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Can multiple people pool their funds and talent to set up an EB-5 Regional Center?

Can multiple people pool funds to set up an EB-5 Regional Center? What then are my requirements as a regional center to investors besides making money? Do I have to invest in certain types of businesses meaning do they have to make certain amount of money? Can I invest in start-ups as a regional center? What are the SEC requirements for setting up regional center? Final question, are there any regional centers that invest in start-ups?

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    Clem Turner

    Securities Attorney
    Answered on

    You have asked some questions that may be based on faulty assumptions. When you talk about pooling funds and setting up a regional center, I think you mean pooling funds to make an EB5 investment in a job creating project. I will try to answer each of your questions in sequence 1) Of course, you can pool funds and talent to start a regional center. There is no minimum capital requirement, but USCIS will want to see that you will have enough capital to handle the day to day expenses of running a regional center. HOWEVER, from a green card perspective, each investor must contribute $500,000 (for a TEA project). That money cannot be pooled, one person must receive sole credit for that $500,000 investment, although that investment covers green cards for the investor and their spouse and minor children. 2) The requirements of running a Regional Center are primarily to make sure 10 jobs per investor are created and to make sure the money is returned, but there are other duties as well. For instance, regional centers have reporting requirements with USCIS. An immigration attorney can give you greater details. 3) You can request authorization for your Regional Center to make investments in any type of business. You only need to make enough money to insure the Investors will be repaid, with a nominal return. 4) Accordingly, you can invest in "start-ups" however you should keep in mind that EB5 is about job creation. You will need to create 10 jobs per investor. Most start-ups are staffed thin, so job creation will be a problem. 5) There are no SEC requirements for starting a Regional Center. There are SEC requirements related to the sale of Interests in the entity that will receive EB5 Investor funds. 6) Technically, most regional centers invest in start-ups, as typically the entity that receives the EB5 investor funds has no operating history. However, that EB5 entity then invests or loans those funds to a Project company, that may or may not be a start-up, but should be affiliated with individuals and companies with long distinguished track records. What I think you mean to ask is whether any regional centers are investing in small, innovative companies that may not yet be generating income. As I said earlier, these companies typically do not have the job creation numbers that would make an EB5 investment worthwhile. I hope this helps.

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    Shahzad Q Qadri

    RC Creator
    Answered on

    Yes numerous people can pool resources to set up a Regional Centers. It can be any business including start up, the SEC regulations as relating to the RC''s are complex and cannot be discussed in a brief symposium. I am happy to discuss it with you.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    Yes, multiple people can pool their funds and talent to set up an EB-5 regional center. Your other questions are very involved and you would benefit from a consultation appointment with an immigration attorney who is experienced with EB-5 matters. Please call my office at 312-360-0959 to schedule a consultation appointment with me.

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    Ed Beshara

    Immigration Attorney
    Answered on

    The questions are excellent and the answers require the input of a qualified EB-5 attorney with the expertise and experience. For instance, under a regional center concept investor funds may be pooled together. While securities attorneys will prepare the offering documents for the investors and making sure all the SEC regulations are complied with.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Yes, multiple people can pool funds and talent to set up an EB-5 regional center. You will need to obtain a regional center designation from USCIS and must meet certain criteria to have your designation approved. There are multiple requirements for regional centers. One of the most important ones is to create directly or indirectly at least 10 full-time jobs per investor. Regional centers have different investment models and get involved in different industries. Some regional centers invest in start-ups as long as they create the required number of jobs. SEC requirements are very complex and, in order to have a successful regional center application, it is important that you have a team of qualified experts to work with you, such as a SEC attorney, immigration attorney, financial/investment advisors, etc. You should speak with an experienced immigration attorney about your specific situation. Your immigration attorney will generally have the necessary contacts to establish a qualified team of professionals to work with you.

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    Larry J Behar, Esq

    Immigration Attorney
    Answered on

    Setting up a successful regional center is a daunting task. We have done it 16 times and are always amazed at the complexity of what it requires from a team of qualified EB-5 specialists. There is no restriction in having one or more organizers of a regional center. In fact, there is no requirement that the applicants be US nationals. Thus, the pooling of funds and resources should be admissible. That said, the organizers of the regional center have numerous administrative and fiscal duties as heads of the RC. They are too numerous to name in just a small article. The epicenter of the EB-5 program is job creation, thus any new commercial enterprise or the expansion or saving of a failing enterprise can be the subject of an EB-5 project. If due diligence is conducted prior to investing, there is no prohibition to investing in a startup so long as the job creation component is addressed. I will leave the SEC requirements to my more qualified colleagues. There are no clear lists of regional centers which historically have invested in startups. I am afraid you will have to solicit each one to assess.

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    Michael B Dye

    Immigration Attorney
    Answered on

    Yes, multiple people may pool their funds and talent to set up an EB-5 Regional Center. Job creation is the most important factor in creating a viable and successful regional center. Speak with a qualified immigration attorney to discuss specifics, as each scenario involves many moving parts.

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    Karen Weinstock

    Immigration Attorney
    Answered on

    Yes, multiple people can fund a larger project as long as each individual investor who qualifies for EB-5 meets all the requirements separately (e.g., you have 10 investors so you need 100 jobs 10x10), etc.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Since there is no requirement that you need to set up an EB-5 regional center and pool investments and particularly since there are over 225 regional centers that have received designation already, I wonder if you really want to set up a regional center. If yes, please consult someone like Lincoln Stone or Ron Klassko, who assists in setting up regional centers.

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    Taher Kameli

    Immigration Attorney
    Answered on

    Yes. But the regional center has to designated by the US government. You need to apply on form I-924.

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    Roberto Ortiz

    Immigration Attorney
    Answered on

    Can multiple people pool funds to set up an EB-5 Regional Center. Yes, you can get multiple people to fund the set up of a Regional Center. It is important to make sure that the set up is properly made. What then are my requirements as a regional center to investors besides making money? The Regional Center has to make sure that the project or projects under the Regional Center create 10 full time jobs either direct or indirect per each investor. Also, some investors want to know if they will be able to recover their investment. Do I have to invest in certain types of businesses meaning do they have to make certain amount of money? When you create the Regional Center, you include the type of business that you would like to have in your Center, i.e., restaurants, hotels, etc. Can I invest in start-ups as a regional center? Please be more specific as to what type of start ups. What are the SEC requirements for setting up regional center? When creating a Regional Center, we will create a team of professionals that will include a SEC attorney. The SEC requirements are that the investors are coming from outside of the United States and that no marketing is being done here. Final question, are there any regional centers that invest in start-ups? Most Regional centers have several industries. The creation of employment is the most important requirement. If the start-ups will create the employment necessary it should not be an issue. Thank you.

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    Jeffrey E Campion

    Immigration Attorney
    Answered on

    Yes, multiple people can pool their funds to set up an EB-5 Regional Center. The Regional Center does not have to make money. But, of course, who would invest in a project in a Regional Center that does not project profits. I think you need to separate the issues. One issue is what a Regional Center must do, which is promote economic growth in a region and report back to USCIS. The other issue is how it is accomplished normally thru New Commercial Enterprises ("NCE"), which have a specific project. You do not have to invest in certain types of businesses that make certain amounts of money. You can invest in start-ups as a Regional Center. The sec rules are quite complex. The sec does not govern a Regional Center per say. Rather, when an New Commercial Enterprise makes an offering the sec then governs that offering. There are Regional Centers that invest in start-ups. All the best!

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    Lei Jiang

    Immigration Attorney
    Answered on

    Yes. You can pool funds for setting up a regional center(RC). One of the basic requirements is that regional center must create required number of jobs. Yes. RC could invest in start-ups.

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    Stephen Berman

    Immigration Attorney
    Answered on

    Multiple people can set up an EB5 regional center. That is not the same thing at all as qualifying for the EB5 visa. The SEC does not regulate how one sets up EB5 centers, they are subject to the same rules as any other securities. A regional center is a location where an investment can be $500,000, rather than $1 Million, it is not an entity that invests money in other businesses.

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    Steven Anapoell

    Securities Attorney
    Answered on

    Yes, multiple people can pool their money to form a regional center. I think you are confusing regional centers with project companies or pooled investment vehicles like LLCs or limited partnerships that raise money and then loan or acquire equity in the project companies. The key to this program is creating the requisite number of jobs (10 per investor). The investor is concerned first with ensuring that the requisite number of jobs are created and then the return of their capital. The securities laws apply to the manner in which capital is raised and the nature of the investment.

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    Philip H Teplen

    Immigration Attorney
    Answered on

    Many Regional Center projects are based on start up situations. The amount of anticipated income is not as important as the qualifications as to the amount being invested, the location of the project for Regional Center qualification and creation of jobs. Regarding SEC requirements, such depends on the number of investors and the amount being invested as well as (in some cases) nationality diversity of investment pool. Each situation is unique and I will be happy to review individual cases.

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    Elizabeth Krukova

    Immigration Attorney
    Answered on

    A Regional Center is subject to stringent requirements to be approved as such. Investing in start-ups may not be a wise idea for many reasons, including back-up of funds, investor assurances, bona fides of representations and many other reasons. SEC requirements are also quite complex if you shape investor''s contributions in form of securities and by definition can''t be outlined in a question-answer format.

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    Boyd Campbell

    Immigration Attorney
    Answered on

    Yes.

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