India will become the second largest EB-5 visa market in the world: Rogelio Caceres, LCR Partners
"The fundamental difference between an EB-5 visa and H-1 or L-1 is that an EB-5 visa is an “immigrant” visa. This means an EB-5 visa provides the individual with a green card, or lawful permanent residence in US."
With the fate of the H-1B visa programme, which has long been used by the Indian IT industry for skilled workforce transfer to the US, still hanging in the balance, the EB-5 visa has emerged as an alternative. The visa involves a high initial investment of USD 500,000 but guarantees relocation to the US, and has been untouched by the US Congress for over two decades now. In an interview with Moneycontrol, Westport, Connecticut-based private investment firm LCR Partners’ co-founder Rogelio Caceres and general counsel Matthew Virkstis, talks about why India is set to overtake Vietnam as the second largest EB-5 market this year in the world, and what kind of people are willing to invest in the visa.
What kind of interest have you seen for EB-5 among clients?
Rogelio Caceres: The EB-5 market awareness across India has exploded over the last couple of years. When LCR first entered the market in 2015 most people were not aware of the existence of the EB-5 program. However, now the awareness has skyrocketed, and therefore, our applications have increased four-fold over the last two years.
Like most nationalities, 74 percent of Indians (as per the USCIS) choose to invest in real estate projects. There are particular regions in India from where we have noticed that investors are also quite interested in restaurant franchises and the hospitality industry.
Could you explain how the usability of an EB-5 differs from that of an H-1 or L1 visa?
Matt Virkstis: The fundamental difference between an EB-5 visa and H-1 or L-1 is that an EB-5 visa is an “immigrant” visa. This means an EB-5 visa provides the individual with a green card, or lawful permanent residence in the United States. H-1B and L-1 visas are “non-immigrant” visas, which means that the visa is temporary, and the holder of the visa intends to return to his or her home country.
Rogelio Caceres: With an H-1B visa, the individual needs sponsorship from the employer, which often proves to be a competitive disadvantage after graduation for international students applying for top positions at companies in the US. The H-1B programme is based on a lottery system by the USCIS which makes it near impossible for most to ‘win’ an H1B visa.
L-1 is an intra-company transfer visa allowing immigrants at managerial positions to move to the US. Relocating to the US via the L-1 visa is simpler than H-1B as the duration of waiting is decidedly less.Nevertheless, an L-1 is restrictive owing to the lesser mobility available to employees. They must work with the firm sponsoring their L-1 visa in the United States throughout the period.
What kind of people are interested in the EB-5 visa from India?
Rogelio Caceres: Each of our client/potential client persona falls under the broad category of aspirants interested in emigrating to the US. Among the client personas that we see an interest from in India include: parents of 15-20- year-olds who aspire to relocate to the US, mostly children of CXOs or professionals with admirable education backgrounds, substantial career and wealth growth.
There are also H-1B or other visa aspirants in queue, which includes students or professionals already in the US who prefer to remain there rather than repatriating back. Families are willing to invest money because their kids are happier working in the States.
There are also owners of SME businesses, and CXOs or senior management professionals.
The initial investment of $500,000 is quite high. Does that not restrict the demographic of applicants from India?
Rogelio Caceres: While the minimum investment amount of USD 500,000 is not a nominal sum the value proposition is quite strong. The EB-5 program has not changed the price since the launch of the program in 1990 i.e. over 25 years. The amount still remains unchanged. When compared to other investment immigration programs from around the world, specifically the UK where the Tier I investor program at USD 2.5 million or that in Australia at over USD 4 million, the EB-5 program is quite attractive.
What are the kind of projects can HNIs from India look at?
Rogelio Caceres: Investors have various options in the real estate development, hospitality and, the franchise industry where the projects are primarily to do with the quick service restaurant (QSR) sector.
LCR focuses on working with proven developers with long track records of success, ensuring that we conceive of and structure projects that meet our investor’s needs such as high job creations, principle preservation and timely return of capital. We associate ourselves with top brands like the Four Seasons and Dunkin’ Donuts, and structure projects to meet our investor’s needs.
What is India’s role in the current EB-5 visa market scenario?
Rogelio Caceres: India, now, is the third largest market after China and Vietnam. We predict, this year, India will become the second largest EB5 market in the world. Its growth potential is unlimited. When combining the strong wealth creation, the affinity to the United States, the strong value proposition for the children/professionals applying to study or work, or those who are already in the States, we feel the India market will continue its explosive growth over the next several years.
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