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What management role would an EB-5 investor have in a regional center project?

I want to go through an EB-5 regional center because the job creation requirements seem to be easier. But I also don't want to just passively invest into the regional center. I want to take an active part in project development and make sure the project is successful. Is this possible when investing through a regional center? What type of management role would I have in a regional center project? How can I ensure that I have an active role in the project's success?

Answers

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    Fredrick W Voigtmann

    Immigration Attorney
    Answered on

    The EB-5 law requires that an investor be involved in the management of the new commercial enterprise. However, the law allows, and most regional centers take advantage of this allowance, for the investor to be a limited partner or otherwise involved in policy formulation activities and not day to day management of the business. Your role in any regional center project will be determined by the agreements you sign (probably a limited partnership agreement or operating agreement) and likely will be very limited. That is just the deal most regional centers offer because either they or the project developer wants control over the project management. If you wish to be more involved in the management of a business, you might consider a direct EB-5 investment.

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    Julia Roussinova

    Immigration Attorney
    Answered on

    Generally, within a regional center project you will most likely be a limited partner in a limited partnership with a right to vote on policy matters or major business purpose changes.

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    Lynne Feldman

    Immigration Attorney
    Answered on

    You would need to check with the particular regional center; in most, you are a limited partner and your role in policy and decision making is quite limited as specified in the documents you sign establishing your limited partner status.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    If you wish to have an increased management role, you can look for projects that offer one. Many regional center projects, while complying with the "active management role" requirement, still limit investor management roles to voting on policy matters. Furthermore, you can look for a project with a single entity structure, rather than one where the new commercial enterprise and the job creating entities are separate. Of course, investing in a direct EB-5 project would allow you as much involvement as you can handle.

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    John J Downey

    Immigration Attorney
    Answered on

    The "active participation" required by USCIS is usually satisfied by your participation as a limited partner. This is, in reality, not that active; you should have your attorney negotiate with the regional center for a more "hands on" role.

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    Robert Cornish

    Securities Attorney
    Answered on

    You can ask to supplement your investment in the project by also purchasing an interest in the general partnership of the fund, if of course the ones running the general partnership do not have issues with spreading the wealth. Due diligence will have to be performed on this investment, which would likely not be a part of your EB-5 investment.

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    Michael A Harris

    Immigration Attorney
    Answered on

    This may not be typical in most regional centers. Most regional centers will use a special purpose vehicle (SPV) that is typically a limited partnership or limited liability company. This is also referred to as the new commercial enterprise or NCE. The EB-5 investor then joins the LP or LLC as a partner or member, and receives a very limited right to participate in the management. The NCE will usually then make a loan to the job creating enterprise (JCE) that is sponsored by the regional center; other NCEs will participate as an equity partner with the JCE in the development of the project. If you are seeking an active management role that allows you to participate in the EB-5 project, then you might want to consider a direct EB-5 project.

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    Jinhee Wilde

    Immigration Attorney
    Answered on

    Most of the regional center projects are comprised of EB-5 investors forming a limited partnership with the regional center as the general partner. As a limited partnership, the investor's role is usually limited to voting on the partnership activities, and monitoring the project progression by getting quarterly or annual reports from the general partner. Of course, the more detailed role of a limited partnership is specified in the limited partnership agreement, but the individual investor will not be involved in any day-to-day operations or management.

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    Ying Lu

    Immigration Attorney
    Answered on

    As far as I know, most regional center projects will not allow the foreign investors to participate in the day-to-day management of the new commercial business. In most cases, the investors will have the power to vote or provide non-binding opinions through an advisory board. An investor usually just takes about one percent share of the business. Therefore, even if the investor was granted the power to vote, his vote would not count too much. If you care a lot about your management role in a business, you should consider starting a direct EB-5 business on your own.

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    Stephen Berman

    Immigration Attorney
    Answered on

    Each regional center is unique and you would have to contact each one to discuss your options. Or set your own regional center up.

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