Investing through our Regional Center offers the potential EB-5 investor a most expeditious and relatively safe means for a successful EB-5 investor visa. We believe adjudication of each CMB EB-5 investment is easily understood since all CMB partnerships from the beginning until present follow the same transparent and simple structure. U.S. Citizenship and Immigration Service (USCIS) adjudicators have reviewed many CMB EB-5 partnerships and in each submission the various project structures. CMB partnerships contain the same approval elements as the past 1,600 CMB approved I-526 submissions (updated on October 3, 2014). CMB EB-5 investments contain the following elements that you should consider of all Regional Centers when choosing a Regional Center for your EB-5 investment path to the United States.
Look for an Already Proven Approved Job Methodology – EB-5 Investors should be very interested in the details of any EB-5 investment project. The most important element that determines an EB-5 investor’s success in obtaining the permanent EB-5 visa (green card) is the ability to prove that ten new American qualifying jobs have been created by that EB-5 investor’s investment. The CMB approach combines EB-5 capital with non EB-5 capital. This combination of capital, creating a large overall pool of capital for project construction multiplies the job creation impact of the EB-5 investor’s funds. CMB EB-5 investment partnerships strive to create many more new American jobs than are required by statute. Regional Centers benefit from being allowed to utilize both direct and indirect job creation to support the EB-5 investor’s requirement to create at least ten new American jobs. According to USCIS, lack of proof of job creation is the leading cause of denial for EB-5 investor petitions under the EB-5 program. Typically, by the time EB-5 investors learn that there is a problem with the job creation methodology utilized by the Regional Center they have chosen, it is too late to rectify the situation. The EB-5 investors are already in the investment irrevocably and they may lose their permanent visa altogether. Proof of ten new American jobs for every member of the EB-5 investment should be one of the first considerations of every EB-5 investor!
Look for a Defined Exit Strategy – The loan term in CMB partnerships is typically six years from the time the final investor funds are placed. Once all partnership loans are repaid, the investors simply vote to liquidate the partnership. There is nothing to sell; CMB EB-5 investor partners in our partnerships are not dependent upon any segment of the economy to do well, such as real estate, travel, construction, entertainment, or the farm market for the return or preservation of their original capital. In a loan model we look to the strength of the borrower, the ability to service debt as well as repay the loan and the collateral pledged by our borrower.
Look for a Low-Risk Safe EB-5 Investment – In terms of the reliability for return of original capital, we believe CMB partnerships are structured as one of the “most conservative of all” EB-5 Regional Center investments. Many previous CMB partnerships have the pledge of governmental agencies, or the military base master developer. In the case of a private entity we look for several factors for return of the original investment as well as possible project completion guarantees, the likelihood all funds will be spent, and various collateral obligations. Frequently, CMB EB-5 investments are secured by a combination of security interests in the investment property, cash flows of the operations, and membership interests within the entities. Many times we require completion guarantees on the project to ensure project spending.
Look for Transparency of EB-5 Investment – EB-5 Investors in CMB Partnerships have a right to access partnership records. Government entity financial records as a matter of public record are also available to the general public, if applicable. Thus our EB-5 investors have insight into the financial records of the partnership and the target EB-5 investment.
Look for Independent Third-Party Audits
Does the Regional Center you are considering have a Cap on Business Expenses – Day-to-day CMB partnership expenses are capped. This protects the EB-5 investment from the Regional Center charging unwarranted fees. In a CMB partnership each EB-5 investor is projected to experience only a very modest return on their EB-5 investment. The reasons behind this are simple and logical. Traditionally we make low interest rate loans relative to the market place with high profile borrowers. The interest the EB-5 partnerships receive is structured to cover all day to day expenses with the exception of any “extraordinary” expenses, making the prediction of profitability of the new commercial enterprise somewhat predictable if the partnership follows the term outlined in the loan agreement. However, the General Partner compensation is based upon the foreign national investment amount and independent of any interest earned by the partnership.
Look for a Targeted Employment Area backed by statistical data, not just a state letter – Any $500,000 CMB EB-5 Partnership will contain real proof that the EB-5 investment qualifies as a Targeted Employment Area. CMB accomplishes these designations without data manipulation, which would risk denial for our client’s petitions at the I-829. We firmly believe the USCIS should deny a project and its investors at the I-829 stage if it determines the Regional Center manipulated the data to qualify for the lower threshold of $500,000. CMB performs its own analysis and provides this analysis as well as any state TEA letters to the USCIS within the business plan of an I-526 petition.
Look for an EB-5 investment with limited Day-to-Day Management – Investors in CMB Regional Center partnerships have no day-to-day management responsibilities because of CMB’s limited partnership structure. The EB-5 investor management participation requirement is satisfied within its limited partnership structure. EB-5 Investors have limited duties; one duty is related to voting such as to liquidate the partnership after all investment loans have been repaid and other obligations as set forth by the Limited Partnership Agreement.
Insure the Regional Center has authorization geographically – CMB EB-5 Regional Centers are approved to operate as a Regional Center in California, Nevada, Ohio, Florida, Georgia, Illinois, Pennsylvania, and Texas. CMB has applied for Regional Center status in Colorado and North Dakota. CMB has operated with Service Agreements in Tennessee and North Dakota.
Look for a Regional Center with Overall Simplicity of the Program – CMB EB-5 partnerships invest EB-5 funds through a loan agreement with a highly qualified borrower. Daily costs are fixed. There is nothing to sell, rent, or actively manage. The loan return is fixed and the principal has some form of collateralization. The job creation methodology is transparent and USCIS-approved at the I-526 and at the I-829 petition level for many previous EB-5 investors.
Look for experience – Navigating through the EB-5 process is difficult. Insure your choice of a Regional Center is based upon past and current performance. CMB believes the EB-5 “investment” program is not a traditional investment, rather a jobs creation program. Why? We have never had an EB-5 investor say they are doing this for a return on or of investment. Every CMB EB-5 investor wants the permanent visa, their original investment into the new commercial enterprise returned and any amount of return on investment is their last consideration. It is not a coincidence that only one unit is sold to one person. Anyone involved with the EB-5 “investment” program only participates because of the permanent visa not the “investment” opportunity. Every EB-5 investor should think backwards and put their efforts and questions on proof of job creation, for without the requisite jobs permanent residency is lost and the process will cost much more than their original EB-5 investment. Additionally, the manipulation of TEA data is becoming common place. Why is there only one $1 million program? Is the entire United States a TEA? Yes, there are Regional Centers that do not qualify for TEA status yet only have $500,000 investments. Please do your due diligence. Do not become a statistic of failure because of TEA manipulated data.