One of the most popular paths to U.S. employment for foreign nationals is the H-1B visa. Under the Bush administration in 2003, the H-1B visa cap was reduced from 195,000 to 65,000. The H-1B Visa Reform Act of 2004 increased this cap by 20,000 for candidates who earned a master’s or PhD from a U.S. institution. The resulting 85,000 cap for H-1B visa recipients has remained unchanged until now. With President Donald Trump’s Buy American and Hire American Executive Order signed in April 2017, there are now more hurdles and restrictions for those applying for H-1B visas. This has made the EB-5 visa program a popular route for Indian investors seeking to obtain permanent residence in the U.S. while avoiding the work visa application and renewal process entirely.
With a population of over 1.3 billion, India receives the largest number of H-1B visas, making up 75.6% of approved H-1B visas in fiscal year 2017. Indian workers tend to be strong in information technology, which has led to a boon in the U.S. tech industry. However, Indian interest in H-1B visas has declined over the last several years, leaving many U.S. tech jobs unfilled. This effect has only been exacerbated through President Trump’s recent executive order. For Indian citizens especially, the EB-5 visa has become a strong second option.
Wealth and Economy
In the last several years, the level of wealth in India has increased significantly. As of 2017, India contained more than 260,000 millionaires with a combined wealth of over $1 trillion, ranking it in 11th place behind countries like the U.S. and China. Income inequality in India is expected to continue growing, with the richest 1% owning more than 50% of the country’s wealth. It is therefore advantageous for the U.S. to welcome Indian investors through the EB-5 visa program, seeing as Indians constitute one of the richest populations in the U.S.
As a former colony of the British Empire, India’s parliamentary democracy is designed after that of the U.K. The executive branch, headed by a president and prime minister, is answerable to the bicameral legislative branch. Like in the U.S., the Indian judicial branch has multiple levels and is independent. One major difference between India’s and America’s democracies, however, is India’s continued dependence on the caste system. Although past efforts were made to prevent discrimination based on caste, the caste system in India remains strong today and plays a large part in Indian politics and society. As a result, social mobility is still difficult for individuals born into lower castes.
Crime and Safety
While India’s crime rate of 379 crimes per 100,000 people in 2018 was lower than in the United States, the number of rapes, homicides, kidnappings, and dowry deaths has been increasing. India has been ranked as one of the most dangerous countries for female travelers, and bank fraud and cyber attacks are on the rise as well. The Indian police force suffers from a shortage in personnel and vehicles, issues with infrastructure and communication, lack of proper training and weapons, and problems with political corruption. In this environment, it is understandable that wealthy Indians might want to move to a country with a better policing system.
As with many quickly developing countries, the lack of strong factory regulations in India has led to a dangerous increase in pollution, especially in cities. The top 10 most polluted cities in the world are contained in northern India, far surpassing China. This trend has been accompanied by a rise in rates of cardiovascular and respiratory diseases, which have decreased India’s overall life expectancy. The stricter air and water regulations and cleaner living standards in the U.S. present a more appealing alternative for Indian EB-5 investors and their families.
Improvements in India’s educational system and its large university network have played a large part in the country’s recent economic growth. However, while India has made efforts to boost the quality of its public education and increase enrollment in primary schools, its high school graduation rates hovered at only 42% as of 2015. With teacher shortages, problems in school infrastructure, and poor quality of learning, many Indian families turn to American schools and universities to better educate their children.
EB-5 Project Selection Preferences
In keeping with their prudence and entrepreneurial spirit, many Indian EB-5 investors tend to favor smaller projects that require more personal involvement and active participation. Instead of putting money into a larger project, these EB-5 investors often prefer to start their own enterprise with local Indian partners, or to select a project being developed by an Indian developer or sponsor. Indian EB-5 investors are also strong negotiators when it comes to the terms of investment and any extraneous costs, including administrative and immigration attorney fees. EB5 Affiliate Network (EB5AN) regularly works with Indian project developers and sponsors to assemble the required project documentation through an I-526 template. EB5AN also provides regional center sponsorship under one of its 15 USCIS-approved regional centers for projects seeking Indian EB-5 investors.
Capital Flow and Other Challenges with the EB-5 Process
Current laws allow Indian individuals to move $250,000 to other countries, which means two partners can transfer the required $500,000 for an EB-5 investment with relative ease. However, the main issue for EB-5 investors in India is providing official documentation that the funds come from a legal source and have been properly taxed. The prevalence in India of money that is earned legally but not reported to the Indian government can complicate the EB-5 application process. Prospective Indian EB-5 investors must therefore hire skilled immigration lawyers and source of funds (SOF) consultants to verify that their documentation is sufficient and satisfies USCIS requirements.
Marketing Channels for Investors
Unlike in China, where a majority of EB-5 investors flow through a select few large immigration brokers, the Indian EB-5 market is highly fragmented with only a handful of established and experienced agents. The majority of Indian investors to date are sourced through networks of small companies that tangentially touch wealthy Indian EB-5 investors. Common examples are chartered accountants, travel agencies, real estate brokers, and wealth managers. In addition, many Indian EB-5 investors are sourced directly by regional centers and project sponsors through in-person seminars in India. These entities also target Indian investors already located in the U.S. who are on alternative visas, such as the H-1B or F-1.