by Kate Kalmykov and Sylvia Sobczyk
The EB-5 program is a proven means for Indian foreign nationals to gain United States permanent resident status. Investors and their representatives should be conscious of India-specific issues that arise when preparing the source of funds petition for filing with United States Citizenship and Immigration Services (USCIS) or preparing for consular processing in Mumbai. The following top five strategies are among the ways Greenberg Traurig, LLP can help in preparing a successful EB-5 petition for the Indian investor:
- Trace the funds from investor to escrow: USCIS requires the investor to demonstrate that personal funds were derived from a lawful source and ultimately invested in the EB-5 enterprise. Numerous transactions between the investor and the EB-5 enterprise investment require the investor to provide documentation from each transaction. It is important to clearly state the source of the investment: salary plus bonus, business income (more common in India), shareholder loan, sale of property, rent from property, home equity loan (less common in India), or gift from a family member.
- Provide five years of tax returns: USCIS requires the investor to provide personal income tax returns in each jurisdiction where he or she is subject to taxation. In India, the tax regime is westernized and very similar to the United States. Investors will pay personal tax and business tax in India. If the investor owns a business that is the source of the investment, the business taxes paid for five years must be documented in the source of funds petition.
- Be conscious of Indian foreign currency laws: India restricts the amount of USDs that can be transferred outside of India. New measures decrease the limit on annual outbound remittances from $200,000 to $75,000 per person. The investor must be conscious of these restrictions and utilize foreign currency export methods to transfer funds from India to the United States.
- Utilize foreign currency export methods to transfer funds: The following represent transfer methods from India to the United States:
- Seven friends or family method: The investor may use the help of seven friends or family members to transfer the funds to a bank account outside of India before making the investment. Each transaction of funds to each friend must be documented, along with the purchase of USD currency, the subsequent transfer back to the investor outside of India, and the investor’s transfer to the escrow in the United States.
- “Hawala” exchange method: The investor may use the help of a “hawala” agent to transfer the funds outside of India before making the investment. The transaction of funds to the hawala agent must be documented, along with the transfer to a hawala agent in another country outside of India, the subsequent transfer to the investor in another country outside of India, and the investor’s transfer to the escrow in the United States.
- Be conscious of I-526 and consular processing times: The investor and his or her representative should be conscious of the amount of time it takes to (a) process the initial EB-5 petition and (2) process the visa documents at the consulate:
- First, the I-526 petition must be processed with USCIS. I-526 processing times are currently at 12-15 months. If USCIS requests additional evidence, the adjudication of the petition may extend an additional 60-90 days or, in some cases, even longer.
- Once the I-526 is approved, the U.S. Consulate in Mumbai schedules the investor and family for an immigrant visa interview. The consular processing time in Mumbai is an additional 9-12 months. If approved at or after the interview, the investor plus spouse and unmarried children under 21 receive conditional immigrant visas.