Rich Indians worry as ‘dollar’ visa set to end

Many high net worth individuals the world over, including in India, are worried as the controversial immigrant visa programme for the wealthy in the US- EB-5 Programme, is set to expire this month-end.

What is EB-5 Programme?

It is popularly called as the ‘Green Card for greenback’ scheme. The EB-5 programme was created in 1990 with the approval of the US Congress — America’s highest law-making body.

• It aims to boost the American economy by attracting investment from foreign nationals and generating employment for locals. In 1992, its scope was widened through an Immigrant Investor Programme, or the Regional Centre Programme.
• Simply put, the programme grants rich entrepreneurs — as well as their spouses and unmarried children below the age of 21 — an opportunity to bag the coveted U.S. Green Card (or status of permanent residence) and Citizenship.
• The programme is named EB-5 as it is the fifth preference category under the Employment-Based (EB) immigration visas.    

How this scheme operates?

• Rich entrepreneurs have to invest in over half a million dollars in the U.S. and ensure that the funds help generate at least ten full-time jobs for qualified U.S. workers.
• The visa, given in exchange for investments, grants the holder a conditional permanent residence status.
• After two years, the conditions may be removed, when it becomes permanent green card that can lead to citizenship, provided it has resulted in the creation of 10 jobs.

Key facts:

• In order to be considered for permanent residency status in the U.S., the Programme mandates a qualified foreign investor to invest at least $1 million — or a minimum of $500,000 if the investment is made in certain rural areas or regions with high unemployment — and show that ten or more full-time positions were generated or preserved directly or indirectly as a result of that investment.
• These EB-5 investments can be stand-alone or made through Regional Centres, with the former (direct investments) carrying a greater risk than investments made through over 860 approved Regional Centres that have more on-the-ground knowledge.
• Regional Centres are certain designated organisations permitted to collect money from overseas investors seeking the EB-5 visas, and then pump such foreign investment into officially approved projects.

Why Indians are concerned?

In 2015, the U.S. authorities issued 111 EB-5 visas to Indians — that is 15 more than the previous year, and 74 more than the number of such immigrant visas issued in 2011. The rapid rise in the number of EB-5 visas to Indians in the last few years had led to the filing of over a thousand applications under that category from India this year.

However, in the backdrop of allegations of fraud and corruption — including against Indian-origin individuals — related to the programme, the U.S. Congress is planning to consider whether to renew it or to pay heed to growing criticism and wind it up altogether.

Key facts:

• According to U.S. government data, applicants from China managed to get 8,156 visas under this programme.
• This was followed by Vietnam (280), China/Taiwan-born (139), South Korea (116), India (111), Russia (88), UK (84), Mexico (77) and Iran (62).

Way ahead:

EB-5 programme has so far attracted FDI worth around $16.8 billion. It has also contributed $9.62 billion to the U.S. GDP, supported 29,300 jobs annually and generated $2.08 billion in tax revenue. Now, it remains to be seen how the U.S. Congress will do a balancing act especially since it is estimated that if the programme fails to get re-authorised, it could not only adversely impact over $20 billion worth of investments, but also lead to many court cases in addition to a loss of an estimated over three lakh jobs.