In a huge blow to Indians wishing to immigrate to America, the US government has hiked fee for EB-5 or the US investor visa.
Beginning April 1, Indians immigrants will have to pay an extra USD 50,000, when they move money to an escrow account in the US to fulfill the criteria for US permanent residency visa.
Created in 1990, EB-5 (Employment Based 5) gives investors an opportunity to become lawful permanent residents or 'green card' holders in exchange for making qualifying, job-creating investments in the United States. Investors need to invest at least USD 900,000 and create 10 American jobs, to be eligible for this visa.
The US government has put a 5% tax on the EB-5 visa, which would mean that applicants would have to pay an extra $50,000.
The EB-5 is one of the five employment-based (EB) preference programs in the US. In 2019, the US government had increased the minimum investment amount to USD 900,000 from USD 500,000 for Targeted Employment Area (TEA), where unemployment is high - the first time since 1990. The minimum standard investment amount was also increased from USD 1 million to USD 1.8 million.
"The changes to the tax on remittances is a reminder to Indians to carefully plan their tax position before making the move to the United States," Mark Davies, Global Chairman, Davies & Associates LLC, said. "People seeking to emigrate who do not wish to pay this tax at source and rather account for it later may wish to move their money ahead of the new rules coming into effect."
But Indians can start moving the money to an escrow amount before April 1, even if they have not put in their application. "It is possible to preemptively move money into an escrow account in the United States until such a time as they are ready to proceed with the emigration process," he said.