The Immigrant Investor Pilot Program, also known as the EB-5 Regional Center Pilot Program, was created in October 1992; just two years after Congress developed the EB-5 Immigrant Investor Program.
The EB-5 Regional Center Pilot Program was created in order to encourage foreign investors to invest funds into business entities known as, "regional centers."
According to USCIS, a regional center is any business entity, private or public, that promotes economic growth, improves regional productivity, creates jobs, increased export sales, and increased domestic capital invested that has been designated and approved by the United States Citizenship and Immigration Services (USCIS).
In order to receive USCIS designation and approval, regional center developers must have filed Form I-924, Application for Regional Center Under the Immigrant Investor Program petition, along with a proposal that used economic data and statistics to support their forecast of job creation and economic growth.
EB-5 Regional Center Pilot Program has many requirements for EB-5 investors, however, these requirements are actually less restrictive than the requirements would be if an EB-5 investor invested in the regular EB-5 Program.
These are the requirements for the Regional Center Pilot Program:
- EB-5 investors must invest a minimum of $500,000 in a targeted employment area (TEA) project;
- The EB-5 investor and regional center must be able to verify the investor's lawful source of funds;
- The EB-5 investor must pass background checks;
- The EB-5 investor's investment must create 10 direct, indirect or induced full-time jobs for qualified U.S. workers;
- The regional center and EB-5 investor must comply with all USCIS conditions.
If an investor chooses to invest in the regular EB-5 Program, they may still invest in a TEA, lowering the amount of capital required from $1,000,000 to $500,000 to invest in a new commercial enterprise, but it's more challenging. The majority of USCIS approved regional centers are already established in TEAs, taking away the investor's problems of proving the investment is located in a TEA.
(TEAs are geographic areas that are rural or have an unemployment rate that is 150% of the national unemployment rate.)
Additionally, the job creation requirements EB-5 investors in the regular EB-5 Program face are much stricter than the requirements of the Pilot Program. The EB-5 Regional Center Pilot Program allows for indirect and induced job creation as well as direct job creation, whereas, the regular EB-5 Program only allows for direct job creation, making it a much tougher requirement to fulfill.
As you can see, with so man benefits to investing with a regional center, it's no surprise that most EB-5 investors choose to invest in the EB-5 Regional Center Program.