The number of Indian high networth individuals (HNIs) applying for Permanent Residency (a Green Card) in the United States using the EB-5 programme is at an all-time high. The principal reasons behind this increasing number of Indian EB-5 petitions are the financial prospects and possibilities that exist for Green Card holders in the US.
These financial prospects and possibilities include:
Direct vs Regional Center:Building your own business
While most Indian nationals pursuing EB-5 based Green Cards obtain them through the Regional Center route, a number of our clients use Direct EB-5 to either establish or expand their own, family-owned, businesses in the United States.
The Direct EB-5 programme, is therefore, a route for HNI Indian investors to establish and operate their own businesses in the US.
Obtaining investorsfor your business
Under the right circumstances, the US government will grant EB-5 Green Cards to Indian and other nationals who invest in an Indian HNIs business or project in the US. For example, an Indian HNI might build a hotel, factory or a US subsidiary of his or her Indian business; with sufficient job stimulation both the Indian HNI and his investors can obtain Green Cards through the EB-5 programme. As the investor does not have to be Indian, this is another way in which Indian businesses benefit from the EB-5 programme. They are able to attract capital investment and grow as a result of the EB-5 programme. Additionally, Green Card holders may find it easier to attract more traditional forms of funding from within the US.
Access to the US consumer market
The US domestic consumer market constitutes almost 27% of the entire world’s consumer market and is more than triple the size of the Chinese market. Unlike other forms of visas which restrict a client to limited business activities, a Green Card allows an Indian HNI to engage in any lawful activity and to operate any business they wish.
The Regional Center EB-5 programme is due to expire in September 2016. It is uncertain if the programme will be extended. If it is extended, then the required investment is likely to be increased from $500,000 to $800,000. By investing in the EB-5 programme, now Indian investors can insulate themselves from this potential increase.
It is important to note that the Direct EB-5 programme is not due to expire in September 2016 and is permanent.
Growth of Indian businessand Indian employment
This promotes ‘Make in India’. The US is the largest consumer market, Indian entrepreneurs can make in India and sell in the US. It is frequently the case that a direct presence in the United States stimulates orders for a client’s business in India. In this way, EB-5 stimulates economic growth in India and increased employment in the Indian market.
Regardless of whether the EB-5 Green Card is obtained through the Direct or Regional Center route, an HNI Indian investor is able to undertake any lawful business activity and engage in any lawful investment in the US. The holders of other types of visas have considerably less flexibility.
Access to the US government business assistance programmes
As a Green Card holder, an Indian national may be eligible for a variety of business funding and assistance from the US government.
Traditionally, many Indian businesses engaged distributors or a middle man to sell their Indian-produced products or services in the US. Unfortunately, these middle men historically retained much of the margin and profits on the sale of India-produced goods and services. Part of the problem is that US consumers want to purchase goods and services from a US-based supplier, even if those goods and services are not ultimately produced in the US.
By obtaining an EB-5 based Green Card, an Indian businessman is able to establish and operate one or multiple businesses in the US that directly distribute products or services to the consumer.
Post-college employment opportunities: Building experience in the Indian workforce
Many Indian HNIs have children attending college in the US on student visas. As US employers can be reluctant to sponsor students for a visa, it can be difficult for non-US children to find work after college. Parents, therefore, gift their children sufficient funds to pursue an EB-5 based investment. Armed with an EB-5 based Green Card, the children of Indian HNIs studying in the US no longer require a work visa and have a significantly easier time obtaining work post-graduation.It is worth pointing out that many children of Indian HNIs work in the US for several years before returning to India. In this way, India benefits from an influx of highly educated workers with experience in some of the largest businesses in the United States. In our experience, this promotes international trade and the growth of the Indian economy.
US naturalisation and OCI status
HNI Indian nationals who maintain US residency for a period of five years may be able to apply for naturalisation as a US citizen. As a US citizen, an Indian HNI is able to reside in any country they wish to. In addition, an Indian national who naturalises as a US citizen may be able to obtain overseas citizen of India status in India allowing that HNI to access India.
(The author is the Global Managing Partner and Founder of New York headquartered Davies & Associates)