The United States government raised the EB-5 visa minimum investment from USD$500,000 to USD$900,000 in November of 2019. When the increase was announced, this $400,000 spike seemed drastic to many potential EB-5 investors. However, this investment increase was a logical and necessary action on the part of the United States government. There have been no increases to the investment amount at all – even in the face of steady inflation rates – since the creation of the EB-5 investor visa in 1990. It is likely the investment minimum would be equal to or more than the sum of the current minimum had the investment been risen regularly in accordance with inflation rates since 1990. The EB-5 investor visa was created to allow foreign nationals a pathway to US citizenship through American-based business investments aimed at stimulating the US economy.
Indian investors are being hit with more fees less than six months after the significant EB-5 investor visa investment increase. Information was recently released which confirmed that EB-5 investors from India will soon be required to pay a tax on their EB-5 investment. Beginning April 1st, 2020, there will be a 5% tax imposed on the EB-5 investment, totaling an additional $50,000 (for the minimum amount of $900,000). This tax is to be charged once the investment funds are moved to escrow in the United States.
If you are an Indian foreign national interested in applying for the EB-5 investor visa, here are a few tips in the wake of this news:
Apply before April 1st, 2020
The simple way to avoid having to pay this new tax is to apply for your EB-5 investor visa before the 1st of April. The EB-5 visa minimum investment is currently USD$900,000. This tax will bring minimum totals up to $950,000. This additional fee may not be easy to source for some applicants, especially so soon after the significant increase in the investment minimum. If you are planning to apply for the EB-5 visa, the time to do so is now. According to Mark Davies, Global Chairman, Davies & Associates LLC, “The changes to the tax on remittances is a reminder to Indians to carefully plan their tax position before making the move to the US”.
The EB-5 application process begins with the filing of the I-526, Immigrant Petition by Alien Investor, which is an extensive document that requires experienced knowledge to properly complete. Not sure you have all the information you may need? Take a look at some of the articles below to help guide you and provide you with more information.
- What is the EB-5 investor visa?
- Why is the EB-5 visa perfect for immigrants of all ages?
- Why Indian immigrants are turning to the EB-5 investor visa
- Why should you work with an EB-5 immigration attorney?
Diversify your funding sources
In that event that you are unable to complete your petition before April 1st, you should begin looking at your EB-5 funding sources. Popular funding possibilities are business and personal loans, business revenue, stocks and bonds, and inheritance. Ensure that you have wholly explored the funding options available to you in order to obtain the full investment amount needed. Your EB-5 investment funds do not all have to come from the same place. You can amass the funds from any amount of places once your sources can be verified. Each source will be scrutinized by the United States government to ensure that the monies received were obtained in a legal and lawful manner.
Although on its own the amount of the increase may seem significant, it only represents 5% of the total minimum investment amount of $900,000. If this amount is accounted for in the groundwork done during the organization of the EB-5 petition, gathering the additional funds should be a relatively uncomplicated process.
Explore the following EB-5 funding resources for more information:
- Can Business Revenue Help Fund My EB-5 Investment?
- Can I take a loan to make an EB-5 investment?
- Where can I source my EB-5 funds?
- Sources of Funding: Inheritance and Personal Gifts
Work with a reputable regional center
The key to navigating both the EB-5 investment increase and the upcoming investment tax is using an approved regional center. Regional centers are United States government-approved facilities aimed at connecting EB-5 hopefuls with investment projects. The EB-5 visa requires a vast amount of data on job creation, population statistics, and project financials, among other things. If you apply for the EB-5 visa on your own, you must choose your project and compile this information alone. Each project has to be verified by the US government and approved before an EB-5 visa can be issued. Misinformation or incorrect data is cause for the delay or rejection of an EB-5 petition. Regional centers are partnered with projects that are pre-approved as EB-5 eligible. Each project’s data is compiled and verified by the US government in advance – without any need for direct involvement by the EB-5 petitioner.
The use of a regional center helps improve the chances of a smooth application process and eventual petition approval. If you are interested in applying for the EB-5 investor visa, consider contacting a regional center for guidance. Other than the benefits mentioned, there are a few great reasons to use a regional center – click to read our 3 Reasons Why You Should Use a Regional Center article.
The EB-5 investor visa may be your answer to immigrating yourself and your family permanently to the United States. For more information on the EB-5 investor visa, regional centers, and how to make your American immigration dream come true, click here.