In today’s globalized economy, individuals and businesses often seek opportunities to invest and expand their financial horizons beyond their home country’s borders. Three key elements come into play when venturing into foreign investments: the EB-5 visa program, the Foreign Exchange Management Act (FEMA), and the Liberalized Remittance Scheme (LRS). In this blog post, we’ll explore how these components intersect.

The U.S. EB-5 Investor Visa Program has become a popular tool for wealthy Indian families looking to migrate overseas. As construction capital became harder and harder to come by in the wake of the 2008-2009 financial crisis, the EB-5 program quickly emerged as a viable alternative channelling much-needed foreign investment into projects throughout the United States.

The most transformative shift in the program’s trajectory has been its focus on rural investments. While urban megaprojects were traditionally the more attractive bait for foreign investors, the RIA swung the pendulum towards rural projects as investors are now offered “Priority Processing” for projects located in rural areas.

The visa program provides an opportunity for qualified investors to obtain permanent residency in the U.S. by investing in a local project that creates at least 10 full-time American jobs. The current investment amount for projects that are in a rural or targeted employment area (TEA) is $800,000

However, an EB-5 investment is complex and has several moving parts and is a complex maze of EB5, FEMA (Foreign Exchange Management Act), and LRS (Liberalised Remittance Scheme).
An application under EB5 requires you to follow US immigration laws. That said, you are still an Indian citizen and will continue to be so for the foreseeable future. Therefore, complying with Indian laws cannot be overlooked.

Under the LRS scheme granted by RBI, an applicant can take out only US$ 250,000 per person per financial year. The investment value under EB5 is however US$ 800,000. Also, you need to plan your income taxes because of the global taxation regime.

In addition to Indian regulation and seeking approval from RBI, there are risks one should watch out for. If these risks are not understood or managed well, it could lead to a denial of the green card by the US authorities, loss of capital invested to get the U.S. #EB-5 #visa, or in the worst case, both.

The above blog is a bird’s eye view of the #FEMA and #LRS aspect in EB-5 scheme
We at Sriya Enterprise are available for all your queries in reference to #FEMA and #RBI #TradeFinance #compliance related matters.
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