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[Q] Why has regional center program meandered for many years and then made a sudden come-back after 2002?
[Q] It is my understanding that Regional Center Program meandered for many years from 1995 to 2002 and then starting around 2003, made a resurgence of sort. Is there specific reasons for this?
Yes, without the changes in the EB-5 law, we believe the Regional Centers would have continued to meander and never have taken off. What were the important statutory amendments? They were:
- Doing away with the job-creation requirement that were related to export activities of the region, and allowing the job-creation from any investment activities in the region;
- Doing away with the establishment of new commercial enterprise requirement by the investor, and allowing third-parties rather than investors to first create a new commercial enterprise, i.e., limited partnerships first and then attract investors -- per real-world commercial demands;
- Reaffirming that a limited partnership is included in the definition of "new commercial enterprise";
- Defining full-time positions as the positions that require 35 hours per week any time (rather than all the time) regardless of who fills the positions.
The above amendments in one swoop made the Regional Center Program comport with the real-world commercial requirements. Without these amendments (and subsequently by various policy changes), there is no way Regional Center Program would have taken off. Therefore, people who refer to "regional centers" as some sort of "shady schemes" are not aware of the very problems that initially caused the regional centers to become "schemes" and then subsequent amendments that allowed Regional Centers to carry on as bona-fide businesses to attract foreign investors' funds.
Said author often tells potential clients that they really have to understand the checkered history of the Regional Center Program and the reasons for the problems, before they can understand that there have been definite improvements made that made the Regional Center doable Program that can function in the real-world, commercial requirements.