Regional centers offer the advantages of more professional
planning, economies of scale, and availability of alternative
options to ensure eligibility under the program. No doubt,
comparing options and choosing the right regional center
requires careful due diligence and monitoring. Yet, this
route certainly is less risky compared to setting up a
project or venture directly.
The trend seems to have changed in FY 17 with industry
forums indicating 87 percent approval for Indian EB-5
applications through the year.
QUALIFYING AS
AN ACCREDITED U.S. INVESTOR
Indians’ preference for direct investment may also be
attributable to the fact that the regional center route is a
simpler process if one is an accredited U.S. investor
While the accredited U.S. investor issue is a requirement
under the American Securities law and not mandated by
the EB-5 visa program, only those with an earned income of
$200,000 ($300,000 together with spouse) for the past three
years or with a net worth in excess of $1 million (alone or
together with spouse) are eligible to apply for the EB-5 visa
through the regional center route as an accredited investor.
Regional centers can issue securities to non-accredited
investors by obtaining an exemption under Regulation D or
Regulation S. However, these involve certain restrictions and
conditions.
Tackling challenges ranging from greater understanding
of eligibility requirements and its granular implications
to better perception management will ensure a mutually-
beneficial connect for Indian investors and the American
economy alike.
Vivek Tandon is the founder and CEO
of EB5 BRICS, a go-to source for everything
related to the EB-5 U.S. Immigrant Investor
Visa program. Tandon, a lawyer and an
investment banker, primarily focuses
on educating investors in India and the
Middle East about the EB-5 visa program,
EB-5 regional center projects and EB-5
direct investments. He also holds licenses
with the Financial Industry Regulatory
Authority and U.S. Securities and Exchange
Commission. He is associated with broker-dealer NMS Capital
Advisors, LLC in Beverly Hills, California.
Sources:
1
World Bank’s Global Economic Prospect report June 2018
2
https://qz.com/india/1316124/india-will-have-nearly-a-million-millionaires-by-2027/
Regulation D prohibits the regional center from general
solicitation and advertising, issue to unsophisticated
investors, or to more than 35 non-accredited investors.
Regulation S requires the offer and sale of securities to
occur outside the US. Further, this regulation does not offer
an exemption from state securities law.
This means the general perception that the ability to make a
large one-time investment is all it takes to apply for the EB-5
visa is not accurate, at least in the context of applicability of
securities laws to regional center investments.
Finally, an interesting and unique challenge in the Indian
context is the negative perception surrounding investment
immigration in India.
In recent years, many high-profile loan defaulters from India
have, upon investigation, found to have relied on investment
immigration programs to secure permanent residence/
citizenship abroad. While not necessarily relevant in the
context of the EB-5 visa, concerns about the reason why
people apply for investor visas and how they are perceived is
an issue that needs to be suitably addressed.
The backlog of Chinese EB-5 applications has resulted in an
inevitable shift in focus to other countries. With a growing
economy and a young population that views the United
States as a ticket to prosperity and a better life, India is set
to be the dominant source of demand for EB-5 visas.
EB5INVESTORS.COM 115