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Advantages & disadvantages of doing direct, individual EB-5 case vs. Regional Center EB-5

The limited advantages of direct, individual EB-5 case over Regional Center EB-5 case are as follows:

  • You, investor, can exercise the primary day-to-day control over the new commercial enterprise business, rather than the limited role of limited partner in a uniform limited partnership entity which is the preferred choice of Regional Center EB-5 Program. This can be good or bad.
  • You, investor, will receive 100% profits and be 100% responsible for the profit and loss of the new commercial enterprise business in which you own 100% interest. We have seen many direct, individual business fail and lose a lot of money.
  • The job-creation is within your control, if the economy cooperates.

The very disadvantages arise from the same advantages, similar to owning and operating a business with your spouse. You have to do a lot of work to meet all the requirements, and often, trying to meet the business demands may not jive wit the goal of obtaining CPR and LPR status. The disadvantages of direct, individual EB-5 case are:

  • In all likelihood, you cannot work at another profession. When you are in full charge of your business, it's hard to study at school or work at another job.
  • You have to hire 10 full-time employees even when the real-world economy does not demand it. For example, let's say you found a way to operate your business with just 7 full-time employees, but just to get a green card (which after all is probably the more important goal), you have to become inefficient and hire more employees than your business dictates. This is the core problem of direct, individual EB-5 case. It's like having to wear two masks and playing two roles.

We would advise people from pursuing direct, individual EB-5 case only when they really want to pursue their vision of a successful business and they have enough money to let any potential loss from that business not to affect their economic situation too much, and you are very sure that your business requires more than 10 new full-time positions. Also, you should make sure that any satisfaction of starting a new business you can control is more important than the risk of the new business make you bleed money.