The U.S. is all set to effect a steep increase in EB-5 visa charges.
As per information available on the website of US Citizenship and Immigration Services (USCIS), the minimum amount required to be invested in the Targeted Employment Areas (TEAs) in the U.S. will go up to $9,00,000 (₹6.2 crore), an 80% hike from the existing $5,00,000 (₹3.5 crore).
Also, the fees for standard investment (in urban areas) will go up to $1,800,000 (over ₹12 crore) from $1,000,000 (₹6.8 crore).
First such move
The new EB-5 fee structure, the first such move since the inception of the programme in 1990, will come into effect from November 21.
Several high networth professionals, students, entrepreneurs and families in India have been exploring EB-5 in the last three decades as it is the easiest channel to get a green card and permanent residency in the U.S. As per USCIS Acting Director Ken Cuccinelli, “Nearly 30 years ago, Congress created the EB-5 programme to benefit U.S. workers, boost the economy, and aid distressed communities by providing an incentive for foreign capital investment in the United States.
“Since its inception, the EB-5 programme has drifted away from Congress’s intent. Our reforms increase the investment level to account for inflation over the past three decades and substantially restrict the possibility of gerrymandering to ensure that the reduced investment amount is reserved for rural and high-unemployment areas most in need.
This final rule strengthens the EB-5 programme by returning it to its Congressional intent,’’ he added, explaining the logic behind the fee hike. Interestingly, the Department of Homeland Security (DHS) has also taken away the power of defining TEAs from the State governments and given it to the Federal government.
“Moving control over determining TEAs to the Department of Homeland Security is an integrity move that would prevent the gerrymandering of unemployment data that has allowed affluent areas like Manhattan in New York and Beverly Hills in California to qualify for EB-5 investment,” commented Matt Hogan, VP, project development, CMB Regional Centres, Illinois, an EB-5 advisory firm.
Scramble for EB-5 visas
India will witness a scramble for EB-5 visas in the next few months, before the new rules kick in.
Post November, the demand will go down drastically, said immigration experts.
Tough times for India
With stricter norms on H1-B visa and now the hike in investment amount, immigration options have really reduced for Indian applicants, say experts.
As per Vivek Tandon, founder and CEO, EB5 BRICS, a U.S.-based visa advisory firm, higher investment requirement would be a dampener for all investors, Indians included.
“However,considering most Indians opt for the EB-5 visa with an eye on better educational and career prospects for their children, the hike is unlikely to cause Indians to explore alternative options.’’
Abhinav Lohia Esq, director, south Asia and the Middle East, CanAm Investor Services said, rise of minimum investment amount in EB5 coupled with retrogression caused by over subscription of employment-based green cards such as EB2, EB3 and EB5 would dampen the spirit of not only Indians living in India but also Indians living in the United States on H1B visa.
“Some mathematicians predict the wait times for Indian nationals on EB2 and EB3 category is over 50 years to get a green card. In my opinion EB-5 will still remain an option for the ultra HNIs (high networth indviduals) because it remains the fastest way of getting a green card.’’
However, limited time available to make a big ticket decision will still be a hitch.
“Indians considering submitting an EB-5 application ahead of the price increase need to be aware that proving the source of their funds takes an average of two months, which effectively reduces the amount of time available for applicants wishing to lock in the current rate.” said Mark Davies, global chairman of Davies & Associates.
