Under the EB-5 program, increasing number of Indian nationals are shelling out half a million US dollars in order to get themselves and their families permanent residence status in the US, and eventually American citizenship. The EB-5 is an investment program which allows foreign nationals to obtain US green cards through investment. The minimum investment amount is $1,000,000 or 500,000 depending upon the nature of investment.
The EB-5 program was introduced almost twenty years ago as a way to stimulate the US economy by drawing in foreign capital and promoting job growth in the country. Since then, the program has played a significant role in reviving many real estate projects. Particularly, post the 2008 financial crisis, with the markets being faced with a liquidity crunch and few banks willing to lend, developers found the EB-5 program a great mechanism to raise cheap capital. The EB-5 is most popular among nationals of China and Vietnam followed by India, with billions of overseas capital coming into US projects from these countries.
Under the EB-5, green card or permanent residence status can be obtained in two ways. First, under the ‘direct investment’ route, one can invest capital by starting a business from scratch and creating 10 full-time local jobs. The second route via the ‘regional center’ is simpler and requires a one-time investment of $1,00,00,000 or $500,000 (in certain targeted employment areas) into a government approved EB-5 business that creates 10 or more full-time jobs.
Anti- EB-5 advocates have called for the elimination of the program arguing that the program is susceptible to fraud which might facilitate money laundering. The EB-5 Regional Center program was set to sunset a few times in the past, and currently, has been extended by the US Congress through December 8, 2017 without any additional changes to the program. Supporters of the EB-5 argue that the program has been a boon to the US economy over the years, creating more jobs for American workers and getting overseas investors to start companies and do business in the US.
Ahead of the December 8th deadline, developers and foreign nationals are rushing to turn in their green card applications under the EB-5 as a result of the uncertainty about the program’s future. There is speculation that lawmakers may sharply increase the investment amount or allow the program to end.
Zeenat Phophalia, Esq., Senior Associate