Among more than 250 regional centers that have been designated by USCIS, some have long and well-established track records while others are newly established and relatively untested. The choice of regional center is especially important because the regional center’s continued existence and success demonstrated by predicted job creation accomplishment is very important for the I-829, conditional removal process.

In addition to choosing a regional center, an investor must choose a project as many regional centers have more than one project. The fact that one project of a particular regional center has been successful does not guarantee that the next one will be. The following is a list of some due diligence questions:

Due Diligence List

  • How many I-526 petitions and I-829 removal of condition applications have been filed by investors in the regional center? How many have been approved? How many have been denied?

    Since each project of a regional center will be reviewed separately for approval, a record of a substantial number of approvals and no denials is optimal. Please note that only a small number of regional centers have been in business long enough to have a track record of condition removal approvals, however. Regional centers that have more recently been approved may have very little or no track record of successful EB-5 petitions or of job creation. While this is not a reason to avoid such regional center, it may be a reason to exercise even greater due diligence.

  • Questions you should consider

    Is the regional center affiliated with any government entity? Or, is there a government involvement in the particular project?

  • What kind and how many years of experience does the general partner having working with immigrant investor programs?

    Recently, the Chicago Regional Center for Convention Center project was sued by Security Exchange Commission for fraud. The principal of that regional center was 29 year old man who claimed to have had over 14 years of experience.

  • Key to good EB-5 Investment

    Unlike any other investment vehicle, key to good EB-5 investment does not depend on return on investment but whether the jobs are created. Thus, regional center principals who have extensive experience in projects that have created jobs should be a consideration.

  • When will the investor be able to redeem his or her investment following condition removal? Does the Regional Center have clear exit strategy?

    The investment must be at “risk” in order to qualify for residence under this program, i.e., the investment has to be fully invested until I-829 is approved. However, some investments have a clearer exit strategy than others. Be aware of EB-5 investment that guarantees particular return on investment.

  • What is the regional center’s plan for demonstrating direct or indirect job creation, and is this plan realistic?

    Various economic models exist for demonstrating indirect job creation. Models based on direct job creation may be less flexible. Reviewing the economic report to determine how realistic or conservative the projections on which the indirect job projections are based will be very important. The investor also should look for a project with detailed job monitoring and reporting on a regular basis. Further, in order for all investors in a project to be able to remove conditions, there must be 10 direct or indirect jobs actually created per investor. Thus, the greater the job projection over and above this amount, the more assurance the investor has that conditions will be removed even if fewer jobs than projected are created.

  • What percentage of the total capital is EB-5 money?

    Investors may prefer an investment where there is significant investment from the project developer and/or from traditional, non-EB-5, financing sources. Be aware of projects based entirely on EB-5 investors. Further, If the project is dependent on EB capital, then project may never get off the ground. It is best if the project developer had other back-up capital source so that could launch and could be completed with sufficient other non-EB5 capital.

  • Is the business plan credible?

    If the business plan and the assumptions made in the business plan do not appear to be credible to the investor, they may not be credible to USCIS. If you are not certain, ask for advice of your attorney or financial advisor.

  • What is the reputation of the project developer?

    Ultimately the investor’s fate is in the developer’s hands. The investor should research the history of the developer and his team.

  • Who represents the investors in the regional center?

    Optimally, it is important for the investor to have their own lawyer who will advocate for them without having conflict of interest or divided loyalty with the regional center. However, some regional centers mandate the use of their attorney exclusively. Others permit the investor to have his or her own private counsel, sometimes insisting on partnering with the regional center’s counsel and/or review by the regional center’s counsel.