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Pros of EB-5 Regional Center Designation |
Cons of EB-5 Regional Center Designation |
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Developers can count indirect and induced employment opportunities, and not just direct jobs, in meeting the ten jobs per investor requirement.
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Expensive- regional center designation can cost upwards of $200,000
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Access to low-interest, alternative financing
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USCIS processing times can be lengthy and unpredictable
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Project pre-approval by USCIS is available
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Ongoing USCIS compliance requirements
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Once designated, the regional center can reuse the designation over and over again. Subsequent projects can raise funds as soon as investors are identified, subscribe to the project and file their EB-5 petitions with USCIS.
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On-shore marketing of EB-5 investment opportunities can be difficult given the SEC’s current ban on general solicitation. This may change with the JOBS Act.
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Limited investor involvement in project deal
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Changes to regional center designations (new industries/ expansion of geographic area) require an amendment filing to be made with USCIS that can take upwards of 6 months to be adjudicated
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Ability to adopt outside projects for a fee
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Ongoing administration of regional center requires dedicated staff and resources(filing of Form D with SEC, monitoring investor filings, monitoring job creation, etc…)
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Develops awareness of the company overseas
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The regional center pilot program is set to sunset on September 30th of 2015, absent Congressional action. (Although, we expect that it will be renewed).
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Creates U.S. jobs thereby bolstering public image
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Competition from other regional centers for investors
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Regional center designation provides an aura of government endorsement which is useful in marketing abroad
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Success in an EB-5 raise depends on ability to effectively market to foreign investors
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