I recommend using my EB-5 Due Diligence Questionnaire below to compare Regional Centers. If you have any other questions to ask, add them to my questionnaire.
Investors Due Diligence regarding EB-5 Project
a. What is the projected return on investment? (in Prospectus)
b. Obtain documentation of returns on past EB-5 investment projects.
c. How many projects has EB-5 company completed?
d. May EB-5 applicant need to invest additional money over and above $500,000 at a later date?
e. Does EB-5 project have U.S. investors as well as immigrant investors?
f. Does applicant get interest on money until it is spent on EB-5 project?
g. When is the return paid? Monthly, yearly, end of project.
h. How is the return determined?
i. In Subscription Agreement or Purchase Contract, is there a provision for return of money if I-526 denied? How much is refunded?
j. Does the investor have to make any deposit or pay any fee for the offering materials?
k. What is the amount required to be paid by the investor?
l. Does the Regional Center provide regular reporting of the status of the investment to the investors? At what intervals?
m. Does a referring attorney get any fee from the Regional Center? How much?
n. Has any Regional Center project lost money? Been in default? Investors lost money? Any law suit?
Investors Immigration Due Diligence
a. How many I-526 approvals?
b. How many I-526 denials? Reasons?
c. How many Conditional Green Card approvals?
d. How many Conditional Green Card denials? Reasons?
e. How many Removal of Conditions approvals?
f. How many Removal of Conditions denials? Reasons?
Investors Due Diligence of Regional Center. Will Regional Center company and principals be in business in the future for Removal of Conditions?
a. Obtain Bank reference of EB-5 general partner and/or principals
b. Obtain Dunn and Bradstreet on general partners and/or principals.
c. Any past law suits? (Regional Center, general partners or principals)
d. Any past criminal convictions? (general partners or principals)
e. When was Regional Center established?
f. How long has EB-5 company been doing business? Any previous business?
g. When can the investment be sold? When can client get money ($500,000) back? How many investors have received return of investment?
h. How is the amount determined?
i. How many years of experience does the general partner or principal in the investment project have in working with immigrant investor programs?
j. What precautions are taken to monitor job creation? What steps are taken if the requisite job creation has not occurred?
Determining which regional center will receive your hard earned $500,000 (assuming their Project is in a TEA) is a very personal choice. The criteria that you might use to make that determination may be very different than another investor's. For instance, you may be interested in a particular industry or a particular region of the United States. No matter what type of project you are considering, I have some very general advice:
1) Thoroughly review the Private Placement Memorandum (PPM) and Business Plan of all projects you are considering. If there is no PPM and/or Business Plan, you should look elsewhere.
2) Thoroughly review the other corporate documents provided by the regional center, for instance the Limited Partnership Agreement or Limited Liability Company Operating Agreement, Subscription Agreement and Escrow Agreement. If these documents are inconsistent with the PPM and Business Plan, you should look elsewhere.
3) To the extent possible, research the claims made in the PPM and Business Plan. Confirm the track record of the principals, discuss the claims made with independent people in the same industry as the Project that you know and respect. This is very basic "due diligence" and is essential to making a decision with confidence.
4) Ignore any claims or promises that are not written down in either the PPM, the corporate documents or a side letter. If a claim is only made verbally, you will have a difficult time proving that you relied on it, should you have reason to complain later.
5) Do not ignore your "gut." Sometimes when things are too good to be true, they are.
Good luck with the process, I wish you the best!
Please note: Even though I am an attorney, this answer is not legal advice, it is merely information that I hope you find useful. Should you require legal advice please retain the services of an attorney.
The Immigrant Investor needs to choose in which Regional Center to invest. The investor should research Regional Centers to look at past history and speak to an attorney, but the decision is ultimately up to the investor.