The Immigrant Investor Pilot Program (Pilot Program) was created by Section 610 of Public Law 102-395 (October 6, 1992). The Pilot Program provides for investments that are affiliated with an economic unit known as an EB-5 regional center. These investment allow for a less restrictive job creation requirement based upon the creation of “indirect” and “direct” jobs. A regional center is not merely a defined geographic area but rather is a business entity that coordinates foreign investment within that area in compliance with the EB-5 statutory, regulatory and precedent decision framework.
A regional center is officially defined as any economic entity, pubic or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.
Organizers of a EB-5 regional center seeking the “regional center” designation from the USCIS must submit a proposal, supported by economically or statistically valid forecasting tools, showing:
- How the regional center plans to focus on a geographical region within the United States. The proposal must explain how the regional center will promote economic growth in that region.
- How, in verifiable detail (using economic models in some instances), jobs will be created directly or indirectly through capital investments made in accordance with the regional center’s business plan.
- The amount and source of capital committed to the regional center and the promotional efforts made and planned for the business project.
- How the regional center will have a positive impact on the regional or national economy.
The approval and designation of a regional center by the USCIS means that the USCIS recognizes the economic entity as a designated participant in the EB-5 Pilot Program. When the USCIS approves a regional center, they acknowledge that the econometric models and business plans appear to be feasible and that jobs should be directly or indirectly through investment in the approved industry categories.
The regional center designation does not mean that the regional center’s capital investment projects are backed or guaranteed by the government. Further, there are no guarantees that an investor may ultimately be granted unconditional permanent resident status through an EB-5 investment. For example, if it is determined that the investor’s money is not truly at risk or that insufficient jobs were created through the investment, then the investor’s petition may be denied. Investors should exercise due diligence when making an EB-5 investment.