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What is the difference between the EB-5 regional center and project developer?

What is the difference between the EB-5 regional center and the project developer? What is the developer responsible for in terms of the project? And what is the regional center responsible for?

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    Peter Zhang

    Immigration Attorney
    Answered on

    The regional center conducts due diligence of potential EB-5 projects and markets them thereafter to eligible EB-5 investors. The project developer often receives the EB-5 funding from a newly created company managed by the regional center as a loan or an equity contribution. Ideally, there should not be a conflict of interest between the regional center and project developer.

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    Charles Foster

    Immigration Attorney
    Answered on

    An EB-5 regional center has been approved by the U.S. Citizenship and Immigration Services, and the ownership of the regional center and the developer of the project may be one and the same or they may be completely different. Some regional centers are set up for the purposes of attracting projects and other developers set up their own EB-5 regional centers. Typically, the EB-5 regional center where the project is separately owned and operated is responsible for making sure that the project complies with the legal requirements for the EB-5 regional center program and often for marketing the project and raising a certain percentage of the funds.

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    Bernard P Wolfsdorf

    Immigration Attorney
    Answered on

    With some regional centers, the developer has their own regional center, especially the bigger ones. However, they have two separate and distinct roles. The developer obviously builds the project. The regional center is the critical entity responsible for oversight that needs to maintain documentation, obtain and update TEA designations and file annual reports, etc.

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    Phuong Le

    Immigration Attorney
    Answered on

    Good question - both play vital roles. The EB-5 regional center is usually the sponsor of the project (and oftentimes creates the EB-5 financing entity for the project). Their role is to lend their regional center "license" to the project to allow it to raise EB-5 funds through their regional center. The project's role is usually to lawfully use EB-5 funds to create sufficient job creation for all the investors as well as eventual repayment of the funds. The regional center is responsible for overseeing and monitoring this process on behalf of its investors and to ensure that the project is proceeding as outlined in its business plan. Put another way, the regional center usually represents the lender and the EB-5 investors' interests. The project developer usually represents the borrower and project's interests.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    These are very good questions that should be answered by your broker dealer and investment immigration attorney. The answer to these questions will turn on the terms of the particular project you may select. There is no one universal answer.

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