The Hidden Side of EB-5 · Episode 03

Conflicts of interest

EB-5 Conflict of Interest: Who Is Really Accountable for Your Investment Capital?

An EB-5 conflict of interest is not just an ethical issue — it becomes a direct legal risk the moment a crisis hits.

The question that matters is not "whose name is on the documents" but "who can halt disbursement when it becomes necessary?" This article helps you identify conflicts of interest between the regional center (RC) and the developer — including those hidden behind separate legal entities.

9-minute read Updated June 2026
Nghe Podcast Read the full article
The Hidden Side of EB-5 · Episode 03 — Your EB-5 investment capital: who is really accountable?
Episode 03

EB-5 conflicts of interest

The Hidden Side of EB-5
08:28
RC = developer
Acting as both player and referee — when the regional center and the developer are one and the same, no one is on the investor's side
0
COVID-era projects IMM Group was involved in ran into difficulty — a costly lesson in conflicts of interest, with legal action still being pursued today
Who?
"Who has the authority to halt disbursement if the developer breaches its commitments?" — if the answer is "no one," that is a red flag
Hide
A new trend: conflicts hidden behind separate legal entities and managed by relatives — more sophisticated and harder to detect

01 · Definition

What is a conflict of interest in EB-5?

In an EB-5 structure, the regional center (RC) oversees and protects investors' interests — it has the right and the responsibility to halt disbursement if the developer fails to meet its commitments. A conflict of interest arises when the regional center and the developer are the same organization or are controlled by the same group of people; the regional center then loses its independence, and no one truly stands on the investor's side when a dispute arises.

02 · Legal entity structure

Three entities and who really controls the flow of funds

Investor capital passes through three separate entities. To know who is accountable, you need to understand the role of each entity — and who stands behind it.

RC — Regional Center

A regional center designated by USCIS to manage EB-5 capital. A regional center designation does not certify the quality of any specific project — its core role is oversight and investor protection.

NCE — New Commercial Enterprise

A newly formed entity that receives capital from EB-5 investors. This is the entity that holds the money — the most important one to scrutinize in your due diligence.

JCE — Job-Creating Entity

The job-creating entity, which receives capital from the NCE to carry out the project. It is often the developer itself — where conflicts of interest most readily arise.

03 · Flow of funds

Capital passes through a single control point

Your capital does not go straight to the project. Between the NCE and the JCE sits a control valve — and whoever holds that valve determines whether investors are protected.

Step 1
Investors contribute capital
EB-5 capital is transferred into the NCE
Step 2
The NCE holds the funds
The entity that receives and holds investor capital
Control point
Control rights
Who can halt disbursement?
Only an independent regional center has the incentive to halt disbursement when the developer breaches its commitments
Outcome
JCE / developer
Receives capital to carry out the project and create jobs

04 · Two structures

Independent regional center vs. RC = developer: where the conflict lies

Same diagram, two different ownership structures — and two very different outcomes when a crisis hits.

Independent regional center
Protects investors · Can halt disbursement · Objective reportingBáo cáo khách quan
RC = developer
No one protects investors · No incentive to halt disbursement · Reporting may be skewed
Where the conflict lies
Acting as both player and referee — a regional center cannot represent both sides

05 · Key takeaway

The right question: "Who can halt disbursement when it becomes necessary?"

The right questions to ask
Who is the ultimate beneficial owner of the regional center, the NCE, and the JCE?
Who has the authority to halt disbursement if the developer breaches its commitments?
Is the regional center genuinely independent of the developer — including through family ties or long-standing business partnerships?
Over the past 5 years, has the regional center ever exercised its investor-protection powers in a dispute?
Warning signs
The regional center and the developer are the same organization or are controlled by the same group of people.
No one has the authority or the incentive to halt disbursement when the project stalls.
The regional center and the developer "do not share a name" but are run by relatives or long-standing partners — hidden behind separate legal entities.
Relying only on the names on the documents, without requesting a list of the beneficial owners of both parties.
Don't stop at "whose name is on it"

When choosing an EB-5 project, ask: who actually manages the capital in the NCE, who has the authority to halt disbursement when necessary, and is the regional center genuinely independent of the developer?

Part 02
In-depth article

U.S. investor immigration · EB-5

EB-5 conflict of interest: when the regional center and the developer are one entity

Thomas Lee left his former firm for one reason: he could not keep working in an environment where the regional center and the developer were on the same side — no one can represent investors while also serving the developer's interests. He shares that experience in this podcast episode.

What does a conflict of interest mean in the EB-5 context?

In an EB-5 structure, the regional center (RC) is responsible for oversight and for protecting investors' interests. The regional center has the right — and the responsibility — to halt disbursement if the developer fails to meet its commitments.

A conflict of interest arises when the regional center and the developer are the same organization or are controlled by the same group of people. The regional center then loses its independence — no one genuinely stands on the investor's side when a dispute arises.

Criteria Independent regional center RC = developer
Who protects investors?The regional center has both the right and the responsibilityNo one
Halting disbursement when neededAble to do soNo incentive to act
Transparent reportingIndependent and objectiveMay be skewed
When a crisis hitsInvestors have someone in their cornerInvestors are on their own

Lessons from IMM Group: 2 projects that struggled during COVID

Tony Tinh speaks candidly: IMM Group has supported investors in 2 projects affected by COVID where the regional center–developer structure was not sufficiently independent. As a result, when the projects stalled, no one had sufficient authority or incentive to step in and protect investors' interests.

"It was an extremely costly lesson for us." — Tony Tinh. That is also why asking about conflicts of interest is never a wasted question.

Conflicts of interest are becoming increasingly sophisticated

According to Tony, the EB-5 market is now seeing a new form of conflict of interest: the regional center and the developer no longer share a name, but are controlled by people linked through family ties or long-standing business partnerships, hidden behind separate legal entities.

To detect this, investors need to ask for a list of the ultimate beneficial owners of both the regional center and the developer — not just the names on the documents.

"The most important question is still: who actually manages the capital, and who has the authority to halt disbursement when necessary?" — Alex Tuan Anh, IMM Group

3 questions you must ask

  • Who is the ultimate beneficial owner of the regional center? Of the NCE? Of the JCE?
  • Who has the authority to halt disbursement if the developer breaches its commitments?
  • Over the past 5 years, has this regional center ever exercised its investor-protection powers in a dispute?

Conclusion

Not every conflict of interest is plainly visible. The job of the investor — or the advisory firm representing them — is to ask the right questions, read the right documents, and look beyond the names on the surface.

Frequently asked questions

Quick answers on EB-5 conflicts of interest

A regional center is an organization designated by USCIS that is responsible for overseeing the project and protecting investors' interests. A regional center's independence from the developer is an important condition for transparency.

When the regional center and the developer are one and the same, no one has an independent incentive to protect investors. If the project runs into trouble, the regional center will not halt disbursement, because doing so would work against its own interests.

Ask to see the list of beneficial owners of the regional center, the NCE, and the developer. Check for family relationships and business partnerships among the management teams.

The EB-5 Reform and Integrity Act of 2022 (RIA) strengthened transparency and independence requirements. Even so, detecting sophisticated conflicts of interest still requires investors to carry out their own due diligence.

IMM Group gives priority to projects where the regional center has clear independence mechanisms. The lessons from the 2 COVID-era projects have become an important due diligence criterion in IMM Group's process.

The Hidden Side of EB-5 · 7 episodes

Continue the series

The Hidden Side of EB-5 · Episode 01 — EB-5 partial payment Episode 01 10:24
Partial EB-5 investment: paying part now and the rest later — is it lawful?
9-minute read WATCH EPISODE 1
The Hidden Side of EB-5 · Episode 02 — Borrowing to invest in EB-5 Episode 02 11:08
Borrowing to fund an EB-5 investment: will USCIS accept it?
8-minute read WATCH EPISODE 2
The Hidden Side of EB-5 · Episode 04 — Does the EB-5 regional center really matter? Episode 04 11:02
Does the EB-5 regional center really matter?
8-minute read WATCH EPISODE 4
The Hidden Side of EB-5 · Episode 05 — Where EB-5 capital sits in the capital stack Episode 05 05:21
The EB-5 Capital Stack: Where Does Your Investment Sit in the Project?
6-minute read WATCH EPISODE 5
The Hidden Side of EB-5 · Episode 06 — Why capable people still choose the wrong EB-5 project Episode 6 12:20
Why do capable people still choose the wrong company or the wrong EB-5 project?
10-minute read WATCH EPISODE 6
The Hidden Side of EB-5 · Episode 07 — Admin fee waived to US$0 Episode 07 09:05
Admin fee cut to US$0: genuinely attractive, or cause for caution?
8-minute read WATCH EPISODE 7
Watch the full podcast
The Hidden Side of EB-5 · Episode 03
EB-5 conflicts of interest
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