UK vs US: How their investor visas stack up

The United Kingdom has decided to scrap its ‘Golden Visa’ while the United States may soon be reopening and extending its own investor visa, and the timing could not be any better. While Indians have expressed interest in both, it is the United States EB-5 program that has been the more desirable route for Indians for several years.

The primary difference between the British and American programs is the price tag. The minimum investment requirement for the UK Tier One Investor Visa is currently around five times that of the US EB-5 Immigrant Investor Visa Program. The UK program starts from £2 million ($2.7 million). Still, it can go as high as £10 million ($13.6 million) if the investor wishes to reduce the length of time before applying for permanent residency. That contrasts significantly with the EB-5 Visa program, which is currently has a minimum investment threshold of $500,000.

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The price of the UK investor visa meant that it had attracted little interest from India. Indian investors and their families only account for around 3% of the total recipients of UK investor visas, and just a handful relocate under the scheme each year.

Conversely, demand for the EB-5 investor visa snowballed in the previous decade, and Indians became the largest single applicant group by 2019. Each country is allotted an annual quota of approximately 700 visas per year, and India has teetered close to that limit.

There has always been vocal opposition to the Golden Visa program in the UK, especially because of the perception that it was a route for wealthy individuals to launder their money in the country. The move to scrap the program comes at a time of heightened tensions with Russia. Russian investors are among the top applicants of the UK investor visa groups worldwide (second to China).

While the US program has not been without its controversies, its reputation has been helped by the fact that the US authorities ruthlessly scrutinize an investor’s source of funds. Our attorneys spend a long time piecing together our Indian client’s finances to ensure everything comes from legitimate sources, such as salaries, dividends, property sales, etc. Even the source of inheritances and gifts must be traced and documented.

Another stark difference between the programs is job creation. The US program requires each investor to create ten full-time jobs. Since its inception in the 1990s, the EB-5 program has helped create hundreds of thousands of jobs at no cost to the US taxpayer. This can, of course, be tricky. For example, under the Direct EB-5 program, an investor must prove that they hired at least ten employees. Failure to do so may place the investor’s Green Card at risk. However, an alternative route called the ‘Regional Center’ program can mitigate this risk.

Regional Centers aggregate investors into job-hungry projects such as hotels, warehouses and construction and are permitted to use a more generous job calculation matrix. This all combines to make compliance easier, provided the investor has conducted due diligence on the Regional Center and its project. As a result, more than 95% of investors opt for the

Regional Center route over the Direct route in a typical year. However, the Regional Center program has been on hold since July. It requires an act of Congress to reauthorize it, but this is expected to be within the next few weeks (although there are no guarantees).

Reauthorization of the Regional Center program may come with an increase in the investment amounts. Unconfirmed rumours suggest this could be increased to $750,000. This is still markedly less than the UK program but would represent a significant jump for many aspiring Indian applicants. Unlike what we see with the UK program, the typical profile of an EB-5 applicant are hardworking families seeking a Green Card for their children’s studies and work prospects.

Since the Direct EB-5 program is currently open at $500,000, potential applicants need to weigh the pros and cons of investing now under the known rules or waiting for the potential return of the Regional Center program with a possible price increase.

While the end of the UK investor visa may be felt in places like Russia, it is unlikely to trouble very many in India. Indians have long recognized the relative cost-effectiveness of the EB-5 Visa program, and a sharp increase in applications in the US program is anticipated if the Regional Center program is reinstated by Congress next month.

ET Online

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