EB5 or the Immigrant Investor Program is administered by the USCIS (United States Citizenship and Immigration Services) and was created in 1990 by the Congress to stimulate the growth of the U.S. economy and increase employment through foreign investment. A foreign applicant is required to invest $500,000.00 or $1,000,000.00 in an approved commercial business; creating ten (10) jobs to qualify for an EB5 based “Green Card”..
The U.S. market is highly attractive to Indian clients as it is by far the world’s largest consumer market1. An EB5 based “Green Card” enables the applicant to launch their business activities in the U.S., leading to an increased revenue and level of production in India. It facilitates the removal of “middle men”, direct selling to U.S. consumers and acquisition of a greater proportion of the margin that is available to them in their respective industries.
Many of our EB-5 clients have children studying in the U.S. and often these children are interested in gaining employment in the U.S. post-graduation. The H1-B program makes it difficult for them to obtain the necessary experience they are after, whereas with an EB-5 based “Green Card” they do not have to deal with any of the issues associated with obtaining a H1-B visa.
The United States is the world’s largest consumer market (see Answer 1, above). Indian businesses want to access the market directly as it allows them to retain the entire margin instead of giving away a significant proportion of that margin to US agents and distributors. The H1B or L visa holder is restricted to only working in the business that they petitioned for their visa. With the help of the EB-5 program an Indian HNI can either invest in their own U.S. business (“Direct EB5 Program”) or a Regional Center sponsored project and obtain a “Green Card” which provides them the right to freely operate any legal business of their choice in the U.S..
Direct EB 5 vs Regional Center
Direct EB- 5 Visa
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 program is therefore a route for HNI Indian investors to establish and operate their own businesses in the US.Approximately 90% of all EB5 cases are filed through a Regional Center.
By definition very few firms have any experience with “Direct EB5” cases where a client invests in their own business or in a business that is not offered through a Regional Center. Davies & Associates represents clients from across India who are obtaining their “green card” through the “Direct” route.
Investing via Regional Center
Investing through a Regional Center can be the easiest and fastest way to a “green card”. That said, choosing the right Regional Center is key. Choosing the wrong Regional Center can lead to disaster, the loss of your money and a failure to obtain a “green card”.
There are now well over 750 Regional Center registrations in the United States. While we are not a financial advisor we can provide clients with accurate historical information on the success of different Regional Centers. We can also provide legal due diligence on the background and qualifications of Regional Centers.
A key question is to understand your law firms experience with complex structured finance. Without this experience you lawyer will not be able to fully understand the nature of the risks involved.
An EB5 lawyer needs to be independent of a particular Regional Center because that EB5 lawyer needs to be able to negotiate against a Regional Center on your behalf or to take that Regional Center to court to obtain a refund of your money. A lawyer cannot negotiate against a Regional Center or take them to court for your money if that lawyer also represents that Regional Center or are being paid by it.
It is not uncommon for Davies & Associates to find errors in Regional Center documents or in the financial structure of the underlying deal. As an independent law firm Davies & Associates negotiate against the Regional Centers on behalf of Indian Investors to correct these defects. If we are not satisfied with the deal structure and documentation we will advise our client to withdraw from the investment. It is worth noting that Davies & Associates has obtained a 100% refund from a Regional Center where our Indian client decided to withdraw from the transaction.