Regional center due diligence for EB-5 investors

USCIS designates a regional center by approving its application on Form I-956. That decision concerns the entity's eligibility to sponsor EB-5 investments. Separately, each project the center sponsors needs its own application on Form I-956F. Neither decision is an assessment of whether an investment is sound.

1. 01

   Step 1: Check the USCIS list

   Find the regional center on the USCIS list of approved regional centers (opens in a new tab), using its exact legal name.

2. 02

   Step 2: Confirm it is current

   Make sure the designation is current and that the name and details match the offering documents.

3. 03

   Step 3: Look for notices

   Check whether USCIS has published any notice of suspension or termination involving the center.

4. 04

   Step 4: Confirm the project filing

   Ask for evidence of the project's Form I-956F (opens in a new tab) status: whether it has been filed, and whether it is pending or approved.

A regional center's past projects are one of the better indicators of how it operates. Ask about each one and request evidence rather than summaries.

• Construction progress and completion of earlier projects.
• Job-creation results compared with projections.
• Any litigation or bankruptcies involving the center or its projects.
• Repayment history to earlier investors.
• Evidence that projects were completed, for example certificates of occupancy or operating records.

Where possible, rely on annual reporting, financial disclosures and regulatory records, reviewed by independent professionals, and not only on promotional materials.

Investigate the backgrounds of the people involved: the regional center's managers, the developers, the fund administrators and the promoters or marketing agents.

• Related-party transactions: deals between the regional center, the new commercial enterprise (NCE, the entity that receives investor capital) and the job-creating entity (JCE) when they share owners or managers.
• Fees: whether fees appear excessive or are paid to affiliates of the center or developer.
• Enforcement history: any regulatory or enforcement actions against the center or its principals.

Read the private placement memorandum (PPM), subscription agreement and any fund-management arrangements closely. You can check whether people selling the offering are registered on FINRA BrokerCheck (opens in a new tab).

Under the EB-5 Reform and Integrity Act of 2022, USCIS must audit each regional center at least once every five years and may impose sanctions, including suspension or termination of the center's designation. Refusing or impeding an audit can itself lead to termination.

Asking a regional center whether it is current on its Form I-956G filings, and whether it has been audited, is a reasonable part of due diligence.

• Work through how to evaluate an EB-5 project and the project due diligence questions.
• Compare regional center and direct investment if you are still choosing a path.
• Read about the EB-5 Reform and Integrity Act of 2022, which created many of the oversight rules described here.
• Ask a qualified U.S. immigration attorney and a licensed securities professional, both independent of the offering, to review the regional center and project. You can request a consultation to be connected with qualified professionals.