Abhinav Lohia, Director, South Asia and Middle East of CanAm Enterprises, in his tête-à-tête with The Pioneer shares his thoughts on range of issues related to business investment opportunity in the United States, and how CanAm has been on a roll in immigration through EB-5 visa. Here are the excerpts of his conversation with Vikas Kumar.
What is EB-5 Visa? What is the process of getting an EB-5 visa? What role does CanAm play in getting the EB-5 visa?
EB-5 visa is employment based fifth category visa that is why it is called EB-5. What it essentially states that if you invest a million dollars in United States and create 10 American jobs, you will get a green card. But if you invest in a under developed area or an area with where there is high unemployment then you are allowed to invest just half a million dollars. This money has to be well documented, the investor needs to show a proper trail, it should comply with all the laws and then you invest it in US and then that money is used for construction projects like real estate construction and all of that. We have been in this space for the past 16 years our role is to do proper due diligence on the projects because it is not only about investing, but we have to make sure that the developer of the project will not run away.
How is it different from all other visas?
EB-5 visa gets you a green card directly, you are not dependent on employer, you are not dependent on admission to a college or anything. This is direct, you are a green card holder, you are like any other US worker. You can start your own business, you can choose not to work. Unless you commit a crime, no one can just throw you out of the country.
What are the areas where we can invest?
The last 55 projects we have done were very diverse, we have done it in different areas like New York, Florida, Texas, California and these are a mix of commercial real estate projects, in public- private partnership, we have done naval shipyards. We have built the first private rail road in the state of Florida, we have done hotels, so it has been a mix.
What is the requirement of money to invest in the United States?
It is 500,000 dollars or right now 3.5 crore to 3.75 crore.
Nothing in the agricultural sector?
No, as agricultural is seasonal, it poses problems because the requirements for EB-5 is that you invest money and then you create 10 American jobs per investor. And if it is a seasonal industry it will be very difficult to create those jobs.
Does EB-5 visa allow an investor to hire people from his/her own country?
The jobs are for American; people with green card and they need to be citizens of America.
What are the trends that you have seen in the EB-5 industry, what are the investor trends that you have seen?
I have been a part of the industry for the last five years, and as a partner at a law firm previously I used to represent a lot of Indian nationals. So initially back in the day when I used to come to India there were not many investors interested in doing EB-5, there was not much knowledge. And the investors we used to get would be families, where entire family wants to move to US. Now the trend is changing because it has become so difficult to get H1-B visa etc., what is happening is individuals who are already in US on H1-B visa are also filing for EB-5 visa. Students who are studying there facing difficulty in getting H1-B visa, so they are filing for EB-5 visa instead. So now parents are gifting money to the children and only children are filing because you can only get a family based EB-5 green card if you are under 21, you cannot get it with your parents if you are over 21.
How do you see the Indian Market? Where particularly you see a lot of aggression when it comes to the EB-5?
There is a lot of rush from India market because there is a deadline to file these applications, that is December 7th. The last deadline was September 30th which temporarily extended to Dec 7. So, a lot of people are pushing to file before December 7. Additionally, there is an uptake in the number of applications because of the currency devaluation going on. So, if someone was considering applying for EB-5 just 3 months ago to whom who are considering now, their investment amount has increased to 30-45% because of currency devaluation. So, it is becoming more expensive for Indian nationals to file it. Additionally, because of the increase in demand, there is a quota for every country of 700 green cards every year and if a country exceeds that quota then they will have to wait for next year for the number of visas to open. So, that is also about to happen in India.
What are the industries that people are actually more interested in?
Most popular is real estate because primarily EB-5 projects are construction projects because you need to show creation of jobs. And in the real estate project you are building a hotel or something like that, it is easier to see construction workers and the spending.
If you would like to mention something every off beat like the shipyard that has been set up out there, apart from there if you would like to mention some other off beat projects that has created some jobs out there?
Off beat yes, the project we did with Philadelphia electric company, they did not use the money to build a power station they used it to overhaul their existing infrastructure. We built the first private rail road in the US and it was a big project. We raised 350 million dollars from 700 investors. So that was a different project. Usually you will find that everyone is building a hotel, but I am scared of hotel projects and the reason is that the valuation fluctuates like anything based on occupancy rate.
When we talk about other visas and EB-5, they all are going through a change and I believe EB-5 the investment amount is also likely to change what is the buzz around that?
So, EB-5 is different from other visas as I mentioned above, it is not dependent on admission in any university, there is no language, it is not about having employment in the US like H1-B.
Is there any education qualification required for this?
No education qualification is required, even children who are 18 years old and fresh out of school, they can also apply for it. Now, another reason for the uptake in the number of applications from India is that the proposed investment amount is going up from 500 000 dollars to 925 000 dollars, almost double. So, literally from 3.75 crores to 7 crores and it will become very difficult because there are multiple issues from India, yes, currency devaluation is one but RBI limits of remittance limit to 250 000 dollars per annum. So again, sending 1 million dollars from India will be a very big task. You will need 4-5 people as opposed to now a couple can do it. So, if the investment amount increases then the Indian market is falling by 80%.