In 1990 Congress created the EB-5 Program, also referred to as the Immigrant Investor Program, to help boost the U.S. economy and create jobs by attracting foreign investment from qualified foreign nationals. The EB-5 Program is Administered by the U.S. Citizenship and Immigration Services (USCIS).
The EB-5 Program benefits qualified foreign investors by allowing them to obtain their permanent residency and become productive contributors to U.S. communities. The term qualified investor refers to those individuals who meet specific capital investment and job creation requirements.
Congress further enhanced the economic impact of the EB-5 program in 1992 by establishing the concept of the EB-5 Regional Center (RC), a service agent organization designated by United States Citizenship and Immigration Services (USCIS) intended to facilitate the arrangements between investors and companies in order to complete a project under the EB-5 Program.
An EB-5 Regional Center sponsors capital investment projects for investment by pooling EB-5 capital from multiple foreign investors for investment in USCIS-approved economic development projects located within a defined geographic region and in specific industries.
The major advantage for regional center designation is that the Regional Center can take advantage of indirect job creation by helping EB-5 investors and project developers mitigate the hurdle of meeting qualifying job creation requirements under the EB-5 program rules.
A List Partners Regional Center is a private economic entity established as a security that is filed with the Securities and Exchange Commission whose purpose is the promotion of increased domestic capital, job creation, improved regional productivity, and increased economic growth. Regional Centers are ideal for EB-5 applicants who are more interested in obtaining residency status in the United States than directly managing an investment on their own. Investment into A List Partners Regional Center is limited to accredited US Investors and Non-US Investors who meet the requirements for investing directly into a security in the US. EB-5 Investors may also invest directly into A List Partners Regional Center as an additional investment to their EB-5 investment into a sponsored development project.
Each sponsored development that is set up through A List Partners Regional Center has its own security filed with the Securities and Exchange Commission that is specific to that particular development. Only EB-5 Investors may invest into that security that is particular to a development. Investors become equity owners in the fund that is set up for them. Then, the fund either purchases equity in the job creating entity (the equity model) or loans the job creating entity money (the loan model). The job creating entity then uses the investment from the fund in the project to create jobs indirectly.
The primary advantage for using A List Partners Regional Center is that like all Regional Centers, USCIS will allow the project to count indirect and induced jobs in addition to direct jobs towards the job creation requirement.
Direct jobs are actual identifiable jobs for qualified employees employed by the commercial enterprise into which the EB-5 investor has directly invested his or her capital (the fund). Indirect jobs are those jobs shown to have been created collaterally by the project as a result of capital invested in a commercial enterprise affiliated with a regional center by an EB-5 investor. Induced jobs are new jobs that are created within the community where a regional center is located as a result of income being spent by EB-5 project workers.
The number of indirect jobs created through an EB-5 investor’s capital investment is based upon a business plan and a detailed economic analysis, which is evaluated and approved by USCIS.
Investors in a new commercial enterprise affiliated with a Regional Center are not required to be directly involved in the day-to-day management of the business. The investor instead becomes a limited partner or member of the LLC, respectively, and receives all of the benefits of the State’s Uniform Limited Partnership Act or Limited Liability Company Act. Those rights are sufficient involvement for the investor to qualify for an EB-5 visa within the construct of the Regional Center.
Under the Regional Center investment model, the investor can reside anywhere in the United States and is not required to live within the geographic area of the project. Additionally, the investor’s employment is not tied to the new commercial enterprise or the project. The EB-5 visa also allows the investor’s dependents (spouse and unmarried children under the age of 21) to move permanently to the United States where they may go to school or work without restriction in the United States.
Non-EB5 Investors into A List Partners Regional Center enjoy high returns on their investments because of the multiple income streams that come into the fund.