Direct, CURATED Individual EB-5 Opportunities
As the ongoing cycle of expiration/renewal of the EB-5 Regional Center program goes on endlessly, more and more investors ask me:
"Jose, is there ANOTHER way to get my residency through EB-5?"
The answer is "yes", but with a big caveat: if you think you've seen dangerous Regional Center "opportunities", wait till you look at some of the direct investment scams being peddled out there! Although a lot of EB-5 newcomers are peddling so called "direct EB-5" - where there is no regional center, no economic reports, and no complicated project pre-adjudication by USCIS -- as some brilliant new invention they created, nothing could be further from the truth. The fact of the matter is that Direct EB-5 is the original form of EB-5...I was filing such cases even before the Regional Center program had been created in the early 1990's!
In Direct EB-5, there is no complex calculation of indirect and induced job creation; the ONLY jobs that count are full time, direct jobs created at the EB-5 business, as in "10 full time new jobs per investor". Direct EB-5 can be individual or a pooled investment, where multiple investors come together to make a bigger collective investment and create at least 10 jobs for each of them. Sounds great, right? Here's the catch: the mandatory "risk" element required by EB-5 law becomes infinitely more complicated when it involves the creation of a brand new "bricks and mortar" business versus introducing EB-5 capital as part of the capital stack of a well-managed and existing enterprise run by a proven Regional Center with a reputation to protect. Regional Center projects crash and burn, as we all know; poorly structured Direct EB-5 projects can implode overnight.
Since AVS Regional Center was approved by USCIS in 2011, I have steered prospective investors away from Direct EB-5 investments for one simple reason: I've never seen one I'd invest in myself. The ones I have seen over the years - and I am not saying I've seen everything that's out there - have ranged from well-intended but extremely shaking startups to outright theivery where EB-5 investors unwittingly cash out the U.S. operator of what is a clearly failing business. No permanent residency, no recovery of investment.
After years of EB-5 skepticism, what is it that drove me to finally file a Regional Center application in 2010? The trust and relationship I had cultivated over the years with the Forbes 400 group for which I would exclusively be raising EB-5 funds. I knew back then what these folks have proven over the years: AVS raises money for the best players in the EB-5 game, and our investors could not be more fully protected. As we wind up the last of our current offerings for the group, however, we face a long waiting time before USCIS approves their next Regional Center project...leaving me with no EB-5 limited partnership slots for AVS' steady stream of prospective investors. As we wait for project approval -- months...years?? -- and after much consideration, I am once again turning to Direct EB-5 as a solution for our EB-5 investors, subject to certain rules:
- AVS will only offer pooled direct investment EB-5 opportunities, where a small group of 4-10 investors collectively invests in a job-creating enterprise with high direct job creation. No one-shot franchise deals. (According to the U.S. Small Business Administration, less than 50% of new U.S. business survive their first 5 years of operation.)
- AVS will only offer Direct EB-5 for proven, vetted successful projects which are expanding, no new "concepts".
- AVS will only introduce investors to Direct EB-5 projects in which I am personally invested and a stakeholder.
After all, if I'm not willing to invest in a business, then why on earth should I entrust the future of an EB-5 investor family to it?
Soon, AVS will be introducing a handful of personally curated, historically-proven Direct EB-5 projects in which we have the same level of trust and confidence that we have enjoyed with our Regional Center projects. Nothing else will do for AVS investors!
May 23, 2022