Will My Business Qualify for Regional Center Approval?
There are two different programs in which the EB-5 immigrant investors are allowed to invest in; the regular Direct EB-5 Program and the EB-5 Regional Center Pilot Program.
To encourage immigration through the EB-5 category, Congress created the temporary Regional Center Pilot Program in 1993.
The Pilot Program was created to stimulate economic activity and to create jobs for U.
S.
workers, while simultaneously giving eligible aliens the opportunity to become lawful permanent residents.
Through this innovative program, foreign investors are encouraged to invest funds in an EB-5 Regional Center and project that have been approved by the U.
S.
Citizenship and Immigration Services (USCIS).
A Regional Center (RC) is defined by "any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation or increased domestic capital investment.
" In order to receive Regional Center designation from the USCIS, the business entity must submit a proposal along with business plans and other detailed documents showing how it plans to focus on development of a business and economic impact in a specific geographic region within the United States providing the specified growth.
The proposal must show in detail how the EB-5 investment funds will be used to create direct and indirect jobs.
Regional Centers typically look to be formed in certain areas called "TEA" (Targeted Employment Area); the definition of "TEA" is a geographic area or political subdivision located within a metropolitan statistical area or within a city or town with a population in excess of 20,000 with an unemployment level at least 150% of the national unemployment rate.
TEAs within a state can also be identified and designated by the Governor of the specific State provided the proper documentation is provided to USCIS.
If the RC achieves this TEA designation, they will then be able to take advantage of the lower capital investment requirement of $500,000 from the EB-5 immigrant investors.
The most important requirement from USICS that all applicants should keep in mind is that the business (or "project") applying for RC designation approval, must prove that ten (10) permanent jobs will be created and sustained for a minimum of two years per every $1,000,000 or $500,000 (if RC is located in TEA) received from EB-5 immigrant investor.
The USCIS also reviews the RC's Business Plan and Marketing Plan along with the Business Plan and Offering Documents for each individual EB-5 Project within the Regional Center.
Statistics show a 105% increase in initial Regional Center proposals filing in fiscal year 2011 first quarter.
By the end of fiscal year 2010, the USCIS confirmed 110 RC proposals had been filed and at the end of the first quarter for fiscal year 2011, 116 RC proposals had already been filed.
In fiscal year 2010, approximately 55% of the initial proposals were approved and in fiscal year 2011 first quarter, 76% of the initial proposals were approved.
It is clear that the EB-5 Pilot Program has increased in popularity in the past year.
You may have the greatest idea for an EB-5 opportunity and more than likely, if presented to par with the USCIS' requirements, your application will be approved; however, if you do not have the right marketing plan or the best marketing team it is likely that the Regional Center will fail to attract immigrant investor.
It is highly recommended that those businesses seeking EB-5 Regional Center designation work with the right team to develop a winning business plan and marketing strategy that will be used to raise EB-5 capital from foreign investors.
To encourage immigration through the EB-5 category, Congress created the temporary Regional Center Pilot Program in 1993.
The Pilot Program was created to stimulate economic activity and to create jobs for U.
S.
workers, while simultaneously giving eligible aliens the opportunity to become lawful permanent residents.
Through this innovative program, foreign investors are encouraged to invest funds in an EB-5 Regional Center and project that have been approved by the U.
S.
Citizenship and Immigration Services (USCIS).
A Regional Center (RC) is defined by "any economic unit, public or private, which is involved with the promotion of economic growth, including increased export sales, improved regional productivity, job creation or increased domestic capital investment.
" In order to receive Regional Center designation from the USCIS, the business entity must submit a proposal along with business plans and other detailed documents showing how it plans to focus on development of a business and economic impact in a specific geographic region within the United States providing the specified growth.
The proposal must show in detail how the EB-5 investment funds will be used to create direct and indirect jobs.
Regional Centers typically look to be formed in certain areas called "TEA" (Targeted Employment Area); the definition of "TEA" is a geographic area or political subdivision located within a metropolitan statistical area or within a city or town with a population in excess of 20,000 with an unemployment level at least 150% of the national unemployment rate.
TEAs within a state can also be identified and designated by the Governor of the specific State provided the proper documentation is provided to USCIS.
If the RC achieves this TEA designation, they will then be able to take advantage of the lower capital investment requirement of $500,000 from the EB-5 immigrant investors.
The most important requirement from USICS that all applicants should keep in mind is that the business (or "project") applying for RC designation approval, must prove that ten (10) permanent jobs will be created and sustained for a minimum of two years per every $1,000,000 or $500,000 (if RC is located in TEA) received from EB-5 immigrant investor.
The USCIS also reviews the RC's Business Plan and Marketing Plan along with the Business Plan and Offering Documents for each individual EB-5 Project within the Regional Center.
Statistics show a 105% increase in initial Regional Center proposals filing in fiscal year 2011 first quarter.
By the end of fiscal year 2010, the USCIS confirmed 110 RC proposals had been filed and at the end of the first quarter for fiscal year 2011, 116 RC proposals had already been filed.
In fiscal year 2010, approximately 55% of the initial proposals were approved and in fiscal year 2011 first quarter, 76% of the initial proposals were approved.
It is clear that the EB-5 Pilot Program has increased in popularity in the past year.
You may have the greatest idea for an EB-5 opportunity and more than likely, if presented to par with the USCIS' requirements, your application will be approved; however, if you do not have the right marketing plan or the best marketing team it is likely that the Regional Center will fail to attract immigrant investor.
It is highly recommended that those businesses seeking EB-5 Regional Center designation work with the right team to develop a winning business plan and marketing strategy that will be used to raise EB-5 capital from foreign investors.
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