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What should we take into consideration if we want to buy a regional center?

We are an India-based migration agency that has been working in the EB-5 industry for several years. Recently we were approached by a regional center owner who was considering selling his regional center. We are interested in buying but are not sure what some key elements are that we need to look for or be cautious about when reviewing such an offer. What should we consider in this decision?

Answers

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    Julia Roussinova

    Immigration Attorney
    Answered on

    New regulations may prohibit RC ownership by foreign persons.

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    Daniel A Zeft

    Immigration Attorney
    Answered on

    My understanding is that proposed DHS regulations prohibit foreign ownership of a regional center.

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    A Olusanjo Omoniyi

    Immigration Attorney
    Answered on

    The purchase of a regional center involves a series of corporate, taxation and immigration laws. However, be on notice that there are specialized issues that will need to be addressed, such as whether the U.S. Department of Homeland Security will eventually allow the emerging company or ownership to successfully operate the regional center. Do the typical M&A due diligence on the entity in question and its operations and, with the help of legal and accounting experts, look at least the following issues: the business history and its current financial records, history and current of its operations in terms of assets, taxes and project management, regulatory records both with state and federal agencies, labor and employment records, just to name a few. Avoid engaging in one-on-one gentleman negotiations just to be sure proper steps are taken.

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    Vaughan de Kirby

    Immigration Attorney
    Answered on

    There are many elements to consider. One key caveat is that part of Congressional bills that have been proposed is a provision that it will be prohibited for a regional center to be owned or controlled by a foreign national. I recommend you consult with a law firm that has experience in both the sale and formation of regional centers. Remember, if you buy a regional center with a problem, you have bought that problem.

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    Phuong Le

    Immigration Attorney
    Answered on

    Before you even consider buying the RC, hopefully they disclosed to you that depending on the direction the rules break, foreign-based entities may not be able to own RCs. Caveat emptor.

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    Belma Chinchoy

    Immigration Attorney
    Answered on

    An answer to this question is beyond the scope of this forum and you will need individualized professional services in this process. But to start, consider the RCs past projects and current obligations to investors.

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    BoBi Ahn

    Immigration Attorney
    Answered on

    You need to thoroughly vet the regional center and its operation, performance and prior track record (i.e., financial history, management, I-526 and I-829 history and success rates, etc). Have an attorney perform due diligence on the regional center before you make the decision.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    New regulations may require RCs to be owned by U.S. persons, so keep an eye on that. Otherwise, look into the projects it has in its portfolio very carefully, as the failure of any one could affect the entire RC itself.

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    Charles Foster

    Immigration Attorney
    Answered on

    The pros and cons for an India-based migration agency buying a regional center would normally be the same as a U.S. party buying an existing regional center. One has the option to set up his or her own regional center, but there are significant costs in conjunction with same as well as timing concerns. As a practical matter, the value of the regional center, of course, would be based upon the asking price, which in part would at least be based upon a variety of factors. These include the cost of setting up a regional center from scratch as well as the value of having access to the regional center upon purchase, rather than having to set a new regional center, which could take a year or even much longer before you could get a favorable determination. But one additional point that you should be aware of: There is proposed EB-5 reform legislation whereby under the so-called "integrity provisions," a foreign entity would be prohibited from owning and operating a regional center. Eventually EB-5 reform legislation will pass and it is somewhat likely, if not probable, that there will be such a legislative prohibition. In that case, you could lose the value of your purchase if you were required to sell same.

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