Select Page

When the EB-5 Immigrant Investor Program started, all business projects involved direct Investments because the option of applying through regional centers was not established until several years later. The arrival of the option of applying for the EB-5 status through an investment made via a regional center saw a dramatic move away from direct EB-5 Investments and toward a completely different investment vehicle. Many EB-5 advisors, however, believe that foreign nationals generally overlook the many benefits that come with the route of Direct EB-5 Investments.

When it comes to which of the two available routes to choose, investors generally overlook the fact that regional centers will require regular reauthorizations in order to remain part of the EB-5 program,whereas Direct EB-5 Investments are a more permanent option to be part of this valuable program. While the regional center option has been renewed quite successfully in the past and it seems to have a bright future ahead, regional centers remain an impermanent option for investors.

Passive and Active EB-5 Investments

The main difference between regional centers and Direct EB-5 Investments is the amount of control foreign investors have in each type of investment. With the regional center option, the foreign investors will remain limited partners who supply the money but are not involved in the day-to-day operations of the business. While this option suits many EB-5 investors and has been growing in popularity over the last couple of years,investing through a regional center means that investors have little input beyond the right to vote with other limited partners on some business-related matters, which makes them passive investors.

On the other hand, immigrants under the EB-5 category who make Direct EB-5 Investments have full control over their business projects. While they generally can relinquish or pass control over to other employees or officers of the business, they will remain in control and in charge of making major decisions that affect the future of their businesses in the United States.

Obviously, Direct EB-5 Investments call for greater involvement of investors in their businesses; however, many people thrive in conditions where such hands-on efforts are required – perfectly playing the part of “active”investors. Even for those investors who are reluctant to commit to an intense involvement in their businesses, there are direct investment choices that work as passive EB-5 Investments and require fewer operating decisions while still leaving full control of the commercial enterprise in the hands of the EB-5 Investor.

FRANCHISES: The Place Where Passive and Active Investments Meet

The franchise industry is perfectly suited for Direct EB-5 Investments. Generally, investments made into franchises are available in many industries, and the benefits that come with them include popularity and public recognition, fuller disclosure requirements, and an existing customer base that offers new investors a good start on their EB-5 businesses, which is incredibly valuable in industries where the competition is high, intense, and shows no signs of slowing down.

Another valuable aspect of franchises from the perspective of EB-5 Investments is their proven history of quality and success and the existing regulations and oversight by both state and federal authorities.In comparison with regional centers, franchises in the United States are subject to more regular and rigorous governmental reviews.

In addition to governmental supervision, the franchises themselves typically perform their own audits and updates for their licensed owners, which gives each individual investor the opportunity to do a comparison of their performance against other franchisees and the industry in general. Although franchise owners are subject to internal rules and regulations established by the franchise license, EB-5 Investors who buy a franchise will retain greater control over their businesses than they would by making a passive investment in a regional center.

Working with an EB-5 Immigration Lawyer

While all of the above is true, no investment is perfect; and both passive and active EB-5 Investments come with their own lists of advantages and disadvantages. Any experienced and informed EB-5 Investor will work with qualified and experienced EB-5 Business & Immigration Lawyer to evaluate as many realistic options for EB-5 Investments as possible.

To get in touch with a skilled and experienced Florida Business & Immigration Lawyer to help you with your EB-5 application,contact me today! Call me at (305) 921-0440 or send me an email to Romy@JFLawFirm.com to get started on your road towards a successful business career in the United States.

Loading...