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Regional Centers -- Features, Benefits & Requirements


[HOT] [Q] Can direct construction jobs be credited for EB-5 purposes?

[Q] USCIS already stated that indirect and/or induced construction jobs may be credited for I-829 purposes, but had not taken a formal position on the issue of whether direct construction jobs may count. This is the first time that USCIS was forced to take a clear stance on this issue.

Both direct, indirect and induced construction jobs may count, as long as certain conditions are met. USCIS said in one of its letter responding to Senator Cornyn that construction-related jobs can count as direct jobs only if such positions lasts for 2 years or more. Not very likely due to the nature of construction jobs. Review the recently-issued Neufeld guidance memo for details. See www.eb-5center.com/node/382.

[Q] Do Featured RCs have trustworthy escrow system?

Yes, the Featured RCs work with well-known, third-party banks to open escrow account for each EB-5 case. This is very important to make sure that the EB-5 investor's escrowed funds are released only pursuant to the agreed-upon terms and conditions in the escrow agreements with the full advance consent of EB-5 investors and also in compliance with the EB-5 law.

[Q] Do Regional Centers "guarantee" the investment amounts to individual investors?

No, absolutely not. No EB-5 Regional Center, Limited Partnership or any immigration attorney handling your EB-5 Project is allowed to "guarantee" the return of the investment amounts directly to individual investors. That would be not only be against EB-5 law but unethical and seriously dumb thing to do.

[Q] Do all RCs work with governmental agencies?

Some do, some don't. It can be good or bad. I would say working with incompetent government agencies is worse than not working with them, but working with good government agencies is better than not working with them.

[Q] How many immigrant visa numbers per year are available for Regional Center cases and/or TEA cases?

Every year, there are 10,000 immigrant visa numbers (the 10,000 number includes immigrant visas for dependent family members) available for investors and their dependent family members. Out of this 10,000 immigrant visa numbers per annum, 3,000 is set aside for applicants who invest in TEA cases, and additional 3,000 is set aside for applicants who invest in Regional Center cases. This means if you assume each Investor has 3 dependent family members, there are only enough Immigrant Visa numbers per annum for approximately 2,500 EB-5 cases. This isn't that much. Practically speaking, since most RC cases are also TEA cases, there are at minimum 6,000 immigrant visa numbers available for RC/TEA cases, which translates into 1,500 RC/TEA cases. This also is not all that many.

[Q] Out of all EB-5 cases filed with USCIS currently, what is the percentage of Regional Center cases?

According to the information disclosed by USCIS during February 27, 2009 stakeholders meeting, Regional Center EB-5 cases compose of approximately 90% of all EB-5 cases filed with USCIS. This is in line with our personal experience. The problem is that USCIS does not keep a clear stats on RC vs. non-RC cases; therefore, this is an estimate. However, we are almost certain RC EB-5 cases will continue to make up at least 80% + of all EB-5 cases filed with USCIS. The reason? Good RC EB-5 projects offer the best way to meet the job-creation requirements.

[Q] What is a RC EB-5 project involving "troubled business" and associated benefits or disadvantages?

Under the relevant regulation, EB-5 project can involve a "troubled business".

Troubled business

means a business that has been in existence for at least two years, has incurred a net loss for accounting purposes (determined on the basis of generally accepted accounting principles) during the twelve or twenty-four month period prior to the priority date on the alien entrepreneur's Form I-526, and the loss for such period is at least equal to twenty per cent of the troubled business's net worth prior to such loss. For purposes of determining whether or not the troubled business has been in existence for two years, successors in interest to the troubled business will be deemed to have been in existence for the same period of time as the business they succeeded.

[Q] What rights and obligations do I receive when I invest and become a Limited Partner in a Limited Partnership?

You receive all the rights and obligations that you are entitled to as a Limited Partner in a Limited Partnership formed pursuant to the Uniform Limited Partnership Act (the "ULPA") of the particular state. Under ULPA, certain standard provisions have been included to protect the interests of the Limited Partner. These rigths are essentially to participate in policy formation via being able to vote on important issues facing the Limited Partnership, according to the terms of the Limited Partnership agreement. Also, as a Limited Partner, your liability is limited to the amount of your investment.

[Q] What are the basic investment structures and trends of Regional Center EB-5 projects?

Although the Regional Center (RC) EB-5 projects are engaged in a variety of industries, and after you examine many RC structures, it becomes readily apparent there are just two types of investment structures utilized by the Regional Centers.

[Q] What are some of the common characteristics of "good" EB-5 Regional Centers?

The common characteristics of "good" EB-5 Regional Centers are:

1. Relative strong track records in having developed, completed and successfully marketed numerous number of regional center EB-5 projects.

2. Extensive experience in having promoted numerous Regional Center EB-5 projects and having handled I-526 and I-829 applications.

3. Many years of experience in having managed EB-5 projects and being aware of EB-5 issues.

4. A transparent investment structure which has been tested through all phases of EB-5 procedures.

5. Utilizes an understandable, "reasonable" job-calculation methodology in conservative manner.

6. Good team of advisors, including experienced U.S. immigration attorneys.

[Q] Can most Regional Centers accomodate a due diligence visit if I want to check out their EB-5 project?

Yes, if you wish, you should bring your attorney, CPA or your advisor, or anyone whose advice you trust, and hopefully, who is smarter than you when it comes to this kind of matters. Also, if you do not speak or understand good English, you should inform the RCs in advance.

[Q] Can designated escrows used by Regional Centers be trusted?

Yes, most escrows are pretty well-known banks, and I have never heard so far any problems with the escrow banks used by Regional Centers. However, if the escrowing company is a very small bank or non-financial company, I would be concerned, if I were an EB-5 investor who was told to deposit my funds in some unheard of bank at some Caribbean island. Like I said, most RCs I know use well-known, bona-fide banks to act as escrows.

[Q] Why is escrow account used for Regional Center EB-5 cases to hold investors' funds during I-526 pendency?

For two reasons. One, RC cannot have the investor's money wired into the Limited Partnership's bank account until I-526 is approved, because under the EB-5 law, there should not be any commingling of money that is not of lawful source. Therefore, it is always prudent to wait until I-526 petition is approved before releasing the money in the escrow account to the Limited Partnership's account. Second, this is to protect individual investors who do not want to release their moneys until at least their I-526 immigrant petitions are approved, because the chances is if their I-526 petitions are approved, they should in all likelihood obtain Conditional Permanent Resident (CPR) status.

[Q] Do Regional Centers return investor's money deposited in the designated escrow if I-526 is denied?

[Q] I know most, if not all Regional Centers, require that you deposit the requisite funds in the designated bank escrow accounts. Does this money get refunded to the investor in the event I-526 is denied?

Yes, the escrow agreement contains a provision mandating that the money be released from the escrow account directly to the investor in the event of i-526 denial. Therefore, the money does not even go to the Limited Partnership's account; the money is released directly to the investor from the escrow account.

[Q] For RC EB-5 projects, can you apply for I-526 as soon as you have money and docs ready, without waiting for other investors?

[Q] Regional Center EB-5 projects contain many investors who invest in the same project as pooled investors. If I get the requisite money money and documents ready, can I go ahead and apply for I-526 immigrant petition without having to wait for other investors to get ready their money and docs?

Yes, even though a RC EB-5 project has many EB-5 investors participating as investors, each investor can proceed with their EB-5 case according to his own schedule. Otherwise, RC-based EB-5 projects would not be feasible.