You are hereFrequently Asked Questions / Regional Centers -- Features, Benefits & Requirements / [HOT] [Q] Can any RC EB-5 project involve a loan directly from individual investors to a job-creating borrowing company?
[HOT] [Q] Can any RC EB-5 project involve a loan directly from individual investors to a job-creating borrowing company?
No, absolutely not. To our knowledge, no RC Program is carrying on this kind of investment structure involving individual EB-5 investors lending directly to a job-creating borrower entity for at least three reasons: 1) it's against EB-5 law; 2) no RC Program would be this ignorant; and 3) USCIS will not approve a regional center with such investment structure. :)
Having said this, however, pursuant to a precedent AAO decision, Matter of Izumii, it is permissible for individual investors to invest (or contribute capital) in a limited partnership which can then lend that money to job-creating business carrying out a project that creates jobs either directly or indirectly (or induced), to foster an economic growth and job-creation in a particular geographic region. In other words, the limited partnership can engage in lending activity.
We believe designated RCs now generally are pretty careful to follow all requirements of EB-5 law, especially in light of the EB-5 RC Program's checkered history.