BUSINESS STANDARD: Immigrating to the US? Choose right project to avoid citizenship frauds

With the US getting stricter, more Indians are opting for the EB-5 visa programme, which allows an individual to become a citizen by investing $500,000 in an approved project. While the EB-5 programme is an easier route for emigrating to the US, there have been regular frauds in the past, and investors risk losing their money as well as citizenship.

Lawyers and consultants say that in the it is all about investing in the project that has the surety of getting completed and creating jobs in the areas around it. But choosing such projects can be daunting. “An investor gives money to an entity called regional centre, which invests money in projects. But the financing of projects by regional centres is done through complex financial structures. Many a time, an investor may not even get all the documents unless he asks for them,” says Mark Davies, global chairman, Davies & Associates, an law firm.

An investor has little choice but to rely on lawyers, consultants or advisors when it comes to EB-5 projects who understand state-wise real estate laws and can evaluate the finance structures to recommend whether the investor should go for a project or not. “Don’t rely on Indian partners of the companies abroad. Instead, opt for professionals who are licensed by the and have a track record,” says Vivek Tandon, founder and CEO, EB-5 BRICS.The lawyer or advisor should also have experience in handling Indian cases. When remitting money abroad, the advisor needs to ensure that it complies with the Foreign Exchange Management Act (FEMA). The FEMA regulations, for example, don’t allow individuals to remit abroad funds that are borrowed from banks.

Best is to ask for referrals of cases that the advisor or lawyer has done in the past. Talk to those individuals who have already been through the process.Preferably, avoid advisors or lawyers working with regional centres and receiving a commission from them. Ask your advisor in writing whether it receives compensation in any form from regional centres, developers or their parties related to them. A US-licensed fund, lawyer or consultant will need to reveal it.

There also are a few checks that an investor should do independently. Choose a regional centre that has a track record of completed projects. Many regional centres and developers get their projects evaluated from third-party independent sources. Ask for such evaluation reports. “If the project developer is listed, there will be much more transparency. There is a better likelihood of the project getting completed,” says Rogelio Caceres, co-founder and chief commercial officer, LCR Capital Partners.lawyers and advisors say that more Indians are looking at the EB-5 programme after the administration tightened  Most applicants include individuals who were already working in the US and are now affected by changes to the visa laws, and also Indian students who are finding it difficult to get a job after graduating from US colleges.


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