Immigrant EB5 visas, for small business that create jobs in the US, have seen a spurt of interest in India with applications under this quota increasing 25% year over year, say sources. For the first 70 days of 2016, 130 EB5 visas have been granted by the US government for Indian businesses, while only 111 were granted for the whole of 2015, data with the US State Department said.
The immigrant visa, aimed at helping businessmen, fell afoul of authorities when Indian-origin Anshoo Sethi convinced about 290 Chinese nationals to invest $160 million dollars in a non-existent hotel complex. Charges were brought against Sethi that he had defrauded investors and the the US government through false statements and representations over his intention to build a convention center complex with hotels near O'Hare International Airport between January 2011 and February 2013. But despite such setbacks and negative press, law firms say that there is now a definite increase in interest in both countries for the issuance of visas in this category.
"I can certainly say EB5 will be the next big thing on the Indian business start-up scene. We've had clients from high-level fashion houses to sweet shops opting for the programme. China every year has thousands of visas issued under this category. Even Vietnam that's much smaller in size has more EB5 visas issued than India," says lawyer Mark Davies.
In 2015, immigrants of Chinese origian had 8,156 EB5 visas issued compared to 111 visas for Indian businessmen wanting to set shop in the US. China tops the list with 83.5% of the market share, while India comes is fifth with just 1.1%. Vietnamese businessmen bagged 280 visas in 2015 with 2.9% of the market.
"EB5 immigrant investor programme was created to pump in fresh funds into the American economy. It hopes to create stimulus with jobs and new capital from high-net worth foreign investors. The minimum requirement is that the applicant invest $1 million in some commercial enterprise in the US and create at least 10 jobs for locals," says Abhinav Lohia of law firm Davies & Associate, LLC, which specialises in immigrant policy.
For many Indians, the green card provides such an irresistible allure that they fail to read the fine print when it comes to the investment. "One has to be very sure as to the reason why one needs visa under a particular category. There are L1, B1 visas also available. In EB5 there is the catch of investing back into America - and with the amount being clearly specified," says lawyer A Sirajudeen.
While EB5 definitely gives the holder permanent resident status in the US, it also comes with the clause that one needs to invest $1 million in a US enterprise or at least half a million if the project is to come up in a remote or targeted employment areas. "We've had many high net worth individuals in India looking at EB5 as a serious alternative. There has been an steady rise in applications. In 2011, there were only 37 visas under EB5 issued to Indians, the number rose from 38 in 2012 to 96 in 2014," says Mark Davies.