Indian citizens EB5 Application must consist of two transactions that happen parallelly and need to be in complete sync. The two transactions are investment in the US and immigration in the US. Both aspects are equally important and while filling the EB 5 petition the three important aspects of the investment must be covered.
1. Project Due Diligence
An Eb-5 petition is dependent on the success of the project that an investor from India is planning to invest it. Hence, doing proper due diligence on the project is very important and must cover the below mentioned points.
- Projects Business plan
- Projects’s commercial success plan
- Project’s exit strategy
- The job creation model
- The developers track record
- Past projects completed
- The job creation and construction timelines
- The project management team’s expertise
- The developers own capital stack along with other capital stacks
As the project job creation and completion timelines may differ from the immigration timelines and could extend post 6 years, it is important to under the redeployment strategy of the project as well in case of a delay
2. Regional Center Due Diligence
Currently the US has more than 1200 regional centers, operational and non operational listed in the USCIS website, however, USCIS still clearly mentioned that an EB5 investment is a risk and the USCIS cannot minimise or eliminate the investment risk even though the RC is listen on their website hence along with project due diligence effective RC due diligence is compulsory as well.
The vetting process should include the verification of the credentials of the Regional centre along with their past track record. The number of applications filed in the past along with the number of approvals and denials. This could also include checking figures about the amount of money returned by the RC to the applicants.
As the EB-5 investment is treated as private placement of securities, the best person to guide an investor through is a professional dealing with US securities and investments. A financial advisor can may the due diligence more meaningful and accurate compared to other sources of information.
3. Immigration Due Diligence
While project and RC due diligence cover the investment aspect of the application, an investor will have to assess the immigration requirements as well.
Immigration due diligence should cover points like:
- Current procession timeline
- Cover topics like backlogs, retrogressions, risks of children ageing out
- Documenting the source of funds
- Filling in the applications
- Assessing if the project makes immigration sense and qualifies
Read: Sending money out of India- Source of Funds for Investment Visa
A few points to consider:
- Considering the differences in legal and business environment in the two countries, Indian nationals may benefit by inviting via the regional centres
- An immigration lawyer and an investment professional with a complete understanding of regulations in both countries would the ideal choice for Indian investors seeking comprehensive and reliable EB-5 due diligence.
- Investors from India must ensure immigration due diligence covers potential regulatory changes along with the expected timelines
- Due diligence must also assess potential complications arising out of ongoing and potential political, diplomatic, and security disputes between India and the USA.
- A significant challenge for EB5 applicants from India may be significant gap between on-paper and real valuation of assets like real estate and properties.
- Citizens of India will have to apply for the B1/B2 visitor visa to visit the US as a part of the due diligence process.
Having a single professional who is a financial/investment expert as well as an immigration lawyer carry out due diligence would be ideal since the financial, investment, and immigration aspects of the application will be analyzed and assessed simultaneously.
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