Making an EB-5 Investment? Here’s What You Should Know About Infrastructure-Based Regional Centers

As you know, all EB-5 investment requires that you invest in the American economy, and that the funds you invest must be, in some way, at risk. Although some of the risk of investing can be lessened by investing in a regional center, the regional centers must offer projects that have a level of risk for investing in order to qualify for the program. But you are probably wondering what the risks are, and how they might differ depending on the regional center that you invest in. Although I am wary of making blanket statements, I can tell you that the different types of regional centers offer different risks and benefits.

In general, there are two major types of regional centers. Some are based around fixed assets such as real estate, and others are based on funding commercial activities or infrastructure projects as a partner with businesses or government agencies. While there are other types of centers, such as agricultural projects, most centers fall into one of the previously mentioned categories. In this article, I will explain the potential risks and benefits of infrastructure-based regional centers.

Most infrastructure-based regional center projects are partnerships with businesses and/or government in a given community. The funds are usually loaned to the agencies or to specific projects that are focused on development of the community. In many cases, this type of regional center offers more security to investors, and often lower-return investments than other regional centers.

These investments are different than those that are real estate-based for several reasons. Because they are often loan-based, they have a set period of repayment, which means that you will know exactly when your investment will be returned, and you won't have to worry about market factors as you might with real estate. Usually the partnerships are dissolved or liquidated as designed by the original contract or exit strategy, so the situation is more predictable than with other types of investment.
In addition, since these projects are often done with participation from local or state government, there may be increased oversight of the project. Of course, this does not mean that there are not risks, but in general they may be managed more carefully, because there may be committees of elected officials or agencies that are making sure that the project is being carried out as planned.

Finally, this type of investment, which is tied to the loans that are made, typically has a defined rate of return. This makes the investment more secure, and often have a lower rate of return than other investments. So, while you are getting the benefits of security and predictability, you may see only a modest profit from your investment. Some investors like the security of infrastructure-based investment, which others may want to take on more risk in order to make more profit.
The choice of which type of regional center you invest in, in many ways, comes down to your personal preference. Remember that you will not only need to decide which type of regional center is best for you, but also which option within that category is best for you. This is a very important decision, one that many investors find difficult. But, focusing on one type of regional center is a very good place to start narrowing down your options. Ultimately, when you make your selection of a regional center, a complex mix of personal preferences and consideration of investment factors will come into play. Remember that, no matter which regional center you invest in, risk is a requirement for EB-5 investment.

If you are ready to speak with an Immigration Attorney about your immigration goals, contact the Law Offices of Vaughan de Kirby at 415-221-2345. We can also arrange a consultation with our counsel in Beijing. For email inquires please contact Lily@deKirby.net.