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General EB-5 Questions

EB-5 Due Diligence Questions

Investment Structure

What is an EB-5 Limited Partnership?

A limited partnership combines corporate limited liability with partnership taxation and consists of a general partner and one or more limited partners. A CMB affiliate forms each limited partnership to act as the "new commercial enterprise" under the EB-5 program. The limited partnership agreement details, among other things, the rights and powers of the limited partners and general partner, percentages of ownership, how distributions of profits can occur, and the compensation paid to the general partner. The general partner manages the day to day operations of the limited partnership. The limited partners have limited duties and decision making powers within the partnership,  but are liable only for the amount of their investment.

How safe is my EB-5 investment?

The EB-5 program requires that the EB-5 investor make an "at-risk" investment, which means there must be a risk of loss and a chance for gain. CMB has attempted to structure our EB-5 partnerships to mitigate risk given the legal requirement that the EB-5 investments be truly “at-risk.” This is why CMB enters into loan agreements with private/public partnerships or private entities that have demonstrated the capacity to payback our loans and an ability to service the debt. CMB requires its borrowers to identify sources of revenue for the repayment of the loan. We also require many different types of collateral for the loans, such as membership interest pledges, payment guarantees, and intercreditor agreements to secure repayment of the loans.

Is my EB-5 investment guaranteed?

The answer is no, because the EB-5 program requires that the investor make an “at risk” investment, in which the investor cannot receive any guarantees of repayment or any redemption rights, and there must be a risk of loss and a chance for gain. CMB goes to great lengths to try to minimize or mitigate risk in our EB-5 offerings, while still maintaining the at-risk requirement. Prospective EB-5 investors should be extremely cautious of any regional center that indicates the individual investor's EB-5 investment is guaranteed, as that is prohibited and would result in a denial of the petitioner’s immigration petition.

What management obligations are required of the investor to participate in the investment?

Under the EB-5 program, the investor must be “active” in the management of the EB-5 investment, which means the investor must, in some form, engage in the management of the new commercial enterprise, either through day-to-day managerial control or through policy formulation. The EB-5 program specifically states that an investor will qualify as “active” if they are a “limited partner” and the limited partnership agreement provides the investor with certain rights, powers, and duties normally granted to limited partners under the Uniform Limited Partnership Act. This allows the investor limited participation in the EB-5 partnership's day to day activities. Additionally, this structure allows the investor to live where he or she pleases without any obligation to actively manage the EB-5 investment. Most importantly, the limited partner is only liable to the partnership to the extent of their investment. This structure protects the investor, allows limited participation, and is accepted by the USCIS.

Once I invest in a CMB EB-5 partnership what do I receive for my investment?

Each investor who is admitted to the CMB Limited Partnership becomes a limited partner with all the rights granted by the Limited Partnership Agreement and by the various State and Federal Laws. The investor is a percentage owner of the partnership and a capital account is established for each limited partner. The limited partner is entitled to a percentage of the profits of the Limited Partnership as detailed in the Limited Partnership Agreement. Additionally, each Limited Partner is granted access to the secure portion of CMB’s website where they can monitor the activities of the partnership and their own individual capital account.

What is the likelihood of an EB-5 investor receiving a return of their capital?

EB-5 investments are required to be “at risk” investments. No regional center is allowed to guarantee the return of investors’ funds. On the other hand there is no requirement that the funds be invested foolishly. CMB EB-5 partnerships enter into loan agreement with government entities, public private partnerships or with private developers whereby each borrower has identified a number of sources of revenue and collateral pledges as ways to repay the loans. CMB structures investments that are compliant with the rules and guidelines of the USCIS that also afford the investor a likelihood of a return of their capital.

General EB-5 Questions

Is the EB-5 Green Card "guaranteed" by participating in this investment program?

A green card is not guaranteed through participation in the EB-5 program, as no one can ever guarantee the outcome of any immigration petition. The EB-5 program involves both an investment and an immigration program. You cannot be guaranteed any particular outcome regarding the investment or your immigration status. This is why a very careful analysis of the merits of each EB-5 offering as well as the claims of success made by regional centers and other EB-5 practitioners is very important when performing your due diligence.

Will CMB help me with filing my EB-5 immigration petition?

CMB Regional Centers are not immigration attorneys and therefore we do not file any immigration petitions; however, CMB will work hand in hand with your chosen immigration attorney. CMB requires all investors to secure their own independent legal counsel to file the immigration paperwork and complete the applications for an EB-5 investor visa. CMB is responsible for the business side of this complex process and will assist your counsel in providing supporting documentation on the EB-5 investment and the regional center.

Where can I find a copy of the relevant EB-5 law and regulations to review?

The USCIS website (www.uscis.gov/eb-5) has information about the EB-5 program laws, regulations, and policy.

What is meant by the requirement that the investor’s assets be “lawfully gained”?

Under USCIS regulations, the investor must demonstrate that his assets were gained in a lawful manner. This requires the investor to prove his investment funds were obtained through lawful business, salary, investments, property sales, inheritance, gift, loan, or other lawful means.

What is an I-526E Petition?

The I-526E Immigrant Petition by Regional Center Investor is the first step in the EB-5 process. It is filed after an EB-5 investor funds their investment. The petition is adjudicated by the USCIS (the United States Citizenship and Immigration Services) to determine that the investment is likely to meet all EB-5 requirements, which include the at-risk investment and the projected creation of 10 full-time jobs.

When will I be able to move to the United States?

An EB-5 investor is eligible to enter the United States to begin a period of conditional permanent residency once their I-526E is approved, a visa becomes available (if the investor is from a country affected by visa retrogression) and they go through a consular interview process or adjustment of status if already located in the U.S. on another type of non-immigrant visa.

Can I apply for EB-5 if I am already in the United States?

Investors already in the U.S. on a non-immigrant visa are eligible to apply for EB-5. When they receive an I-526E approval they will apply for an adjustment of status, rather than a consular interview.

What family members will be eligible to immigrate under an EB-5 visa?

A successful EB-5 investment grants permanent residency to the primary investor, their spouse, and any unmarried children under the age of 21.

What is visa retrogression?

Under existing EB-5 rules, approximately 10,000 visas are allocated to the program each year. If all 10,000 visas are used, each country is capped at a maximum of 7% of the total. As a result, countries with a large number of applicants may see longer wait times to begin their period of conditional permanent residency. Currently, China is the only country affected by retrogression. The USCIS posts quarterly updates on this topic.

What is an I-829 petition?

An I-829 petition is a final petition filed by the EB-5 investor with the USCIS. This petition requests the USCIS to remove the conditions on the investor’s permanent residency visa (green card). In this petition, the investor provides the USCIS with proof that the at-risk capital investment was made and sustained through the two-year period of conditional permanent residency, and that the required 10 jobs had been created from the investment.

Can I become a U.S. citizen through EB-5?

Permanent green card holders are allowed to apply for U.S. citizenship after 5 years.

Are investors from certain countries disqualified from the EB-5 program?

The program is open to virtually all countries, but there are very few exceptions; I.E, North Korea. Feel free to contact us if you have a concern about eligibility.

Do I have to live or work in a certain part of the United States?

You are allowed the freedom to work and live anywhere you choose in the United States under the EB-5 program.

What are the primary requirements for an EB-5 investment?

An EB-5 investment must meet the minimum required investment amount, be an ‘at risk’ investment with the potential for gain or loss, and create at least 10 new American jobs.  

Does an EB-5 visa need to be renewed?

The permanent green card, once approved, is good for 10 year periods that need a simple renewal. However, you are allowed to apply for citizenship 5 years after receiving permanent residency, eliminating the need for renewals.

Can I travel abroad during my conditional residency stage?

Yes, you are allowed to travel abroad during your conditional residency stage. You are however required to reside in the United States for a minimum amount of time each year, so please consult with your immigration attorney.

Do I have to live or work in a certain part of the United States?

Green card holders may live or work anywhere in the United States.

Can I use gifted funds from a family member to apply for an EB-5 Visa?

Yes, you may be able to use gifted funds for an EB-5 investment, but you need to consult with your immigration attorney since you will need to provide evidence of the source and path of funds to file your I-526E petition with the USCIS.

What does it mean that an EB-5 investment must be ‘at risk’?

The EB-5 program requires that the EB-5 investor make an “at-risk” investment, which means there must be a risk of loss and a chance for gain. The investment must not contain any right of redemption of capital, meaning an investor must not have any payment guarantees or the ability to redeem their investment amount at their discretion.
Just because the EB-5 program requires that the investment be “at-risk” does not mean it has to be “risky.” Investors should perform thorough due diligence during their project selection with the main considerations being the likelihood of obtaining a green card and a return of their capital.

Do I need to be able to speak English to qualify for an EB-5 Visa?

No, the EB-5 program does not include any language requirements.

What is a Regional Center?

A Regional Center is an entity, public or private, in the United States designated by the USCIS to promote economic growth through the EB-5 immigrant investor program.

What is the total cost of an EB-5 Visa?

Beyond the minimum EB-5 investment, investors should be prepared to pay a syndication price for a subscription to a CMB EB-5 partnership, immigration attorney fees, and filing fees to submit their immigration petitions to the USCIS.

Should I hire my own immigration attorney?

CMB requires that all investors select their own immigration attorney to represent them in their immigration pursuit. While some Regional Centers have agreements with immigration attorneys ‘package’ their services with the investment, we see this as a serious conflict of interest. CMB will provide your immigration attorney with all necessary information regarding the investment and job creation.

Job Creation

What precautions are taken to monitor job creation by CMB?

CMB EB-5 partnerships rely on model derived job creation only and we have proven in each partnership that has been reviewed by the USCIS to date that model derived jobs are created at the time monies are spent. Each individual project has a time frame for completion. The time frames fall within the period of time for job creation required by the USCIS. Some of our partnerships have fund control agreements whereby funds are controlled and released as specific bills are requested to be paid. Additionally, we make periodic trips to each project site and we get regular project status reports from each borrower, which are posted in the investor section of our website. CMB builds in the loan agreement with each borrower that failure to produce documents of spending is a default under the loan agreement.

EB-5 Due Diligence Questions

Questions to ask all Regional Centers

Safety and Security:
- How many I-526/I-526E approvals do your EB-5 investors have?
- Have any of your EB-5 investors ever received an I-526/I-526E denial? If so, for what kind of reasons?
How many I-829 approvals do your EB-5 Investors have?
- Have any of your EB-5 investors ever received an I-829 denial? If so, for what kind of reasons?
- Have any of your EB-5 partnerships successfully returned capital to your EB-5 investors?  If so, how many and which partnerships?
- Are your track record statistics (I-526 approvals, I-829 approvals, return of capital) professionally audited by a third-party?
Job Creation:
- What is the methodology that is being used for calculating job creation?
- Are the claimed jobs direct or indirect jobs or a combination of both? How long will construction of the project take?
- Has the developer provided a completion guarantee on the project?
- How is job creation allocated among the EB-5 investors?
Regional Center Operations: 
-  Do you provide my immigration attorney with a template for my I-526E and I-829 petitions?
Does your team actively monitor the status of the project during development for construction compliance, job creation, ability to service debt, etc.?
-  Do you provide regular reporting to EB-5 investors such as project status updates, K-1s and capital account statements?
- Are the new commercial enterprise’s finances professionally audited by a third-party?
- Is each EB-5 investor allowed to see the financial records of the new commercial enterprise?
- Who is responsible for the day to day expenses of the new commercial enterprise?
- What costs will the EB-5 partnership be responsible for?
- What currently are the effects of retrogression? Does it have an effect on my investment?
Project Questions:
- Who is the developer of the project and what are their qualifications?
- Is the developer or owner of the project affiliated with the regional center? If so, what conflicts of interest does this raise?
- Has the developer ever developed an EB-5 related project before? If so, what were the results?
- Is the capital stack in place? Are all financing agreements executed?
- What position will the EB-5 funds take in the capital stack? Is this a Loan or an Equity investment?
- What is the collateral to secure the repayment of the EB-5 funds?
- What is the Borrower’s strategy to repay the EB-5 funds?
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This is not an offer to sell securities or the solicitation of an offer to purchase securities. Any offer to participate in any sponsored project may only be made pursuant to a written offering memorandum. Any sale in a sponsored project shall be evidenced by a subscription agreement executed by a foreign national and will be offered and sold, to the extent applicable, both within and outside of the United States in reliance on exemptions from registration under the securities act, state laws and the laws of jurisdictions where the offering will be made.