Regional Center Due Diligence, What Questions Should You Be Asking?

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What regional center due diligence should EB-5 investors conduct?

Regional center due diligence is a major part of the EB-5 process for any potential investor.

Below is a list of some of the main questions investors should ask a regional center.

Past projects:

  • Does the regional center have prior experience working with the EB-5 Program?
  • Do they have past projects with I-829 approvals?
  • Has the regional center successfully return their investors' investments back?
  • How similar were the past projects to the current offering?
  • What is the contact information for any third parties listed in the offering documents? Potential investors will want to check references to confirm information and data.
  • Did they have any issues with the past projects?

Current project:

  • What is the exit strategy and can investors get out of the new commercial enterprise?
  • How does the regional center mitigate risk?
  • What is the capital structure?
  • What percentage of the funding comes from EB-5 investment?
  • Is there a job creation buffer?
  • What is the job creation methodology?
  • How are the jobs allocated to the EB-5 investors?
  • Is the project located in a TEA?
  • Does the regional center recommend project site visits?
  • What are the qualifications of the regional center's executive team?
  • Does the regional center provide transparency to investors?
  • Are investors allowed to see the new commercial enterprises' financial records?
  • What are the management fees?
  • What are the qualifications of the managers?
  • Is the economist independent of the regional center? What is their track record? What methodologies did they use?

Regional center due diligence is an important part of the EB-5 process. Potential investors should discuss their concerns with a qualified EB-5 immigration attorney.

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