Invest in US while it’s cheaper

Indians face clampdown in several visa categories under the US administration of Donald Trump but the EB-5 visa, which allows Indians to invest $500,000 (Rs 3.35 crore) in America to earn its coveted Green Card (legal permanent residency), is one of the exceptions.

EB-5, a no-strings-attached visa that requires no employer sponsorship or family support, has been under review for quite some time. The Indian investors have waited anxiously for the US-proposed changes that include increasing the minimum limit of investment. The US government’s office of management and budget (OMB) has notified recently that the formal and final announcement about investment rules for EB-5 will come out in August.

As TOI had reported earlier, the demand for EB-5 visas has grown rapidly in the past year. This year, India is likely to reach its annual limit of 700 for the first time. Since October 2017 (EB-5’s fiscal year runs from October 2017 to September 2018), the US has received more than 500 applications already. In the previous financial year, Indian nationals were issued 174 EB-5 visas, an increase of 17% from the preceding year.

In January 2017, the US department of homeland security (DHS) proposed to amend regulations governing the EB-5 immigrant investor classification. Under the EB-5 programme, individuals become eligible to apply for lawful permanent residence in the

United States

if they make the necessary investment in an American commercial enterprise and create (or, in certain circumstances, preserve) 10 permanent full-time jobs for qualified US workers.

Faster PR route

EB-5 investment firm US Freedom Capital’s chief investment officer David Gunderson told TOI: “The expected increase in the investment amount is long past due. Other first-world countries such as the UK and Australia price their investor PRs at $2.5 million (Rs 16.75 crore) and up. By comparison, the EB5 visa is priced attractively to allow our investors and their future generations access to the world’s greatest economy. While the new investment minimum will not be announced until August, we expect it to be in the range of $900,000 (Rs 6.03 crore) to $1.35 million (Rs 9.05 crore). Despite this, we expect the number of applications from India to continue to grow, since the EB-5 visa offers more speed and freedom than other US PR paths.”

Gunderson also says: “With the increased investment minimum, we expect the nature of EB5 investments to change. EB5 offerings requiring hundreds or thousands of investors become even more risky, where even today we continue to see mega projects unable to close out their offerings due to collapse of the Chinese EB5 market. Savvy investors will continue to focus on small projects, with smaller investor pools, regional center investment, and a quicker turnover of the investment.”

Judicial test

Middle East, CanAm Investor Services’ India vice-president Abhinav Lohia said: “The proposed changes in regulations may come into effect by August-end, but will have to stand the test of judiciary, as industry stakeholders will challenge those. Any delays in implementing the regulations will most likely be caused by judicial interference. That said, it is highly likely that the US Congress will vote on the change in the EB-5 law on or before September 30.”

Take family along

EB-5 investor Nilesh Shah said: “I am an investments and finance professional who was keen to explore opportunities in the US. Obtaining legal permanent residency through the immigrant investor green card programme seemed a viable option for the freedom to choose my career path in America. I was delighted with the speed, simplicity, and ease of obtaining the green card through the EB-5 process. I have received legal permanent status in the US and so has my family, thanks to EB-5.”

What may change for investor

Increase in minimum investment from $500,000 (Rs 3.35 crore) to between $900,000 (Rs 6.03 crore) and $1.35 million (Rs 9.05 crore). Benefits remain the same, only the investment doubles

Challenges in complying with Foreign Exchange Management Act (FEMA) and Reserve Bank of India’s Liberalised Remittance Scheme (LRS), which limit flight of investment to $250,000 per person per fiscal. Increased investment amount will four to six members of the family to contribute