Jay Mehta, director of FRR Immigration, specializes in helping Indian investors and knows what is most important to them. In this episode, he chats with host Ali Jahangiri and answers the questions: What are the differences between Indian and Chinese investors? What do Indian investors care about when they choose to invest in an EB-5 visa in United States? And most importantly, how can professionals best help them?
Jay: There's a lot of ambition in Indians. Indians like to know everything that's out there so that they can click onto it anytime something happens or anytime someone references a conversation. So they come for information for education and then hope to create business out of that.
Ali: This is the voice of EB-5 by EB-5 Investors magazine. Each week we sit down with the experts and the private investment space to get valuable insights in the latest EB-5 news. Good morning, everybody. I'm here with Jay Mehta from FRR shares. How are you doing, Jay?
Jay: Hey, Ali. Thank you for this opportunity. Doing very well. I hope you're doing well, too.
Ali: Thank you. Jay. It was great seeing you in Mumbai and great seeing your dad and your brother. Did you guys get some rest after the event?
Jay: Not really. We actually jumped right into it with the follow ups of all the people that attended and came into our exhibit. So no rest for us.
Ali: Good news to hear. So I was trying to figure out a topic because every topic we do at the podcast, The Voice of EB-5, is quite different. But I thought there's a lot of discussion, especially in our panel around the Indian client, and I thought maybe you can elaborate a little bit more about what you're seeing as a market trend. Is it mostly families or H-1B people that are filing these EB-5 petitions?
Jay: Shill So what we've seen is it's always, I would say maybe 80 to 85% of not only our clients, but I think in general our students, the family only gets added on if there are siblings that are under the age of 21 and can qualify under one application. Sometimes. We've also seen two applications for two kids because none of the parents want to take the responsibility or take the burden of a green card. They rather have two separate investments for their kids. So majority has always been the children.
Ali: So most of the folks are currently in the US when they're applying.
Jay: Yes, I would say about 60% of our applications are from within the US that are either on a student visa or an H-1B visa, something like that. Yep.
Ali: So if they're already in the US, are their parents reaching out to you in India? Is that what's going on?
Jay: Yes, we have our marketing sources as well as references that really count for us, and we usually get the parents reach out to us and then we speak to them as they are going to be the decision makers. The only input, really I would say that the student would have is that they do wish to stay back in the US and then the parents figure out how that happens.
Ali: I see. But the parents aren't usually the ones changing their domicile, are they?
Jay: No, not really. You see, there's a lot of things to consider: structural investments, tax investments. All of these things need to be considered when the parent is going to be on the application. So they'd rather not get into all of that. And they're really doing it only for their children.
Ali: That makes complete sense, Jay. As soon as they become subject to US taxes, things change.
Jay: Absolutely. And they would rather not have all those changes then put themselves on for a green card.
Ali: So what you do is you do a lot of tax planning as well, I bet. Right.
Jay: So we have partners that assist with tax planning. We're not really a professional tax advisors, so we cater to all our clients tax needs to our partners in India.
Ali: So a lot of the folks that I meet in India, we had a great event there. Thank you for coming and being a partner of the big event. I appreciate it. So you sponsored the event and you noticed that the people that are coming are from all over the place. But the a lot of the finders in the agents folks you compete were noticing a lot of it is very dispersed into different groups. It's either financial advisor who's helping or a real estate, someone who sells real estate or maybe someone in educational placement. And there isn't like the master agents you would see in China, is that correct?
Jay: That's absolutely correct, Ali. There are a lot of individuals, there are a lot of small firms, and then there are a lot of organized firms as well that are doing this.
Ali: Why do you think that is? Like why in China? Is it that an agency has 1000 or so employees and in India you see it more of a I almost want to say like an insurance product, a little bit more closely monitored, a little bit more hand-holding, a lot less of just like a product. Is there something in the Indian culture you think that promotes that or?
Jay: I think there's a lot of ambition in Indians. I think there's a lot of ambition and a need to earn an extra buck or own some more money. I think if people have a contact, have a reference, they don't mind handling this themselves. And I think that's what it is. You have a lot of individual agents that come through because they think they have one client or two clients that may require this need. It's also Indians like to know everything that's out there, right, so that they can click onto it anytime something happens or anytime someone references a conversation. So they come for information for education and then hope to create business out of that.
Ali: I see. That's interesting. The other thing I noticed while in India is Mumbai seems like an amazing place, very centrally located you can get. But when I went to Delhi, it was a little spread out and. I actually talked to a few regional centers and they were all over the place. One of them was in Bangalore, one of them was in Hyderabad. What do you think is the concentration of the parents? Obviously here we're talking about, but where is the concentration of the people living that would be interested in this stuff outside of Mumbai? Do you think there's more cases out of Bangalore, Hyderabad or Delhi?
Jay: I think Delhi is bound to have the majority of cases. I think it's Delhi, Mumbai are pretty much up there. I do see Bangalore and Hyderabad as a good market as well because there's a lot of IT firms there. So since we are spread out in our firm amongst four of the different Tier one cities that branch out into the Tier two cities in their region, we actually get clients from Mumbai, Delhi, Gujarat and as well as Bangalore and Hyderabad. So we have our offices located in such places where we pull in investors. There could be a handful of investors in a small tier two, Tier three city as well. So we like to get into that as well since we have the infrastructure.
Ali: So generally speaking, I'm on to something here, right, Jay? There's a trend among the cultural differences like the Gujaratis and the Marathi. They like the US, the Punjabis, maybe lean towards Canada.
Jay: So we've seen Punjabis typically tend to go towards Canada. Sindhis and Muslims tend to go towards the European nations. We've seen, of course, Gujarati and Marathis both go for the US just in terms of business expansion or in terms of settling their kids down there.
Ali: And is there a reason you think is that is it because there's more Punjabis in Canada?
Jay: I think it's got to do with maybe that. Early on Punjabis, you had migrated to Canada, Gujaratis had migrated to the US. If you know the Patels in all over America, that's from Gujarat. So I think that's been a trend that's been following since all our ancestors have moved their families to the US. I think that trend is decades old and I think it keeps going on and keeps getting passed on.
Ali: I wanted to tell you, listen to the Voice of EB-5 the difference and maybe Jay just educate them a little bit about people may not know, right? These are states.
Jay: Yes, these are states in India, Gujarat, Maharashtra, Karnataka. These are all states in India. So in Gujarat you have Ahmedabad, which is a tier one city. You in Maharashtra, you have Mumbai and Pune, in Karnataka, you have Bangalore. So yeah, these are all states. And then their respective cities in those states that are a market for investment, immigration.
Ali: So how about the Calcutta folks? Are you seeing any movement from Calcutta coming in?
Jay: To be honest, no, Ali. We haven't seen much from Calcutta towards any of the investment immigration programs.
Ali: Is that because of the wealth of a city or is that just because of the nature of the people that are there?
Jay: I would assume that's the nature of the people. Calcutta also hosts a whole bunch of big industrial families, so it's usually where these families pass on their companies and their estates to the younger generations in their family. So I don't think any of them would be interested in global taxation, for example.
Ali: The other thing I kind of want to mention is the currency. So right now, when the appreciation of the dollar recently is, it made the demographic smaller. I know the price increased 800,000 and then you had inflation. Has that really hurt the market because it's a soften the market because of the price point?
Jay: I think the 800,000 has definitely softened the market because it's taken the product to a higher league, so to speak. People that can afford all wish to invest at the 800,000 level do not really consider a minor change of maybe two or 3% in the dollar appreciation in the year that they're doing it. Yes, it is always a topic of discussion and they do always want to save those few 100,000 rupees or so here and there. But I don't think it's a major hindrance to an application. It would be a major hindrance to an application only if someone is really using all of their life savings into the 800,000 dollar investment and really has nothing to spare for any contingencies that may come along with it.
Ali: So on that topic, Jay, are the families that are investing, I mean, you get to see the net worth, right? You're privy to the net worth and what these guys have in assets, because that's part of the application is knowing what their assets are. Are you seeing people, including the real estate involved? Are you seeing folks that are like 3 to 5 million in net worth, 5 to 7, 7 to 10, 10 to 12, 12 to 15? Wouldn't that net worth are you seeing mostly here, including other illiquid assets?
Jay: I think it would be fair to say about 7 to 10 million.
Ali: So including the equity in. Their homes.
Ali: And the equity they have, the typical investor is probably worth 7 to 10 million.
Jay: And upwards. I would say that. Yes.
Ali: And what do the parents do in this? These typical investors, are they executives of companies in multinational companies or are they business owners? What is the demographic here?
Jay: It's exactly as you mentioned, Ali. It's corporate professionals, the C-level executives, the head of a bank or head of a consulting firm or partner at a consulting firm, partner in a law firm, that category of professionals. There's also very few businessmen that we've seen wherein they are either selling off their business or their second generation is not interested in holding the reins of their business in the future, and hence they are settling their kids abroad. We've also seen a lot of professionals from the banking and finance industry that take up this option.
Ali: So before I ask you about your role and your brother's role, which is going to me because I believe I like family businesses and I know you guys have a family business. Before I get into that, I want to focus on one other aspect of this affordability. There's a vast range of salary I see in India, you get the minimum wage, call it $150 a month, and then you have these uber rich people that are there. Am I right to say that there's a wider range of salaries in India then, like Vietnam and China?
Jay: Yes, I would definitely agree with that. There's a much wider range of salaries here in India. There also are many levels of hierarchy in a corporate firm that people can move up the ladder in. That's also got to do with the different levels of salaries that we one have.
Ali: So in India, are you born into wealth or can you make it is a class distinction based on parents or can someone have the chance to go up the rankings in India?
Jay: I think someone definitely India is a land of opportunity and everyone says that India is the place to be in the future as well. But I think to your question, there is a lot of opportunity for one to the saying goes, rags to riches. I think there is a lot of opportunity in India to go from rags to riches, and there are so many examples in India of the same. I would definitely think it's possible for someone from a lower income class to make their way up and reach the higher end.
Ali: So it's become more of a capitalistic society, correct?
Ali: Is education free there or do you have to pay for it?
Jay: I think in the government schools, it's it's I think it's free or it's a very nominal cost. But the private schools will charge a bomb. Yeah.
Ali: I see. But you see people from the public sector, public high schools having the same opportunities to get into a college or to to advance.
Jay: See, I didn't study here in terms of my higher education. So no, but I do think that for your primary and secondary school, there are various boards, so to speak, that provide education or these educational boards that we have. So I guess some of them cater towards the lower income class, some of them cater to the middle income class, some of them cater to the high end. So I think it's all dissected into that.
Ali: This is actually my second visit this past time, and I really, really enjoyed it. And everyone is super nice. I love the culture and the people and I plan to do more traveling and coming to all the India events because it started growing on me. The one thing that kind of bothered me the most was the air pollution. Are you seeing that people want to move out of Delhi? And I'm not sure if Mumbai has the same pollution, but Delhi, I could barely breathe. So are people leaving because of the pollution? I mean, is that another reason besides the kids?
Jay: So we've got a few of our clients that have enquired and even transacted with us for environmental reasons. So yes, I would say yes to that. There are a lot of people that are now getting frustrated with the low level of clean air that they have on a daily basis, and hence that's one of the requirements to leave. Yes.
Ali: You've heard that actually from your clients.
Jay: Yes. There's a lot of dust and a lot of pollution. And that's the major reason for this.
Ali: I see. And what other immigration programs are you seeing for maybe not the folks that are 7 to 10 million, but what else do people like to do if they're going to leave? Is there a second favorite program?
Jay: So we're seeing a lot of popularity in the European regions of Portugal and Greece. And we're also seeing popularity for Canada and UK, which are at much lower investment amounts.
Ali: Okay, So the UK is is actually popular there.
Jay: Yes. We cater to the skilled worker visa with an investment as well as the innovator visa where one can invest close to about to one or £250,000 into an existing business or into a startup business and get an immigrant visa.
Ali: I see. And that's freely available. Or is there a quota to that?
Jay: I believe it's freely available, yes.
Ali: And that's two fifties, the minimum.
Jay: £250,000. Yes, that's the minimum.
Ali: And what else other than that, are you seeing Ireland at all?
Jay: No, honestly, we haven't seen Ireland. Also, I do believe Ireland has a pretty high investment amount, if I'm not mistaken. But we have not seen much traction for Ireland. No, I would say Portugal is a close second after AB five. I think a lot of people love Europe and want to live with the European lifestyle. So I think Europe, we have transacted now a lot of business for Portugal per se, and it's always been to do with a better standard of living or a higher standard of living.
Ali: So maybe a lower income, correct? I mean, a lower net worth goes to Portugal.
Jay: Not necessarily, although the investment amount is significantly lower than EB-5. I think, again, the category of people that have exposure to Europe and have exposure to that lifestyle will still end up being in the higher end of the income category. The others, I would say, would be looking for job opportunities in such countries.
Ali: So you see it's less about how much money they have, more about their inclination to live in Europe versus the US.
Jay: Exactly. Live and travel, Yes.
Ali: Oh, that's interesting. But the students, I mean, obviously, it seems like us is kind of the first choice for education.
Jay: Yes, absolutely. In fact, when we talked to a lot of parents and they are still discussing on where the kid is going to go, US is always one of the options.
Ali: Awesome. Let's shift gears a little bit. These are great cultural questions and I think the people would love to actually. Obviously, there are a lot of developers and regional centres, new ones getting in the market and they really listen to this podcast and learn a lot. So shifting years of your company, how many of you guys are there? Is it just you and your brother and dad on the business or is there more?
Jay: We actually have a bunch of offices all around India specific to our-- so, you know, to give you a bigger background, we've been in India since the past 35 years. We've been doing foreign exchange and equities since then. We started in the immigration space about six years ago in 2016 with a team of eight and now we are about a team of 11 that are catering to this space. In my family, it's my dad, his brother, his son, and then my brothers as well. So five of us.
Ali: So your dad and your dad's brother and your dad's, you're basically your cousin and your brother or part of kind of the leadership of the company?
Jay: Yes. My uncle handles the foreign exchange side of the business of our family business. He's always in the know of everything and has referred many clients from their database as well.
Ali: So you guys do foreign exchange trading?
Jay: Yes. So we are actually one of the oldest foreign exchange brokers for bankers for for banks in India. That's about a 60 year old, which we purchased roughly 35 years ago.
Ali: That means someone comes in to buy euros or to buy another currency.
Jay: So it's two aspects to it. There's a wholesale forex, which is done only between banks, and then there's a retail aspect to it, which is an over-the-counter money exchange for, let's say, you coming down to India and you want to convert your dollars to rupees, or for someone that's traveling abroad to Europe or something we can definitely assist with with their foreign currency requirements.
Ali: That's interesting. So is that help with the transfer of the currency for the source of funds at all?
Jay: That's a separate category of a license that's required. So we don't cater to remittances for such kind of investments, although we do cater to remittances for student fees that one needs to pay in the US or the UK. But because of our relationships with several banks in India, we do get a preferred foreign exchange rate, so to speak, for our clients. So that's the only amount of assistance that we provide to our clients for their EB-5 or any other transaction.
Ali: From start to finish with these clients. Are you seeing it taking from the time they start enquiring to the time they make their investment, transfer the funds? And is that like a six month period or a year?
Jay: It's actually a very wide range. We've seen transactions happen in as little as a month, whereas we've seen other transactions that can take anywhere about one one and one half years simply because of the intent of the client. That matters a lot. Also, the remittance restrictions that India has to send money abroad. That is a pretty big hindrance to any B five application. Each Indian is limited to remitting only about 250,000 USD per annum or per year and per family member. And then there's also hindrances with who can gift who money specifically abroad. But that gets a little too technical.
Ali: Very, very cool though. Good information. J Appreciate you getting on this call and we have a lot of listeners out there and you're one of our favorites out there and you're coming to Miami, hopefully.
Jay: Yes, absolutely.
Ali: Thank you. This podcast is going to be published before you come out there. So is there any message you want to kind of give to developers or regional centers looking to come out there and talk to you? You guys can be quite popular with the developers and regional centers. Is there any kind of advice you want to give to them or any words of wisdom?
Jay: Absolutely. So I'll just introduce ourselves. We are FRR Immigration, migration agents in one of the largest immigration by investment markets, that is India. We've assisted over 100 families and raised over $50 Million in the several programs that this space offers. I would say a few things to look out for amongst Indians is that Indians love to ask questions and they will love to go into any detail regarding the project, regarding the financials of the project. So to have all those answers and information ready for them once someone decides to move forward, they would most definitely do that instead of and not waste your time or their own time. Indians love due diligence as well, so that is something that is key to them. So please do have all the information available to them at a moment's notice. Some Indians we've seen do also like to go down and visit the site of the project. So do have that available for them as well.
Ali: Thank you, Jay. Really appreciate you being here on this podcast and look forward to seeing you and your father and potentially your brother with us, too. So take good care and we'll see you in January.
Jay: Thank you, Ali. You, too. Look forward to seeing you soon.
Ali: This has been the voice of EB-5 by EB-5 Investors magazine. To learn more about the steps, so please visit www.EB5investors.com/podcast to stay up to date with the latest EB-5 discussions. Be sure to subscribe to the show wherever you listen to the podcast and if you like the show, please consider leaving us a five star review. It helps us out a lot. See you next week.