There are too many Regional Centers which do I choose?
DUE DILLIGENCE
At this time there are close to 225 Regional Centers (RC) that have received designation (approval) from the USCIS with variety of projects from developing hotels, green projects, assisted-living and nursing homes, mixed-use office and residential facilities, agricultural cooperatives, and commercial and developmental loans.
Many RCs do not have the track record of success let alone any real projects that is “shovel” ready – meaning that they are able to begin immediately or are already in progress.
MSA’s advice to potential investors is not to: invest a large sum of money ($500,000 or $1, million) in a project that will not even give you any assurance that the project will be able to produce enough to remove the conditions on your temporary green card. Further, the Investor must be careful not to invest in a project where the whole principal investment amount is lost due to the project going bankrupt as well as losing any green card benefit because the business of the RC failed and did not create the jobs required
It is important to review the details of the RC and the projects within each RC to verify the viability of the project for investment purposes as well as whether the project will meet the EB-5 green card requirements.
Job creation is the key to making your Green Card permanent – is the job creation methodology used sound? How secure is my money? What is my money being used for? What is the track record of the RC? How many I-526 and I-829 petitions and approvals? How is the RC proposing to return your investment after I-829 approval? – Definite exit strategy exists and is in writing in the offering memorandum. Where did the regional center obtain there T.E.A. designation from? Did the RC repay any of the earlier investors? Will the RC refund all the money, if I-526 is denied? Will they refund both principal and syndication fee or just principal amount? Is this also in writing?
Are there any institutional or non-EB-5 investors investing in the project? What is the portion of each investor? Have any of the regional center principals, their advisers, or anyone connected with the project ever had any negative findings or business failures I should know about?
Below is a list of Due Diligence questions:
2. What type of experience does the Regional Center have?
3. Is the project the Regional Center’s direct project?
4. Do the principals of the Regional Center have any personal ownership in the project?
5. What is the size and location of the project?
6. How many projects does the Regional Center have?
7. Does the regional center have separate corporate or SEC lawyers?
8. Who drafted the private placement offering and the subscription agreements?
9. What is the intake procedure (ex: questionnaire, then subscription agreement, then wire)?
10. How many investors have had their I-526s approved?
11. How many denied? When do you require the full investment?
12. What are the administrative fees?
13. Do you offer referral fees? If so, how much and when is it paid?
14. Where an agent declines referral fees, will you forward the referral fee directly to the investor or any other party the referring agent designates?
15. Is the investment put into a specially designated escrow account?
16. If yes, what are the conditions for release of the investment?
17. What happens if the EB-5 petition is denied? Or if the immigrant visa application/adjustment is denied? Or if the I-829 is denied?
18. How long is the investor obligated to keep my investment in?
19. “Exit strategy”: how does the investor get the principal out and when?
20. What documents will you provide for the I-829?
21. How many I-829s have been filed through your Regional Center?
22. What is the mechanism for ensuring that the required number of jobs is created?
23. What economic methodology do you use to calculate total impacts?
24. What are the investor’s obligations after committing my investment?
25. What is the basic business model (ex: loan to businesses; equity for acquiring property)
26. What is the return on investment? How often is it paid?
27. Do you allow investors to choose their EB-5 counsel, or do you have an exclusive arrangement with one or more firms? How reputable are the lawyers? What type of experience do they have?