Does the location of EB-5 Regional Center program matter?

The location of the regional center and the center’s programs is sometimes thought to be irrelevant to EB-5 regional center investors. It’s easy to make that assumption because investing in a regional center means that you have the freedom to live anywhere in the United States. However, regardless of where you live, the location of a regional center and its projects does impact on your investment and visa success.

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. 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 (TEA) 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 the $500,000 investment criteria 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 basic reasons to consider the location of a project, but there are reasons that go deeper.

A regional center can be greatly influenced by their location and the location of their investments.  There are tangible and intangible influences of the region where your center operates that may come into play.  Factors like business climate, property markets, work force, 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 excellent 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 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.

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 preferable 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 proven, impartial advisors can prove their particular worth, because it is often unrealistic 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 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 and obtaining your Green Card is not a struggle.