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What would the buyer of an EB-5 regional center be paying for?

I am considering purchasing a regional center. I've always assumed that regional centers represented pooled investor funds, but there are also administrative fees earned by the regional center management. These are often described as reimbursable to the EB-5 applicant. What are buyers of regional centers actually paying for? Would it be of any concern, for instance, if the regional center CEO sold the regional center to make a personal purchase?

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    John J Downey

    Immigration Attorney
    Answered on

    You really cannot buy the regional center. You purchase the underlying corporation and treat it as a usual corporate purchase.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    I would carefully review the I-924A annual report to see what projects are presently affiliated. There are hundreds of regional centers, most of which have limited value, unless you want to launch an investment project in which foreign nationals are able to invest in order to obtain green cards.

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    Charles Foster

    Immigration Attorney
    Answered on

    You have the option of either setting up your own regional center or purchasing an existing regional center. The advantage of the latter is that it could be faster to purchase a regional center, which would allow you to have a regional center for your proposed project or projects much sooner. What the purchase of a regional center is paying for is time to have the advantage of marketing one's projects or a third party project sooner than you could through establishing a new regional center. The owner of the regional center would normally sell same in order to recoup their costs or even make a profit.

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    Robert Cornish

    Securities Attorney
    Answered on

    Do not go into this blindly with the idea that you can simply buy a regional center like you would any other corporate entity. There will need to be change of control documentation, which would need to be filed and approved by USCIS. If securities and an offering have already been conducted, there will be amendments that will need to be made to all offering documents with the attendant filings to the SEC and the states as necessary. As for what you would be buying, you would essentially be buying a license to supervise and approve EB-5 investment projects, as well as the duties to supervise sales activities and compliance with the securities laws. The regional center earns money through administrative fees that are paid in connection with the offering in the project, as well as through other fees that can be earned with the proper securities registration. With that in mind, due diligence on the purchase through counsel is an absolute necessity, as you do not want any contingent liabilities to arise that were not disclosed.

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