Eb5 Visa classification was created by congress to help stimulate the U.S. economy during a slow economic growth period. It was intended to help stimulate the economy by helping create jobs and bring in capital investment by foreign investors. To help facilitate this, the government created “regional centers” to help with the planning and promotion of economic growth in targeted areas. These areas maybe places where the unemployment rate is exceedingly higher than that of the national average, and/ or rural areas. Some of the regional centers are risky ways for a foreigner to invest their funds and in the end, they may not even be able to obtain their visa.
The purpose of a regional center is to obtain funds that are necessary to make a substantial investment in the area. This investment is meant to help create jobs and make the area near the regional center more prosperous. However they don't always work.
So in a regional center; if there are no investors then no money can be invested in the area. The regional center is allowed to make favorable financial terms to real estate developers that are attractive enough for them to use the funds to help to develop the area.
If there are no investors, then no projects can be funded, and in turn no Visas can be created through the EB5 program by the Regional Centers.
Just like a business investment, if the business for whatever reason fails to carry out its business plan and has done everything legally that it was supposed to, then the investor will not get their visa and may possibly lose their investment. As long as the business was operating legally and failed for legitimate reasons, then the investor may not obtain a permanent residency and may lose their investment. There is no protection if the business files for bankruptcy or is unable to pay off its loans and liens.
The investor may be entitled to recover some of their investment if a regional center fails, however they will have to deal with all of the other creditors that the regional center owes debt. Whatever the financial outcome of the investor, they will be forcing to start the process over and invest in another regional center project if they still wish to obtain an EB5 visa through another regional center. The regional centers have happened to be a common areas of cases of fraud and abuse.
One of the drawback of the Regional Centers is that they are not all vetted. That is to say, the government does not inspect each regional investment to make sure that they are conducting business legitimately. These centers collect money from foreign investors and may potentially misuse it for their own purposes because of the lack of proper supervision and accountability. For instance, the money may not go towards creating jobs for United States workers or towards stimulating the United States economy, and thus may lose its qualification for the EB-5 immigration program. In such instances, foreign investors are left without their money and without the means of qualifying for the United States residency.
We may also experience a practice of lack of transparency when investing in regional center projects. The project itself may be vague, with little or highly complex details on how exactly the funds will be used. In cases of fraud, no construction has even been begun on the project and all the funds have been diverted overseas to foreign nations, leaving the investors account empty of their investment.
There have been investigations on regional centers that have targeted foreign investors who have tried to use a regional center as a way to obtain a visa though the EB5 program. The fraud may exist either by misrepresentation on what the investment would be used for, how it would be used, or the extent of the return on the investment. Such exploits have been used to lure foreign investors that have little or no knowledge of how the Regional Centers operate.
But, not all regional centers are bad. There are legitimate regional centers that manage development projects which create jobs, would help the economy of the region and would ultimately allow the investor to gain a US Green Card.
An immigration attorney is not a business evaluator or certified financial advisor. However an experienced immigration attorney may be able to help you to unravel the facts about each project or business or refer you to a business advisor. If you decide to use regional centers, instead of controlling and managing your own money; its would be critical to know that you may risk any and all your money, as “at risk asset” is one of the requirements of an Eb5 visa investment.
Its important to make a clarified, informed and calculated decision. You may think about Direct-Eb5 Investment before you sign with a regional center. Or you may use a “Certified Financial Advisor” or a “Business Advisor” before you invest. At any rate, be aware that US Congress has made “At Risk” notion of your Investment, one of requirements of Eb5 Visa. If you lose your money , you can't complain. If you lose your Job Creation requirement, you can't complain. But remember there are legitimate and good regional centers which attract investors and give them and their family members a green card.
In order to be sure that you meet the requirements for an EB-5 Visa and/ or to properly file a petition, it is advisable to seek legal guidance from a knowledgeable immigration attorney.
This is an immigration legal blog. It is not intended to be used as legal advise. For further information please contact the law offices of attorney Ramona Kennedy.
Ramona Kennedy (Attorney) received her Jurisprudence Doctorate in America and is a licensed attorney in California (USA). Ramona Kennedy is a member of American Immigration Lawyers Association (AILA). Ramona Kennedy is fluent in English and Farsi (reading & writing) & speaks Azeri Turkish.
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