How is being a regional center investor less risky than being a direct investor?

My experience is that both have risk, but direct EB-5 is the riskiest because having ten full time jobs for the requisite period may cost you several million dollars even if the business is losing money.

Well, first of all, you are not able to use the same type of jobs in a standalone business versus a regional center business. That’s because RC businesses can use indirect job creation. Standalone or direct businesses must use full time employees and must verify those workers. RC businesses use economic impact modeling, which can provide more “bang for your buck” – i.e., more jobs per dollar spent. So, while an investment decision is different when comparing one business to another (no matter whether it’s direct or RC), as far as job creation risks are concerned, there are more jobs that can be created per dollar when factoring that an RC can use direct, indirect, and induced jobs and a direct can only use direct.

One is not per se safer than the other – your own business can work just as well as a reputable Regional Center provided the project is built and ten new jobs are created.

Investing with a reputable regional center is safer since it is likely that the regional center project is bigger and therefore a senior lender is present. With a senior lender in the picture one can get some comfort that the senior lender has conducted its own due diligence and applied strict underwriting standards to approve the deal. Of course, this can be true for a direct deal, but under the new Reform Act, a direct deal can only have one EB-5 investor, which likely means it will be smaller project and in more need of capital.

This is a very broad question. Both options can lead to a successful green card process. Direct investments are a tailored made suit in comparison to a more off the shelf regional center investment which is passive. I’d recommend speaking to an immigration attorney about both options.