other provisions of LRS requires prior written permission. All
licensed banks in India are authorized to act as remittance
agents and they are required to ensure the remittance is
within the LRS framework.
There are some provisions which imply that remittance
done by multiple family members ultimately applied to result
in benefit of one family member is considered as “clubbing”
of the remittance limit and it’s in contravention of the law
"Banks, which are
authorized agents of
RBI, are also split in
interpreting the issue of
clubbing and many banks
in India deny remitting
funds for EB-5 unless
its only by the primary
applicant spread over two
financial years."
and its intent. EB-5 investment is done in the name of the
primary applicant only. Therefore, remitting EB-5 funds
outside India under names of two or more family members
towards a subscription agreement executed in the name of
only a primary applicant can be conservatively interpreted
as clubbing. Conversely, a more liberal interpretation rests
on the premise that other family members also benefit from
remittance as they are also derivative members of the EB-5
investment. Banks, which are authorized agents of RBI, are
also split in interpreting the issue of clubbing and many
32
EB5 INVESTORS M AGAZINE
banks in India deny remitting funds for EB-5 unless its only
by the primary applicant spread over two financial years. A
simple work around for this, given the investment is made
at an appropriate time, is to remit funds over March and
April under limit of the primary applicant only. However, in
all other cases, careful planning of path of funds to navigate
the “clubbing” issue is essential and so is finding a good
bank that is taking a liberal interpretation and is remitting
funds at reasonable costs to investors.
Assessment of I-526 is primarily done on two aspects –
projects ability to create jobs and lawfulness of source
of funds. The only aspect an investor can control and
contribute to, having chosen the project for the EB-5
investment, is having a strong documentation of lawful
source of funds with careful calibration of all legal and
practical aspects.
Ullas Shah is a char tered public
accountant in the U.S. and a chartered
accountant in India. Shah boasts three
decades of experience as a tax and
accounting professional. He has been
instrumental in advising some of the largest
corporate restructuring deals in India. As an
EB-5 investor himself, he has meticulously
studied EB-5 requirements. Coupled with his
in-depth understanding of the Indian tax and accounting framework,
he has drafted documentation of lawful sources of funds for many
EB-5 investors. He has also worked with leading U.S. immigration
attorneys, regional centers and projects.