establishing a regional center

 

What is a Regional Center

A regional center is no more than a defined geographical area in the U.S within which a sponsor seeks to promote economic growth through increased export sales, improved regional productivity, the creation of new jobs, and increased domestic capital investment. The regional center can be as large as an entire state or as small as one square city block.

In developing and operating a designated regional center, the regional center seeks to exploit a specific use for its benefit and those of foreign investors. In doing so, the regional center ascertains the target market and demographic to which the regional center will deliver its services. The following is a sample of the uses that a regional center may chose in modeling its projects:

  • Film & TV Production
  • Health Services
  • International Traffic & Cargo
  • Manufacturing & Research
  • Commercial Office Space
  • Hotel, Leisure Resort
  • Higher Education
  • Trade Schools/ Culinary Schools
  • Airport & Seaport Operations
  • Technology and technology transfers
  • Tourism
  • Transportation
  • Mixed Hotel, Office, Retail & Residential space
  • Conference Centers & Exhibition space
  • Light & Heavy manufacturing
  • Cruise Line support
  • Renovation of obsolete buildings
  • Performing Arts
  • Historical sites & similar Institutions
  • Mixed use : Real Estate
  • Construction and renovation
  • Harbor facilities
  • Gaming & Casino sector
  • Marine Sector
  • Apartments & Condominiums
  • Air Cargo
  • Banking/ Lending
  • Warehouse Distribution
  • Mining and exploration

Regional centers are presumed to require a $1 million investment per investor family, unless the project is situated in a Targeted Employment Area (‘TEA’). This ‘TEA’ can be located either in a rural area where the population is determined to be 20,000 or less, or, where the unemployment of the defined area is no less than 150% of the national average. For example, there are many resort projects which are located in mountain areas, where the local population did not exceed 20,000 in the last census count. Other projects may be situated in areas which are in need of rejuvenation and where the unemployment levels are high. Under either scenario, the Congressional intent is to provide and encourage the much needed economic activity and development to these often remote or blighted areas.

Sponsors of regional centers undertake a great deal of responsibilities to develop, manage, and complete the project. Their duties and obligations are incorporated in the parameters of documents known as the Private Placement Memorandum, Subscription Agreements, and Operating Agreements. These documents govern the conduct of the sponsor and the investor and must be strictly respected and abided by all policies. No document can be signed within the U.S. as the program is strictly designed for foreign nationals.

Targeted Employment Areas (TEA)

Throughout this site, we have briefly mentioned the subject of targeted employment areas, which are commonly known as ‘TEAs’. It is important for developers and investors to have a good understanding of what a TEA is and their role in the EB-5 program.

creating jobsBefore a regional center is created, the developer will research the census tracts as determined by the department of labor of a particular state. Based on this official information, the developer can then determine if the project qualifies as a TEA under population trend guidelines; wherein the population cannot exceed 20,000.

The census tract must be recent and based on the most current census information obtained by the state. Each county and area within the state will have a census tract as they often rely on federal funding for supplementary support. If a TEA is not identified, then the default position is always a $1 million dollar investment threshold for the investor.

An alternative method used to qualify as a TEA is determined by the unemployment levels in the area where the developer seeks to locate the project. As such, if the unemployment level surpasses 150 percent of the national average as determined by the Department of Labor statistics, then the developer has an opportunity to outline the territory for his TEA. The advantage, of course, is that the developer will be able to offer the investment to foreign nationals at the $500,000 level.

Regional Center Compliance & Administration

A designated regional center receives the benefit and thus a privilege to operate a specific use or uses as conferred by the USCIS. Not all regional center designation applications are approved. As such, the receipt of regional center status is a much coveted benefit to the sponsor and their investors.

In order to preserve its qualification, the regional center must be prepared to file an annual report with the USCIS which will provide required information pertaining to each investor including the names, nationalities, and investment amounts. The annual compliance report will allow the USCIS to monitor the progress of the program, and to assess any dangers of over concentration in one area of the world, or flaws in the recruitment of certain investors. The EB-5 program collaborates with the United States of America’s goal to constantly seek diversity, even amongst its wealthier immigrants.

Failure to file the report on time may oblige the USCIS to revoke the Regional Center status of a specific pre-approved center. Aside from the legal liability of the sponsor for this oversight, it places the investors in serious jeopardy of not being able to file the I-829 lifting of conditional residency.

Approved Regional Centers

Currently, the Behar Law Group has successfully obtained USCIS regional center approval for the following regional centers:

 Regional Centers with I-526 Approvals

Disclaimer

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