EB-5 seekers spike, shorter route to US gets longer

Before costs double next year, number of applications from India rises fourfold

Hopes of obtaining an EB-5 visa in a short span could soon be a thing of the past with the latest data showing Indian applications for the visa have swelled, thereby doubling the average waiting-time.

Enjoying high growth, visa facilitation companies specialising in the programme are looking at wheeling in wealthy clients sooner now with the added warning that costs are also set to rise.

Latest estimates by the US Citizenship and Immigration Services show the number of Indian applicants jumped from 300 last year to over 1,200, industry sources said. India breaching the annual national quota of 700 visas is likely to double the average wait time for an applicant to receive temporary residency approval from the current two years to four years, they added.

The EB-5 visa promises foreign citizens a faster route to permanent residency in the US, provided they invest the one-time stipulated amount (more than ~31 million) in a government-approved EB-5 business or create 10 full-time jobs in the country. A total of 10,000 visas are up for grabs every year with no country allowed more than seven per cent of all visas, or 700 slots, in the first instance.

“During the 2017 fiscal, 587 Indians applied for EB-5 and as of October 2018, there are over 1,200 Indian EB-5 applicants in the queue. This is the result of more and more Indian citizens getting frustrated with H1-B and choosing the investment-based EB-5 visa programme as a more assured path for the entire family to immigrate to the US,” Ashish Saraff, Managing Director, South Asia & Middle East, AVG America Investments LLC, said.

The long free category, is set to be beset with visa backlog, possibly amounting to about 1,7002,000 visas soon, according to the AVG. Demand from Tier-III towns such as Jalandhar, Pune and Rajkot will add to this. “We believe the backlog could be as high as five years by the end of next year. China has a backlog of over 15 years. So the time to act is now,” Saraff added.

Indians have been the fourth largest applying nation behind China, Vietnam and South Korea and have invested above $120 million in the US through the programme. However, it still trails China, which remains on the top of the list. Over 8,000 Chinese nationals applied for the visa last year.

Costs to set inflate

The latest development comes at a time when the current $500,000 price tag for the visa is awaiting a long overdue increase to a round million dollars, set to be instituted by US lawmakers early next year.

“Investors should be taking the upcoming December 7 EB-5 programme expiration deadline seriously because not only is it clear that the demand for EB-5 visas will exceed its supply for Indian nationals, but also the investment amount may well increase due to regulations likely to finalise in December,” Vivek Tandon, CEO & founder of EB-5 BRICS, said.

According to a recently released statistics by the Invest in the USA (IIUSA), the national trade association for the programme, Indians currently comprise the second largest market in the world with 587 investors and the third fastest growing market globally. The approval rates for the visa category in India has hit 87 per cent vis-avis only 65 per cent in 2016.

“On the other hand, investments from China have decreased by 20 per cent, following a 19 per cent decrease in FY2016,” it said. China represents 8,771 investors a year, or 77 per cent of the total FY17 investor market, whereas at its peak, the figure was more than 90 per cent.

The EB-5 visa is not expected to be an alternative to the H-IB visa programme, through which most Indian technology majors send employees to the US. “While a clampdown on temporary work visas used by information technology professionals has continued since the Donald Trump administration took charge, it will not be feasible to source employees through the EB-5 since it would be too costly,” a senior government official said.