EB-5 DIRECT INVESTMENT VERSUS EB-5 REGIONAL CENTER INVESTMENT

The U.S. EB-5 Immigrant Investor Program (“EB-5 Program”) is the most flexible immigration program in the world. The U.S. has no requirements with respect to age, business training and experience or language skills. Permanent residents need not be continuously and physically present in the United States, and they can maintain business and professional relations in their country of origin.

There are two different options for investment: either investing directly in an established or newly created business or investing in what is called an “EB-5 regional center,” which will combine capital from several different investors and use it as collaboration for a single project.

While both provide access to a green card and then residency in the United States, direct investment may be a better option for a number of reasons. With direct investments, people applying to the visa program are able to do the following and more:

FREEDOM OF CHOICE

Most regional centers are only in specific industries and tend not to branch out from them, which sometimes may not interest a potential investor. Why invest in an industry that’s not quite familiar or interesting? With direct investment, any sort of industry – so long as it is a legal business and meets the requirements–can be invested in.

BETTER CONTROL OVER THE BUSINESS

When an EB-5 Visa applicant invests directly, that also means a greater control of the business being invested into. Rather than have a regional center making all of the executive decisions.

BETTER CONTROL AND MORE INVOLVEMENT

On top of having greater control of bigger decisions in the business, direct investors can also have greater control in the daily operations of that business. Instead of only guessing how the business might be doing, direct involvement means seeing growth and daily duties. However, if these duties become too much to handle, then the duties can be relinquished and passed on to a US based managing company.

HIGHER SHORT TERM AND LONG TERM RETURNS

When investing into a regional center, only about 3{d3e4c3007f92404e9ca9c26a6bf48477888b9226cd35406b8d671b952349c559} of the returns will be seen by the investor, whereas a direct investment will yield much higher returns both in the short and long term. Also, there is no limit to the returns when directly investing.

DIRECT INVESTMENT LOWER COST

In order to cover other costs like marketing expenses, regional centers will ask investors to pay much higher administration fees than the original investment, which can result in tens of thousands dollars sometimes. Direct investments mean paying the lowest possible as set by the USCIS.

REAL, TANGIBLE ASSETS

EB-5 Visa applicants will see actual assets when direct investing, whereas if they invest through a regional center, they will more than likely be given a shareholder position which might not mean actual ownership over the assets.

LESS RISK

If a regional center, for example, does not create enough jobs, the investors will not get the green card. If the regional center does not raise enough capital, the project may not even get off the ground at all, while still cumulating costs for the initial investors. While an existing business with an established track record and current employees provide a much safer path to EB-5 immigrant status than a large regional center.

Direct investments means less risk of a business failing or other complications that may arise, simply because there is more control.

GLOBALIZATION AND DIVERSIFICATION

A business can be diversified easier when directly invested, especially with investors who might already have a business in their home country. With a direct investment, the new business can potentially become a subsidiary or vice versa. This means even more return in investment, better networks to cheaper investment with a global company, and partnership opportunities that can’t be seen with regional center investing.