India is one of the world’s most populous countries, second only to China, with 1.252 billion citizens. And as the South Asian nation has become a key player economically, many of its countrymen are reaping the profits; Credit Suisse reports there are 182,000 “dollar millionaires,” and the 2013 Wealth-X and UBS Billionaire Census says Indians accounted for 103 of the world’s 2,170 billionaires. With that capital, many Indians are looking for lucrative ways to invest… and that search is leading them beyond their native country, where the government closely regulates the markets. Many also are hoping to immigrate to the United States — and for them, the EB-5 visa program presents the perfect marriage of investment and opportunity.
Explaining the EB-5 Visa Program
The EB-5 visa program was created in 1990, and born of the need to stimulate the American economy using dollars from foreign investors. Foreigners put at least half a million dollars into commercial projects that create ten or more jobs for U.S. workers, and in return, are promised green cards for themselves, their spouses, and children under the age of 21. Private companies register these projects with regional centers, but EB-5 recipients are not bound to stay in the geographic location where the project exists; instead, they can reside anywhere in the country, and work where they choose. Many of these visa holders become permanent residents of the United States.
More than two decades after its inception, interest in the program is skyrocketing. At home, the recession kick-started demand for foreign investment in domestic construction projects, and wealthy foreigners were eager to meet that need. To put it into perspective, while there were merely 700 EB-5 visa recipients in 2007, by 2014, the number of recipients catapulted to 10 thousand for the first time, again meeting that threshold a year later. And though the Chinese are the largest beneficiaries of the program, Indian interest is growing.
Indian Investors and the EB-5 Visa
According to Pankaj Joshi, MD of NYSA, an investment advisory firm, “There has been an upsurge of about 150% in the applications for EB-5 visas from India over the last few years. In 2014, the number of EB-5 applications filed from India went up to 96 from 38 in 2013. The applications are mainly from HNIs and professionals such as lawyers, doctors and architects.” Joshi adds, “For parents looking to give their children a future in the US, the EB-5 program provides an opportunity where they can obtain green cards for their children even before applying to American universities.”
Why Some Investors Aren’t Participating
Despite burgeoning interest though, Rohit Kapuria of EB5 Investors Magazine says Indians aren’t participating close to levels of their Chinese counterparts, an issue that is multi-faceted. Kapuria lays out five main causes:
- Few Indians have heard of the EB-5 visa program, and do not have a network of migrant agents to relay this information
- Indian investors can choose from an array of immigration programs — not just in the U.S.
- Rich Indian citizens often aren’t looking to move
- Indian investors may be looking for a better return on investments than the Chinese
- There is a $75 thousand cap on capital outflow
On their desire to remain in India, Kapuria says, “Their apparent rationale is that they enjoy a standard of luxury and status in their home country that far outweighs what they might be able to afford in the United States. There may also be a generalized reluctance to be subject to the jurisdiction of the Internal Revenue Service.”
And on the issue of return on investment. Sudhir Shah, an immigration lawyer based in Mumbai, explains, “For many Indian investors, the return on investments is more important than the fact that they will receive a fast-track green card along with family members. Besides, some find it difficult to provide details about the source of their funds.”
The Importance of Legal Assistance
Interested Indian investors are advised to speak with an EB-5 visa attorney, as the program is not without its complications, including difficulties routing investments through regional centers that Shah says are often non-functional or unreliable.
Future of Program for Indian Investors
Some experts believe Indian interest in the program will continue to rise as more people learn about the opportunity, and more networks develop in major centers in India to educate the populace about it. Kapuria estimates demand will grow by leaps and bounds in the coming years, saying, “I think it does have the capacity to jump 20-30 percent in the next few years. Given how underdeveloped the Indian EB-5 market is, EB-5 developers would be wise to explore this untapped market.”
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Beeraj Patel, Esq.
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