A regional center is defined in the regulations as any economic unit, public or private, engaged in the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.
Initial and Economic Evidence Requirements
8 CFR 204.6 (m) states in pertinent part that each regional center wishing to participate in the Immigrant Investor Pilot Program shall submit a proposal, to the USCIS, which:
- Clearly describes how the regional center focuses on a geographical region of the United States, and how it will promote economic growth through improved regional productivity, job creation, and increased domestic capital investment;
- You must include a clearly designated map of the entire desired regional center area.
- The Standard Metropolitan Statistical Areas (SMSA’s).
- Any Rural Areas (i.e. areas outside SMSA’s with populations under 20,000 people).
- High Unemployment Areas (TEA’s) as determined by the Governor or appropriate designee to be either (1) areas within SMSA’s, or, (2) populations centers of 20,000 or more outside SMSA’s with unemployment rates 150% or more of the national rate.
- Census Tracts, Cities, Towns, Counties, etc.
- Unemployment Rates by Cities, Towns, Countries or Census Tracts, etc.
- Provides in verifiable detail how jobs will be created indirectly;
- It is imperative to fully explain indirect job creation as well as direct and induced jobs, if any.
- The requirement of creating at least 10 new full-time (35 hours per week) jobs per each individual alien investor may be satisfied by showing that, as a result of the investment and the activities of the new enterprise, at least 10 jobs per alien investor will be created directly or indirectly through an employment creation multiplier effect.
- You must submit an economic analysis model that shows and describes job creation for each category of economic activity.
- Provides a detailed statement regarding the amount and source of capital which has been committed to the regional center, as well as a description of the promotional efforts taken and planned by the sponsors of the regional center;
- A detailed statement regarding the amount of source of the capital that has been committed to the regional center, in addition to the description of the promotional efforts taken and planned by the regional center’s sponsors must be included.
- USCIS has interpreted the words, “amount and source of capital that has been committed to the regional center” to mean the capital sufficient to sustain the regional center distinct from immigrant investors’ required capital investment in a new commercial enterprise within the regional center.
- $150,000 placed in escrow would likely be sufficient to satisfy this requirement. None of the capital required for sustaining the regional center can come from immigrant investors’ required threshold capital investment.
- A plan of proposed regional center operation must also be submitted to sufficiently address how investors will be recruited and how the regional center will conduct its due diligence to accommodate the requirement that all immigrant investor funds will be lawfully obtained.
- Contains a detailed prediction regarding the manner in which the regional center will have a positive impact on the regional or national economy in general as reflected by such factors as increased household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center; and,
- A detailed prediction must be provided which includes the topics of regional or national impact, household earnings, greater demand for business services, utilities, maintenance and repair, and construction both within and without the regional center.
- The proposal should not make vague references to regional economic impacts but should provide actual monetary predictions and address the elements listed in USCIS regulations.
- Is supported by economically or statistically valid forecasting tools, including, but not limited to, feasibility studies, analyses of foreign and domestic markets for the goods or services to be exported [if any], and/or multiplier tables.
In addition to the above listed initial evidentiary requirements, each regional center wishing to participate in the Immigrant Investor Pilot Program shall submit the following:
- An Overall Business Plan
- Draft Operating Agreement
- Draft Partnership Agreement
- Draft Subscription Agreement
- Draft Escrow Agreements and Instructions (one for capital and one for any service fees)
- Draft of an Offering Letter, Memorandum, or Confidential Private Placement Memorandum
- Draft of a Memorandum of Understanding, Interagency Agreement, Letter of Intent, or Advisory Agreement
The Cost of Creating an EB-5 Regional Center
- The Initial Economic Evidence Requirement will cost between $15,000 to $50,000 depending desired regional center location, project complexity, and economic model utilized.
- A competent and experienced law firm will likely charge between $50,000 to over $250,000 for the legal documents required above. This cost will depend on the regional center structure and project complexity.
- The required capital considered sufficient to sustain the regional center, distinct from immigrant investors’ required capital investment, can range from $150,000 to well over $1 million. If a regional center plans on attempting one or two small projects per year then $150,000 should be sufficient. However, if the regional center plans on financing massive billion dollar projects that would require in excess of $100 million from EB-5 investors then the capital sufficient to sustain the regional center will be in excess of $1 million.
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Total Average Cost of Creating an EB-5 Regional Center: $225,000 to $1,000,000+