The US employment-based fifth preference category (EB5) immigrant visa, received on investing $1 million in a new business, has been extended late last year.
The amount of investment for EB5, if made in a backward or targeted employment area, is half-a-million dollars and the investor can invest the funds directly or in a recognised regional centre for five years after which they are granted immigrant visa.
The EB5 investors, along with their spouse and unmarried children below the age of 21 years, are after entering USA granted conditional green card valid for two years. The conditional green card becomes permanent after two years on showing that the investment is not withdrawn and 10 jobs are created in the US.
In December 2015, the US House and Senate recommended that the EB5 programme be extended till September 30, 2016, which means that none of the rules of the programme including minimum investment amounts and definition of targeted employment areas, will change till the stipulated time.
This will be of advantageous for Indian investors who are planning to move to the US considering that Chinese investors, under the EB5 programme, have exceeded their quota in 2014 and will now have to wait for a couple of years before they can apply.
“EB5 regional centres in the US are now scouting for investors from India in a big way,” said Sudhir Shah, a Mumbai based advocate specialising in immigration. He said that in 2015, several regional centres have sent representatives to India to Gujarat, Maharashtra, Delhi, Chandigarh, Bengaluru and Hyderabad to pitch to likely applicants of EB5 visas.
“As a lawyer advising Indian investors on the EB5 programme, I have to carry out due diligence for the selection of regional centres. I also need to carry out checks about the source of funds and path of funds of my clients so that they can satisfy the immigration authorities in the US that the funds which they are investing are legally earned,” said Shah.
The extension of the EB5 programme with no increase in the minimum investment requirement is likely to benefit Indian applicants in a big way.
“There were proposals to increase the minimum investment requirement from $500,000 to $800,000 and from $1 million to $1.2 million. The extension means less pressure for Indians and allows Indians more due diligence time on regional centres and for business planning,” said Martin O Suilleabhain, who runs an immigration consultancy ExecVisa in America.
Mark I Davies, chairman of New York-based immigration law firm Davies & Associates, too, said that the extension will allow Indian investors a window to invest in the EB5 programme at a lower investment level ahead of a likely change in the law that may increase the amount.
“For many Indian nationals the EB5 programme is by far the fastest way to a US green card or permanent residency. Many Indian business owners looking to expand in the US have been frustrated by limitations on the L visa programme.
An EB5-based green card allows the applicants to carry out whatever legal work or business activities they may wish to in the US,” Davies said.
He said that while current laws allow investors to take a loan from both financial and non-financial organisations (including friends and family), the new legislation, which might become effective after September 2016, proposes that loans for an EB5 programme can only be taken from US government-recognised private or government financial institutions.
“This will be a great hindrance to Indian investors as the interest rates offered by financial institutions are very high. Under the current laws, investors can take a loan from friends or family at minimal interest rates,” he said.
There could also be changes in the kind of projects that EB5 investors can put their money into.