What are the differences between renting a EB-5 regional center and starting a new EB-5 regional center?

It will be time-consuming and expensive to form your own regional center and you may want to look at the reputable well-established regional centers to come under their umbrella for your initial project.

Since starting a new regional center designation process is time consuming, if there is some urgency, you have the option to rent an existing Regional Center for the first project. In the long run, better to have your own regional center as that would save cost/fees, and ownership of the process.

An application for a new regional center is a lengthy and expensive process. If you associate your project with an existing regional center, then you will pay a significant fee and you are confined to the framework and legal parameters of the approved regional center.

The advantages of renting an existing regional center versus starting a new one are many. Just to mention a few ones. First, the time for setting a regional center takes several months while renting one can be a matter of weeks. This allows the renter to get into operation quicker. Second, it cost less to rent than less than establishing one. Third, the management team for a rental is usually in place to at least get the operation of the center off ground. The disadvantages do exist but can be minimized if good due diligence is employed at the beginning. First, a rented regional center is as good as the reputation of its predecessor. It is advisable this should be diligently searched and considered. Secondly, the accounting and management of a rental/lessor may not fit well with the renter/lessee. Advisably, the necessary due diligence before making the final choice of whether to rent or not.

It is faster to "rent" an EB-5 Regional Center. It would take at least a year or much longer to organize your own Regional Center. Regional Centers are necessary when you are seeking a number of investors as it will allow you to count not only direct jobs, but also indirect and induced jobs based upon appropriate economic studies. If you do "rent" a Regional Center they will charge you a fee, but it''s a way to get into the market much faster. You can combine these approaches by initially "renting" a Regional Center while working to establish your own Regional Center at the same time.

Control, cost, and project timeline.

It can come down to three things: (1) the cost of "renting" or affiliating with a regional center; (2) the potential liability in owning one; and (3) the timing in which you can raise capital for your project. I would recommend affiliating with an existing regional center now, and then concurrently filing for your own regional center. The time it takes to obtain regional center status will delay the amount time you can have investors invest through your project and regional center.