety of your investment is also about the center’s track record and good business practice. It’s a level of evaluation that goes layers deep beyond the transparent, and one that you will surely want to know has been explored to all the possible depths of due diligence.
Next we’ll look at the potential return of your EB-5 investment. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: eb-5, escrow, I-526, Immigration, investment, investors, regional center, uscis, visa
Posted in Immigration | No Comments » |
May 21st, 2009 |
This is one of the primary questions to be explored as you and your advisor undertake your due diligence in evaluating the safety of your investment and the potential of a regional center. If the original project hits one or more roadblocks, does the center have a plan to maintain the program? Can it still produce that all-important job creation element?
There are many reasons why a project may not proceed according to the original plan. It is very difficult to presume all the potentials that can happen, but a good third-party advisor will know what to look for, and what to look for in a fall-back plan. To give you an idea, suppose that the project that you have chosen is underfunded—that it fails to recruit the number of investors that were originally planned for, and so the whole project cannot proceed. What happens then?
In this instance, your advisor will be looking to see if the regional center has a plan to pursue other funding sources, such as commercial lending. This would enable the center to utilize your investment capital and also to secure the necessary additional funding to complete the project so that its qualification status can be maintained. These kinds of safety-nets are even more reasons to thoroughly evaluate the center and its project. You need assurances that the center/project has the means to secure outside funding in the event that it is needed—that a commercial lender or other investment mechanism would find the center to be a good investment risk. This is also an example of why you need someone to dig really deep and find out who potential fund recipients will be, so that it can be determined how likely your investment is to be repaid, and to determine how fit those entities are as “collateral” for the project.
Additionally, if other sources of funding are to be secured, you need to know that your project will still continue to qualify as a basis for EB-5 immigration. This is where things really start to get complex again, and where a solid team of professionals and consultants to back you and guide you prove invaluable. At this point, not only are you talking about the numbers of the investment, but the legalities of investment law and visa approval; it takes a great deal of experience and knowledge in all the applicable arenas to lend the amount of confidence you need to such an undertaking.
As we said, this is only one example of the variables affecting the security of your EB-5 investment. There are many others that a third-party consultant can help you deal with. Expect your advisor to speak frankly with you and perform this deep level of due diligence so that you can determine the safety of your investment in all respects to the extent that is prudent and reasonable.
Next we will look at: What happens to your money once invested in an EB-5 Regional Center? In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: andrew bartlett, commercial lending, eb-5, Immigration, job creation, regional center, stephen parnell, visa, Which EB-5
Posted in Immigration | No Comments » |
May 20th, 2009 |
Any investor will always have concerns over the safety of their investment. When that investment is the key to your chosen future, however, safety becomes a very subjective term. In the case of EB-5 investment, safety takes on a very unique life of its own, and often leads to investors going to extremes rather than considering the best balance between investment safety and immigration qualification.
Not uncommonly, and really not surprisingly, people who are looking to immigrate through the EB-5 will do one of two things; they either
• Focus intently on the investment potential at the expense of attending to the visa implications of the project, often assuming that the one will take care of the other, or they
• Focus intently on the visa implications without attending to the business end of their investment.
At least on the surface there are fairly obvious repercussions of either practice. Potentially, you could end up with a great return on investment and never gain visa approval, collecting on your investment while still living in your home country, or you could gain that visa approval and be here in the States and see almost no return on your investment. Even these are not the worst things that could happen, though. It is just as possible that, without the right level of thorough due diligence, you could lose all your invested monies and not qualify for a visa because the project failed when there were no jobs created. We’ve already discussed the possibility that a poorly planned and executed investment could gain you conditional status, but not full green card status. Having your green card revoked at the two-year mark is a very real possibility, too, if that job creation component cannot be solidified.
When you are talking in terms of investment safety with the EB-5 program, you have to consider it from different angles. One angle is the amount of risk that the investment itself carries—that is why your advisor will go through the proposed business plan thoroughly, as well as all claims and documentation to make sure everything makes good business sense. The safety of your EB-5 investment is something that needs to be handled carefully, and with a perspective of balance. On the one hand, there is no 100% safe investment, because all investments must carry some risk in order to qualify for visa approval. On the other hand, that is not a reason to choose a risky investment project—the CIS expects a reasonable amount of risk, and a reasonable amount of safety as well.
Determining investment safety and risk goes beyond the business or investment plan, though. It also requires due diligence in terms of how prospective fund recipients will be chosen, and/or who those fund recipients are (if already known). This will give an indication as to the likelihood of loans and investments being paid back or their seeing a return.
The other angle that needs addressing when considering safety and choosing an EB-5 regional center investment is the safety of your money as an immigration vehicle. You need to know that a successful project will be a qualifying EB-5 project—one that has what it takes to be approved by CIS as a green card condition. It’s not enough for an investment to produce a return on your money, it must also meet the stringent requirements laid out by CIS.
Part and parcel to determining how safe your investment is, and how likely it is to gain you approval at both the I-526 petitioning stage and the I-829 stage, is knowing not only what happens according to plan, but also knowing what happens if things do not go accordingly. When the unexpected happens, does the center have a plan for dealing with it? Is there a solution that will preserve your immigration or petition status? You need a way of determining whether or not such a plan is in place, and whether that plan is reasonably viable as well. Again, that means more due diligence, and a lot of in-depth research.
Next we will look at: Should a regional center have a fallback plan? In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: andrew bartlett, eb-5, green card, I-526, I-829, investment, job creation, regional center, safety, stephen parnell, visa approval, Which EB-5
Posted in Immigration | No Comments » |
May 19th, 2009 |
The location of the regional center and the center’s proposed projects is often (mistakenly) thought to be irrelevant to EB-5 regional center investors. It’s easy to make that assumption, because unlike the standalone investment investing in a regional center means that you have the freedom to live anywhere in the United States, as far away or as close to your investment project as you like. Regardless of where you have your heart set on living, the location of a regional center and its projects does still have a definite impact potential on your investment and visa success. There are a couple of reasons why this is true.
First of all, the location of the center, and more specifically the particular project that you are investing in, matters because the amount of your required qualifying investment depends on that location. We’ve discussed this before as you’ll recall, your minimum investment will be either $500,000 or $1 million depending on the location of the project. The lower figure applies only to Targeted Employment Areas and designated rural geographic regions.
It is imperative to make a distinction between the location of the regional center and the location of the project itself. It is entirely possible that projects within a given regional center will have different investment minimums depending on where the money is actually invested. You cannot assume that just because a center’s offices are located in an area that meets lower-level investment minimums that the project funds will be invested there. You can also not assume that just because the last project was invested in a TEA or rural area that the next project will take place in a similarly qualifying area. The investment minimum for visa approval could vary quite easily from one project to the next.
These are the most basic reasons to consider the location of a project, but there are reasons that go deeper. These are the more in-depth considerations that an impartial advisor will research to determine how they apply to your situation. Let’s expand on that.
A regional center can be greatly influenced by their location and the location of their investments. There are many tangible and intangible influences of the region where your center operates that may come into play. Factors like business climate, property markets, workforce, local and state support of the project, and the presence or absence of worthwhile investment recipients can all make or break a project that sounds very good on paper. Add to this the more fluid factors like public perception of the center, its projects, and even immigration and the EB-5 program itself, and suddenly something that looks very good as a business plan can be much more tenuous as a dual-purpose investment and immigration vehicle.
Another very important consideration is the proposed exit strategy for the project. The location of a center can have a tremendous impact when it comes time to try to exit your investment at a profit. This is one of the areas that centers often gloss over. Your impartial advisor, however, will not take them at their words, and will explore and discuss with you all the potential impacts of location for both now and the future.
Often the only way to know how a regional center’s location may impact upon its investments and investors is to take a lot of time getting to know the region, its potential, and its personality “quirks”. Actually physically visiting these regions is the only way to get to know the pros and cons of the particular area, and to know what other factors need to be looked into further. Taking that time can bring critical issues to light that would not come up through paper research. This is one area where impartial advisors can prove their particular worth, because as we’ve already established there is no possible way for a single investor to undertake this kind of travel and physically present due diligence on his or her own.
On the other hand, it is the job of the advisor to amass this kind of knowledge, and to know the centers, their regions, and the potential impact of that location on all of that center’s projects. So, while it may seem like a regional center’s location shouldn’t need to matter to you because you can live anywhere you choose, you can see that in fact that location is still a big consideration. It may not come into play as you choose where to live, but it will certainly come into play as you decide the best, safest, most appropriate place to invest your money so that obtaining your visa and being cleared of conditional status is not a struggle.
Next we will take a look at the safety of your EB5 investment. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: andrew bartlett, eb-5, regional center, stephen parnell, TEA, Which EB-5
Posted in Immigration | No Comments » |
May 18th, 2009 |
Immigrating through an EB-5 investment hinges heavily on the job creation of the regional center. Without creating jobs, there is no way a project will result in an approved green card application. Economic stimulation through job creation is the express mission of the EB-5 and the regional center pilot program. What’s more, the approval of your green card application is not all that is riding on the center’s job creation methodology—the removal of conditions on the green card (which happens after two years) and your full permanent immigration status also relies on it.
The ability of the center to actually come through on their job creation forecasts is integral to achieving full permanent residence in the U.S. At the completion of the two-year conditional visa period, the number one factor that the USCIS will be looking to see proven is the implementation of the center’s business plan and the actual—not proposed or forecasted—creation of at least ten jobs which can be directly attributed to your $500,000 (or 1 million if that is the case) investment.
To say the very least, the job creation methodology of the regional centers you are considering is crucial; therefore, your advisor will be focusing in heavily on evaluating their methodology, specifically looking to see that the jobs created, either indirectly or directly, can be solidly accounted and their projections reproduced. In addition, your advisor will dig deeper to try to determine what else backs up the center’s original plan. As he or she does this, he will put the center’s plan to the test, asking questions such as:
• How did the center arrive at its calculations for job creation?
• What documentation and analysis supports the number put forth by the regional center?
• Do these numbers make sense?
• How will job creation be monitored as the project progresses?
• Is there a plan to remedy the situation if job creation is not proceeding as planned?—In other words, a plan to make up for your lost, but still required, ten jobs?
Along with determining the number of jobs created, you need to know just what that job creation looks like. You need to know what types of jobs are being counted toward the requisite number. You need to know if those jobs are positions that are directly created and attributable to your investment money, or if they are projected jobs that will be induced or indirectly created by extension of the business plan and project funds.
Certainly the great advantage of the EB-5 regional center program is that indirect job creation is accepted by the USCIS. This means that you need to be sure of the center’s job creation methodology, and to do that you will most certainly want the added security of having a professional researching that and double-checking the information that is used to produce the number and the conclusion that has been arrived at. He or she will look to see that not only does the center have a plan for creating jobs, but that at minimum ten of those positions will fulfill the requirements of being full-time positions (remembering that part-time positions do not qualify), and that those positions are solely attributable to your investment money, as there is no overlap or “sharing” of job creation allowed between investors.
To give you some idea of how complex an undertaking proving job creation is, here are some of the different ways that regional centers and the USCIS go about proving that your investment will result in jobs being created.
As we know, the limited liability company or limited partnership (the regional center project) that you invest in does not have to directly hire anyone. Instead, the center’s plan may be to arrange for the businesses and loan recipients who borrow or obtain the funds to produce the jobs by directly creating positions and filing them through direct hires (in other words, the person or entity who receives the money hires, ten workers).
Another common scenario in the case of real estate-based projects is that the businesses who rent the developed space will directly hire a set amount of people into full-time positions they have created. To determine qualification of the jobs created, the CIS will “plug” these numbers into an econometric model. That model will have certain multipliers based on each specific industry. To be successful, the model should return at least ten new jobs created based on that model per each investor. These must be new jobs, and cannot be comprised of transferred positions that are simply relocated into the regional center’s geographical area.
Another possibility is that the regional center project had its job-creation model approved based on a specific number of jobs being created for a certain amount of investment money. For example, the partnership (regional center) may lend money to a private company or a government agency who in turn agrees to invest a specified amount of money. These figures are again “plugged into” an econometric model that projects the numbers of jobs created for certain levels of investment, and for certain amounts of money spent by the borrower. When this is the case, the project must be able to illustrate the model, and also prove that the borrower has spent that requisite amount of money to have resulted in the creation of at least ten new jobs.
Job creation analysis is a highly complex undertaking. Some centers are partnered with Universities and leading economists for the projection and calculation of job creation. That is not to say that you can trust in a job creation claim from a regional center just because they have a big name University or professional on their list, but just to show that this is no simple matter, and that it is one that requires thorough analysis by an experienced professional. A good advisor will have the experience working with centers, their plans and projects, and the economic tools that indicate the reliability of a regional center’s job creation projections.
Too often the viability of a project’s job creation methodology is taken for granted by investors who are given only the rosiest of projections by EB-5 centers. But with everything riding on this one factor, there is no room for that kind of error. You must be as sure as you can be that the jobs created in your name will be there when the time comes to prove them.
Next we will look at Location considerations of regional centers. In the meantime, if we can answer any of your questions please contact Stephen Parnell or Andrew Bartlett at Which EB5
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Tags: eb-5, econometric model, green card, Immigration, investment, investors, job creation, permanent residence, regional center, regional center pilot program, removal of conditions, uscis, visa, Which EB-5
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