Hello EB-5 investors. This is Floyd Mitchell with the EB-5 Investor Portal; the leading resource for information regarding the EB-5 visa. I publish articles based upon my interviews with leading US immigration attorneys and other EB-5 professionals which are produced as podcasts to educate EB-5 investors. Our podcasts are syndicated around the world on search engines, social media, YouTube, Google Podcasts and our own Apple News Channel – “EB5 Investor Portal”.
So, this is not a forum, or a blog post based upon personal opinions or experiences. It is information taken from my many, many hours of interviews with licensed immigration and securities attorneys, securities professionals and others.
I have had the pleasure of interviewing immigration attorney, Swee Shankar of Shankar Ninan & Co LLP. Swee brings a wealth of experience in Immigration and Nationality laws and is an active member of the American Immigration Lawyers Association, New York City Bar Association and the American Bar Association. Swee assists corporations seeking to hire foreign professionals or skilled workers and also assists corporate clients with transferring personnel to company branches within the United States. She also advises clients in U.S. EB-5 investor visa applications.
We covered a range of topics — Are there issues applying for EB-5 for investors from India?, What is the EB-5 process? What is the EB-5 timeline? What is legal source of funds? Do I need an attorney for source of funds? Are there capital restrictions from India? How do I pick a good regional center? What is a direct investment? What is removal of conditions? How do students apply for the EB-5 visa? How do I pick a good regional center project? What are red flags when looking at regional center projects?
This is one of three articles in which we will cover some of these topics in this article. Read more in upcoming articles.
I started by asking about the most common question Swee hears from EB-5 investors from India and it turns out there are several. Swee said:
“Most people want to know, of course, when they’re going to get their money back. But when we really start getting into the process, I think my client’s biggest concern is how to get all of their money here. And the differences between investing in their own businesses versus a regional center. And, which one is more beneficial to their interests”
What we were really getting to was that there needs to be a plan. An ‘immigration plan’ for each investor which is suited to the individual’s needs and immigration status. I have heard this over and over again and it is true! US immigration law is rigid so you need to plan and get it right – and that starts with having qualified EB5 immigration counsel on your team. You need to have a firm which provides the right mix of services, so I asked Swee what an investor should be looking for.
“When it comes to their immigration plan, we really take care of them from the day that they come into my office to the day that they get their green card. So, I will discuss with them their immigration status. What status they’re on currently. If they’re not in the country, the best way to get them here. The best routes for them to take. Of course, sourcing of funds is a huge issue. Regardless of who you are you need to be able to source your funds. And, also importantly, on to that topic, really just how it makes sense for them to come here. Bring their money here. Who can come in under, with them. Their spouses, their children. And the best route for them to take. We’re here when they need help with anything from business plans. We can help assist or talk with other vendors that we have, to help them get connected. And then, we also help once we file the I-526. If there’s any queries that come from USCIS, which is called a Request for Evidence. We’re there to assist with the entire Request for Evidence process. Provide all the documentation that they ask for. And respond to that. And usually after the I-526, there’s other steps. We help them with the next step, which is adjusting their status to actually get their green card. And we get them their adjustment of status. They get their temporary green card. And much longer down the road, we help them remove the conditions of their green card to get a permanent green card.”
Swee deals with many Indian investors so I wanted to know whether there are particular issues that tend to commonly arise, or challenges that come up for these investors. We discussed fund transfer issues from India, source of funds issues and how source and path of funds should be managed. We also discussed the correct strategies for handling these issues.
With respect to fund transfers, she advised:
“In India, you can only transfer $250,000 per person per year. So usually that’s dealt with pretty easily, because most people will have a spouse, or a child, a family member. Someone that can transfer half of the money. And then the investor will transfer the other half of the money. Okay, so that’s not too much of an issue here at this time where the investment amount is $500,000. Some other issues that we have is just, how do you source the funds? What can you do to really go all the way back and trace where that money came from. So we help with each of our clients to really go back and be able to show where all the money is coming from. So, that’s a big thing, too”.
I wanted to dig further into source of funds and hear some of the scenarios that are challenging for her and what USCIS is examining for getting source of funds approved for investor clients from India. It turns out that one of her main roles as an investor’s immigration attorney is to help them prove source of funds – to help them prove that that investment amount was obtained legally.
“We’ve actually seen, recently, that USCIS is really questioning source of funds. More so than they ever have. So USCIS will go as far back as possible to source funds. Therefore, it’s very important to have a trail of where your money is coming from. Anything that is done, must be on paper. So, for example, if the money is received by sale of property, let’s say. USCIS will ask, not only the proof that the property is owned by the investor, and the purchase sale agreement evidencing the sale of the property. But also, where the investor received the money, in the first place, to buy the property. So, they’re going all the way back as far as they possibly can. This always leads to more questions. Another way you can get sourcing your funds is, let’s say, the investor has a successful business wherein he received enough funds to buy the property. If he is employed, did he just save up his paychecks to buy the property? Or was the property gifted to the investor? Either way, regardless of which way he got the money to purchase the property, the trail of the money is what’s important. And we have to show that, we’ve seen in recent RFEs, (Request for Evidence from USCIS) that they’re asking us to go as far back as humanly possible to show where the money came from to buy the property. And then that the property was rightfully that of the owner; the investor. And then that the property which was owned by the investor, has now been sold to a third party. And the money given from the third party to the investor, and that money going into the investor savings account. Which is then being transferred to the United States”
Swee was of the opinion that if you cannot show clean source funds, it is not even a good idea to go the EB-5 route. That said, like everything in EB-5, it is my opinion that you need to first consult with immigration counsel to see if there is a lawful path! I have heard of many creative solutions for proving source of funds that passed approval at USCIS.
How about moving the funds or investing funds you will be using for investment capital prior to making your investment? Well, source of funds is important, but path of funds is important too! Swee had advice for investors who may be planning for EB-5 and suggested that they don’t do anything with their money before speaking to counsel.
“I definitely think that you should, anyone thinking about doing this, should come in and speak to an attorney before they do anything. Because, I think people read a lot on forums and different websites. And think that A, B and C is possible. But you don’t want to get yourself in a predicament where now you can’t move your money back to where you want it, and you’re violating whatever regulations in whatever country you’re from, without speaking to someone first. So, I would definitely advise that anyone seeking to invest in EB-5, come and speak to an attorney, or come and speak to me before they do anything and move forward”
And there it is – blogs and forums. Blogs and forums are for sharing opinions and personal experiences which may or may not apply to your situation. Great for planning vacations but not for immigration advice! Leave that to professionals.
We talked more about capital restrictions in moving funds from India to the U.S. since that is an important part of the process. I knew that a husband and wife team can each move $250,000 per year, out of India and into the U.S. however, I wanted to know if there were other details or requirements or restrictions around that. How about a situation where the husband has the necessary funds and profits in his company? Would he write a distribution check to himself and also write one to his wife? Or vice versa. Swee advised that:
“That’s exactly how you would do it. But you have to make sure the correct documentation is in place. So, for example, if you’re a partner of a company, you have to have board resolution from your company stating that this amount of money is okay to be given to the investor for this purpose. And that’s a simple document, you know. That’s not hard to do, at all. And then you can also say the same thing as for the wife. And then once both of those people have the money, they can then individually transfer it to the United States”
The current investment amount for projects in a Targeted Employment Area is $500,000. However, there are a lot of people talking in the industry, and a lot of chatter on the internet, about that going up to maybe $800,000 or even as much as $1.3M. I wanted to know how this would this impact that $250,000 per person currency restriction that’s currently in India.
“Well, for Indians, they’re going to have to find another family member who is willing to transfer the money to reach the new capital contribution. So again, if you have the investor transferring 250. Now the spouse is transferring 250. Maybe you have an aunt or an uncle, transferring the other 250. You’re going to have multiple people transferring the money”.
I wanted to further discuss the different ways an investor can put together the $500,000? and in doing that, what are the supporting documents needed? Are they tax returns, payroll records?
“It really depends, again, on how the investor has the money. So, has he saved it from employment? Does he own a company? Did he buy and sell property? The documents needed really, would be based on those questions. But generally speaking, we’ll need to trace the money as far back as possible. So, for example, if the investor owns a business, the USCIS, the same thing with the property example earlier, can go as far back as to say, “How did the investor obtain the money to start the business in the first place?” So, then you’ll have tax returns, financial statements, pay stubs. All that kind of stuff to show revenue in the company. And, of course, most importantly, you have to be able to prove the investor has ownership in the company, and rights to this money. And again, the board resolution allowing the company to loan or get the money to the investor for this investment purpose”.
I wanted to know how investors can start planning before meeting immigration counsel and was there specifically anything she could recommend before a consultation to make life easier for all? Let’s say they have 3/6 months to prepare, what can they do?
“They can definitely start even making a flow chart for themselves. Okay, here’s my $500,000, how did I get it? Go back as far as they can, to see where that money came, and to really be able to see whether they’re able to prove that through traceable funds. Do they have evidence to prove every single step of the way? Also, if you’re overseas, you have to make sure that you have a way of bringing the money to the U.S. – Again, $250,000 per person per year. So do you have a spouse that’s willing to bring the other half? Or do you have another family member? And then, lastly, they have to determine how they want to invest their money. Whether it’s a Regional Center or a direct investment”.
Well, we thoroughly covered a range of topics! I am happy I was able to share to share what I think is great advice, guidance and strategies for EB-5 investors. You can hear the full podcast by clicking on the following link which features the podcast series on the EB-5 Investor Portal https://www.eb5eb5.com/eb-5-podcast/.
