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The History of the EB5 Regional Center Program

An eb5 regional center is a business or public economic unit designed to stimulate the United States economy through foreign investment

By groundreportdesk
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The History of the EB5 Regional Center Program

An eb5 regional center is a business or public economic unit designed to stimulate the United States economy through foreign investment. While navigating through the complexities of the EB5 Regional Center Program, it's wise to seek professional help. One highly regarded resource is ZenBusiness; reading some ZenBusiness reviews can give you a precise idea of their quality of service.

The U.S. Citizenship and Immigration Services organization, USCIS, designates and certifies regional centers. An eb5 center can accept and apply cash investments from immigrants seeking to gain permanent residence in the U.S. through the eb5 visa program. This visa allows immigrant investors, spouses, and children under 21 to gain permanent resident status. To qualify for the eb5 visa, applicants must invest in a targeted economic area, TEA, and meet employment creation requirements.

Brief Overview of the EB5 Regional Center Program

The U.S. Congress created the Regional Center Program in 1992, aiming to boost the local economy through foreign investments. With the creation of this legislation, immigrant investors can invest in any USCIS-designated eb5 regional center and gain permanent residency status. The minimum investment required is $800,000, and the new commercial enterprise must employ at least ten qualified U.S. citizens in full-time positions. Regional centers act as the medium between immigrant investors and their eb5 projects.

After the Regional Center Program was first enacted as a pilot program in 1992, it has been reauthorized multiple times. Each reauthorization creates a new time period for visa approval and unique qualification requirements. The latest reauthorization came on March 15, 2022, through the EB5 Reform and Integrity Act. This authorization allows eb5 visas to be approved until 2027.

EB5 Regional Center Reforms and Overhauls

Major overhauls to the Regional Center Program happened in 1998, requiring investors to prove that their investment originated from legal sources. These changes also prohibited investment return guarantees and required investors to be personally involved with their projects.

The early 2000s saw eb5 visa reforms when Congress passed the 2003 Basic Pilot Program Extension and Expansion Act. This act prompted the Government Accounting Office to investigate the eb5 visa program. Investigations revealed that only a fraction of the 10,000 allocated visas were being granted annually. This report prompted further reforms to the visa program. A significant reform happened in 2005 with the creation of the Investor and Regional Center Unit. This unit gained oversight of the eb5 program, from case auditing and form design to policy creation and regulation development.

In 2019, USCIS published further changes to the eb5 program, including raising the investment minimum. The minimum investment went from $500,000 to $900,000 for TEAs and $1 million to $1.8 million for non-TEAs. USCIS also took over TEA designation roles for individual states and introduced priority date retention.

The most recent reauthorization came in March 2022 when Congress passed the Reform and Integrity Act. Under the new reforms, the minimum investment has dropped to $800,000 in TEA areas and $1.05 million outside high unemployment TEA areas. These recent reforms are in effect through September 30, 2027.

Information for EB5 Investors

Based on the latest reforms, eb5 investors must invest in a new commercial enterprise established after November 29, 1990. If the enterprise is older than 1990, investors must purchase, restructure, and reorganize it to create a new commercial enterprise. Another alternative is to expand the pre-1990 enterprise to result in at least a 40% increase in the number of employees or net worth.

New commercial enterprises are for-profit activities created to operate a lawful business. Investors can create sole proprietorships, partnerships, joint ventures, holding companies, corporations, business trusts, LLCs, and other private or public entities. The definition of commercial enterprises excludes noncommercial activities like owning a personal residence. Investors must also create businesses that provide full-time positions with at least 35 working hours per week. Here are some quick facts for eb5 visa investors:

  • The USCIS sets aside 20% of visas for investors in rural areas, 10% for high-unemployment areas, and 2% for infrastructure projects.
  • Assets acquired by unlawful means, invested in exchange for a note, debt, or with a guaranteed return don’t qualify as capital investment.
  • New commercial enterprises established within regional centers can directly or indirectly create job positions. Investors can produce up to 90% of the jobs indirectly.

Finding an EB5 Regional Center

Immigrant investors looking to start a business in the U.S. can gain permanent resident status via the eb5 visa route. If you’re eligible, investing with a reputable USCIS-designated eb5 regional center can increase your odds of success. Choose regional centers that have provided success for clients on I-526 and I-829 approvals. Leading regional centers have helped immigrants invest billions of dollars and create thousands of job opportunities through their investment projects.

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