*This content is brought to you by CMB EB-5 Regional Centers
By Matthew Hogan*
EB-5 is one of the most important decisions a prospective immigrant investor will ever make for themselves and the future of their family, and today’s EB-5 marketplace can be confusing. Fortunately, there are resources available that can aid an investor in their due diligence process.
Over the years, many regional centers, in particular, newly designated and inexperienced regional centers – without established track records and with little or no EB-5 experience – attracted investors using less than ethical and sometimes non-program-compliant marketing tactics.
USCIS approved?
One such marketing ploy to be aware of is when an EB-5 regional center markets a project as being “Pre-Approved.” These regional centers communicate the misconception that the USCIS has preferred their project over other projects in the market. This tactic attracted unwary EB-5 investors without the regional centers revealing truth behind an I-924 approval or what an approved I-924 Exemplar means.
The idea of an I-924 Exemplar filing was set forth by the USCIS in December 2009. The USCIS rationale was by evaluating the business plan for an EB-5 project prior to I-526 petitions filed, if the plan was deemed sufficient to meet EB-5 requirements, the USCIS would provide “deference” to I-526 petitions filed using the same business plan and documents.
In turn, this process would not require the USCIS to reevaluate the business plan for each investor’s I-526 petition and it could instead focus resources on the applicant’s personal and source of funds information.
With that historic frame of reference in mind, a prospective EB-5 investor should ask: “What does an Exemplar approval really mean, and what benefit does it really provide?” The answer is simple: it means that the Exemplar submitted met the requirements of the EB-5 program and was approvable at the time of its filing. The term Pre-Approved does NOT mean guaranteed EB-5 success.
The USCIS website reflects that an I-924 can take several years to process. Hence, the approval of an Exemplar I-924 is likely to be based upon information that may no longer be relevant when an investor files their I-526 petition, such as key components of business plans used to evaluate projects including feasibility studies, financial, economic and pro forma projections.
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In order for deference to be provided, the facts of each I-526 submission would need to be substantially similar in all material respects to that of the petition submitted in the Exemplar stage. Because these two submissions could take place several years apart, it would be next to impossible to ensure that nothing material, including USCIS regulations or policy, would have changed.
Therefore, if the underlying facts of the business plan change from the time of Exemplar approval to filing of a subsequent I-526 petition by an investor, it is very possible that deference may not apply in a “Pre-approved” project.
New regulatory reforms to the EB-5 visa program became effective on November 21, 2019. What is currently unknown is how USCIS will apply deference, if even applicable, to I-526 petitions filed after November 21, 2019 in projects that received Exemplar or I-526 approval before November 21, 2019. This should be even more concerning to investors receiving promises of expedited processing based upon approval of an I-924 filed and approved prior to November 21, 2019.
What is clear is that investors and their attorneys must perform proper due diligence. These types of risks should be openly disclosed to investors. If these risks are not discussed and transparently communicated, one could probably question the ethics of the regional center or any agent working with the regional center. What’s more, investors and their representatives must not lose sight of their EB-5 goals: receiving their green card and receiving the return of their capital investment.
Digging deeper, if there is any benefit in an Exemplar, it should provide a roadmap for each investor’s subsequent I-526 petition to follow. Through years of experience and the adjudication and approval of over 4,800 investors’ I-526 petitions, CMB Regional Centers has already built such a roadmap. Each CMB EB-5 partnership follows the same basic structure, which includes using a loan-model EB-5 offering and EB-5 job creation determined by calculating indirect and induced jobs.
CMB’s first regional center, CMB Export was originally designated in 1997. With over 20 years of experience, CMB is one of the oldest and most successful regional center operators in the EB-5 Industry. What sets CMB apart from all other regional centers is its track record.
The USCIS has reviewed and approved investor petitions related to CMB EB-5 projects at both the I-526 and I-829 stage time and time again. CMB has assisted over 5,700 individual investors with their EB-5 immigration pursuits. CMB’s EB-5 partnerships continue to maintain a 100% approval rate at both the I-526 and I-829 stages with return of capital to investors in over 30 partnerships. Very few regional centers in the industry have any track record at all, let-alone a consistent and continued track record of success.
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If you would like to learn more about the EB-5 Investor Visa, obtaining permanent residency or CMB’s current EB-5 offerings, please contact us here to schedule a free initial consultation with a CMB Investor Relations Manager.
CMB engages Prevail Capital, LLC, a broker-dealer registered with the SEC and a member of FINRA and SIPC, to be the administrative placement agent for all CMB EB-5 partnerships.
- Matthew Hogan is Vice President of Project Development at CMB Regional Centers.
