Approximately what percentage of all EB-5 investment programs purchased through Regional Centers actually make money for the investor? Is it more likely that an investor would make money off of a direct investment?
Like any business investment, there is no guarantee of making a return. As per the EB-5 regulations, your capital is at risk, however an annual interest return of up to 3% may be offered by the regional center. Again, this is not guaranteed as it would violate the capital must be at risk EB-5 doctrine.
These types of statistics are not really available. Every project is different and deals are evolving as the EB-5 market evolves, with the trend being that investors are given some rate of return. When reviewing potential projects for investment, it is advisable to conduct careful due diligence of the investment as you would with any other type of investment through consultation with a business adviser.
The idea is for the investor to make money. As with any business enterprise, profit is the ultimate goal. As to how many have in fact made money, those statistics are not available. As such, you would need to contact the Regional Center to determine what kind of ROI has been made.
There is no single source that I am aware of that would contain this information. There are about 300 regional centers in the United States, and only about 15 have investor clients with I-829 approvals. There is a compliance and reporting requirement that may contain some of this information, but it is filed by each individual regional center with the USCIS each year. I don''t think there is any reason to think that direct investments in general have more potential financial upside for an investor than regional centers do. It depends upon the individual investment project; some are good, some are bad, some good ones just have bad luck, like any investment.
Most investment projects in regional centers provide a return on investment.
Because these regional center projects are new and you, as an investor, are required to leave your investment in the project for 5-6 six years (depending on the various project), subject to the approval of I-829 petition. The average return is about 1-3% if it is a genuine and developing project in accordance to plan. You should not expect higher returns because as in any investment, there are many natural economic risks to your investment. In that situation, you may only get partial investment back.
From the subscription and partnership agreements I have seen from various Regional Centers, it appears that investing in their projects is like putting your money into a bank savings account. They pay 1-2% interest rate. There are some other Regional Centers that promise more but I would be wary of them as they are mostly unproven regional centers. You could make more money if you directly invest in a business and run it yourself, but it depends on the business and how it is run. I have seen many franchise owners of various restaurants or 7eleven that make a lot of money and then there are others who go bankrupt. Please note that when you invest directly into a business, you will be operating that business yourself in most cases, which will give you more control than Regional Centers but also you will be working a lot more.
I do not believe there are any statistics on investor returns from regional center projects. Keep in mind that this is actually a marketing question. For the most part, a return on investment does not tend to be as important to an investor as does approval of permanent residency. The range of interest rates through regional centers generally ranges from as low as .25%/year to 2-3%/year. It is rare that an investor will find a regional center project that offers a greater interest rate. As to whether a direct investment would result in a greater return for the investor, that is entirely possible. It all depends on the deal that the investor strikes with the project principals.
