All Regional Centers have additional costs over the required $500,000 to cover administrative costs, acquisition costs, and finders’ fees paid to agents who refer investors. These additional fees generally range from $35,000 - $60,000.
If the Regional Center project is in a Targeted Employment Area (TEA) you can qualify to invest the minimum threshold of $500,000.00. However, Regional Center projects are not necessarily in TEAs.
If you invest in a regional center project located in a Target Employment area, you may qualify for minimum investment of $500,000. Please note the investment is independent from Legal and administrative fees.
NO! The mere fact that you are investing through a Regional Center does NOT control the amount of investment! The actual job-creating project in which you invest must be in a legally defined Targeted Employment Area (TEA) in order to qualify for the lower investment amount.
If the project is located in a Targeted Employment Area (TEA), then the required investment amount would be $500,000. If the project is located outside of a TEA, then the required investment amount would be the standard $1 million.
In both cases, however, while the actual investment amount being used for job creation would be either $500,000 or $1 million, there will be additional fees (sometimes referred to collectively as an 'administrative fee'). This administrative fee is a source of revenue for the regional center that allows the entity to cover its costs in admitting investors. This fee typically ranges from as low as $15,000 to as high as $50,000. This relatively large disparity typically depends on how involved the regional center gets in the investors' legal requirements, and the regional center's agency costs.
Usually yes, but sometimes no. The majority of Regional Center affiliated projects are located within a Targeted Employment Area (TEA), which effectively reduces the required capital investment amount to $500,000 (only), meaning the "actual" investment into the new commercial enterprise itself is only $500,000.
The administrative fee that Regional Centers charge is not an "investment," per se. It is a fee charged by Regional Centers for their operational and administrative costs, and it is not considered part of your capital investment.
The Regional Center designation removes the burden of "direct-jobs" only being counted toward the 10 job requirement. It allows for indirect and induced jobs as well.
Invest in a Regional Center project that is located in a TEA, and yes, you will only have to invest $500k. Doesn't mean the regional center won't require you to pay a $50k administrative or subscription fee.