Professional Documents
Culture Documents
GREEN
EB 5
FOR INDIAN NATIONALS
CARD
CRITICAL KNOWLEDGE
FOR INDIAN INVESTORS WHO WANT TO MAKE THE BEST
DECISIONS FOR THEMSELVES AND THEIR FAMILIES
Vaughan de Kirby
and Kenton de Kirby
All Securities offered through
Investment Visa Consultants, LLC - Member FINRA/SIPC.
www.finra.org
“The Investor’s Path to a Green Card presents its important
subject with precision and clarity. This is a wonderful guide
for anyone wishing to become a permanent resident of the
United States through investment. If investment immigration
is in your future, you must read this book.”
–Alexis Neely – founder of the Family Wealth Planning
Institute, nationally recognized speaker and author of the
bestselling book, Wear Clean Underwear: A Fast, Fun,
Friendly - and Essential - Guide to Legal Planning for Busy
Parents.
GREEN
EB 5 CARD
FOR INDIAN NATIONALS
CRITICAL KNOWLEDGE
FOR INDIAN INVESTORS WHO WANT
TO MAKE THE BEST DECISIONS FOR
THEMSELVES AND THEIR FAMILIES
Vaughan de Kirby
and Kenton de Kirby
de Kirby Juris & Associates
INDIA:
Kundan Chambers,
Thube Park, Shivaji Nagar,
Pune 411005, Maharashtra
Phone: +91 20 412-82800
USA:
5139 Geary Boulevard
San Francisco, California 94118
Phone: 415-221-2345
Email:
info@dekirbyjuris.com
Website:
www.dekirbyjuris.com
www.eb5law.in
All rights reserved. No part of this book may be used or reproduced in any
manner whatsoever without written permission of the author.
Published 2017.
ISBN: 978-1-63385-186-3
www.wordassociation.com
1.800.827.7903
Table of Contents
I NTRODUCTI ON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
What you are reading is, at the time of this writing, the
most comprehensive consumer guide to the EB-5 program
available. Unlike my two previous books, this book—the
Complete Guide—covers both paths one can take in ap-
plying for an EB-5 Green Card: the Regional Center and
Direct Investment options. In the Regional Center path,
one makes a $500,000 investment in an approved Regional
Center. A Regional Center is an entity the U.S. government
has given permission to attract EB-5 investors. In the Di-
rect Investment path, one makes a $1 million or $500,000
investment in some form of new or restructured business,
which the applicant is required to take an active role in
managing.
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— Vaughan de Kirby
8
PA RT 1 :
The Regional
Center Path
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C H A P T E R 1 :
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The law set aside 10,000 new EB-5 visas per year. To obtain
a permanent resident Green Card, the original program
required a $1 million investment in a new commercial en-
terprise in the United States. However, the program also
allowed the amount of the investment to be reduced to
$500,000 if it was made in a “targeted employment area,”
which was defined as a rural area or a region where unem-
ployment was especially high (at least 50% higher than the
national unemployment rate).
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The Requirements
With this history in mind, let us go through the core re-
quirements of the EB-5 Pilot Program. The Pilot Program
retains all the major requirements of the original program
but it provides new ways of satisfying them. In general, the
Pilot Program lifts much of the burden off the shoulders
of the investor and transfers it to the Regional Center. It
is the Regional Center, and not the investor, who must to
create a qualifying business plan, get the business plan ap-
proved, establish a new commercial enterprise, create jobs,
and manage the business. From the investors’ perspective,
simply making the necessary investment in an approved
Regional Center will typically satisfy a number of these re-
quirements. However, the important thing to remember is
that not all approved Regional Centers are created equal—
far from it. What separates a good Regional Center from a
bad one is its ability to generate enough jobs per investor—
fulfilling the all-important job creation requirement—and
to generate enough revenue to return the investor’s capital
after the investor has obtained his or her Green Card. That
is why it is imperative, when choosing a Regional Center, to
make an informed choice based on the results of in-depth
evaluation. With that said, I now turn to the core EB-5 re-
quirements of the Regional Center path.
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At Risk Requirement
The law mandates that investor funds must be put “at risk”
to show that the EB-5 application is made in good faith. This
is to ensure that applicants are actually making legitimate
investments in the American economy, rather than merely
creating the appearance of wanting to make an investment.
For the Regional Center path, satisfying this requirement
simply means making the qualifying investment by trans-
ferring one’s funds to a Regional Center.
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Given what you have read about the history of the pro-
gram’s requirements, it will probably come as little surprise
that around 95% of today’s EB-5 applications are based
on foreign investments in Regional Centers rather than
Direct Investments in new, investor-run businesses. This is
not to say that the Regional Center program is necessarily
superior. There are investors for whom the Direct Invest-
ment path makes the most sense. It all comes down to the
individual investor and his or her particular goals. Some
want to start a certain kind of business, and they value the
control and potential profitability of the Direct Investment
path. Others are attracted to the ease, flexibility, and rela-
tive financial security of investing in a Regional Center.
22
C H A P T E R 2 :
An Introduction to
Limited Partnerships
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General Partners
Every limited partnership must have at least one general
partner. General partners are often those individuals who
founded the business. Overall, they have more control of
business affairs, but also more responsibility and liability.
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Limited Partners
Limited partnerships must also have at least one limited
partner, but most have more than one, and oftentimes
many more. Limited partners, by contrast, have less deci-
sion-making power but also less liability.
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Please do not feel that you need to commit all this infor-
mation to memory. The following information is offered
as a useful resource that you can return to as needed. As a
summary, I have included a table at the end of this chapter
that provides an overview of the various business types
and how they differ.
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Summary
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C H A P T E R 3 :
How Regional
Centers Operate
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2) Attracting investors
3) Developing a project
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C H A P T E R 4 :
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C H A P T E R 5 :
How a Regional
Center Is Evaluated
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• The Funding
• Job Creation
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Question 1:
Who are the principals of the Regional Center and
project developer and what are their professional
backgrounds and reputations?
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Question 2:
Does the Regional Center have USCIS
approval for the project?
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Question 3:
Where are the investment funds for the project
coming from?
Often, EB-5 investments and bank loans are not the only
sources of funds for the project. The Regional Center’s
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Question 4:
Does the Regional Center’s estimation of
development costs and spending appear
reasonable?
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Question 5:
Will the Regional Center be able to get enough
funding to complete the project?
Question 6:
What are the contingency plans in the
event of cost overruns?
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Question 7:
Does the project developer have the necessary
building permits and entitlements from the city
government to undertake the project?
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Question 8:
How has investment and project development
proceeded so far?
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Question 9:
Based on the financial model, what is
the estimated job creation?
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Question 10:
What is the investor’s place in line
for job allocation?
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Question 11:
How does the project developer plan to
pay back the loan?
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Question 12:
Where is the investor’s place in the
waterfall of loan repayment?
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C H A P T E R 6 :
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grew in the empty swimming pool and the rooms sold for
only $33 per night. The land had been purchased in 2003
for $13.2 million, but had been reported to be valued at
$600 million, a gross overestimation of its possible value.
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There was some good news for the investors who were vic-
timized. In April of 2013, the SEC announced that a federal
district court judge ordered that all the investors receive
the return of their principal investment. The case is other-
wise still ongoing as the SEC tries to recover the remainder
of the funds.
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I hope this chapter has been a wakeup call that fraud does
occur—that, at the very least, not all Regional Centers rep-
resent equally strong or safe investments. At the same time,
I also hope the story of the Chicago Regional Center is em-
powering, showing that a proper due diligence evaluation
can not only save you from being victimized by fraud, but
provide the sense of confidence that comes from knowing
that you made a sizeable and highly consequential invest-
ment in the most intelligent way possible.
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References
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C H A P T E R 7 :
An Overview of the
Application Process
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other hand, you decide that this is not the right investment
for you, my firm will charge you NO FEE. I firmly believe
that this is the way that attorneys and Regional Centers
should do business. You should not incur costs and fees
unless you decide to take advantage of this opportunity.
If you decide you move forward, you will then transfer the
$500,000 investment and the service fee to the Regional
Center.
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On the other hand, if you are living outside the U.S., you
and your family will have to submit an immigrant visa ap-
plication to the U.S. Embassy (or Consulate if there is one).
To assist you and your family, you will receive a notification
to prepare documents for the immigrant visa interview
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PA RT 2 :
The Direct
Investment Path
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C H A P T E R 8 :
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The Requirements
Below you will find a great deal of information about the le-
gal requirements for Direct Investment EB-5 applications.
To help you makes sense of all this information, I suggest
you keep the big picture in mind. That is, remember that
the EB-5 program was meant to encourage a very particular
kind of investment. In this prototypical scenario, a foreign
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The Basics
The law requires a capital investment of at least $1 million
in a single new commercial enterprise. However, as with
the Regional Center path, the investment amount may
be reduced to a minimum of $500,000 if it is made in a
business that is principally doing business in a “targeted
employment area” (TEA). A TEA is a rural area, or one
with high unemployment.
The Details
There are several aspects of this requirement that can be
elaborated on. These include the technical meanings of
“capital,” “a single new commercial enterprise,” “princi-
pally doing business,” “rural,” “high unemployment,” and
“area.” Let’s take them one at a time.
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The Basics
Investors must show that their funds were obtained from
a lawful source. As you might imagine, USCIS strictly
enforces this rule. The U.S. government wants to make
absolutely certain that it is not granting Green Cards to
foreigners who have obtained their money illegally. This
strict enforcement means that applicants must provide
substantial supporting documents that show where the
money came from and prove that its source is a lawful one.
Common sources of funds include salary, gifts, sale of stock
or other securities, sale of real estate, and a loan secured by
the investors assets.
The Details
Chapter 11 provides a detailed guide to common sources
of funds and the kinds of documentation that should be
included in the investor’s application, if they’re available.
Satisfying this requirement is often a challenge, not be-
cause investors’ didn’t obtain their funds lawfully, but
because documentation may be difficult to obtain. The
good news is that it is that USCIS understands this, so it
not necessary to provide so much documentation that it
eliminates all doubt that the money was acquired lawfully.
When evaluating the source of an investor’s funds, USCIS
applies what’s called the “preponderance of evidence”
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The Basics
Contrary to how it might sound, satisfying the new com-
mercial enterprise requirement through the Direct Invest-
ment path doesn’t mean creating an entirely new business
from the ground up. In fact, there are a number of different
ways to satisfy this requirement. More specifically, there are
a number of different ways a business can qualify as “new.”
First, one can simply invest in a business that was created
after 1990—any such business would be considered a new
commercial enterprise. Second, one can invest in a busi-
ness that has been be restructured or reorganized, as long
as the restructuring happened as a result, at least in part, of
the investor’s capital contribution. This is true even if this
business was first established before 1990. Third, one can
also invest in a business that has been expanded, thanks in
part to the investor’s capital, even if it is an older business.
The Details
Once again, let’s take a look at some key language in this
requirement. Specifically, I will unpack the terms “com-
mercial enterprise,” “restructured or reorganized” and
“expanded.” A commercial enterprise can be virtually any
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The Basics
EB-5 investors must play an active role in the management
of the new commercial enterprise. Being a passive investor
is not sufficient. Investors can satisfy this requirement ei-
ther by being involved in policy formulation or in the daily
managerial work of running the business.
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The Details
This requirement presents fewer complexities than the
others. Investors will need to demonstrate that they hold
positions or titles that are consistent with an active role in
the business, whether it is in policy formation or manage-
rial work.
The Basics
USCIS wants to ensure that EB-5 applicants are actually
making legitimate investments in the American economy,
rather than merely creating the appearance of making an
investment. The “at risk” requirement reflects this goal.
Investors must show that they have done more than formu-
late an intention to invest; they must show that they have
made a genuine capital contribution. In other words, the
necessary funds—previously owned by the investor—must
now be the property and in the control of the commercial
enterprise. Typically, investors transfer the money from a
personal bank account to business account. Furthermore,
the funds must be in the process of being used to develop
the business, resulting in the possibility of both profit and
loss.
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The Details
There are several aspects to this requirement. The first is
the issue of ownership and control. When the investor first
applies for a Green Card, the funds must be owned and
controlled by the new commercial enterprise. Commonly,
investors will transfer the funds into a business account.
This is an important step, but it’s not always enough to
satisfy this aspect of the requirement. Imagine an inves-
tor who creates a corporation and transfers the funds to a
corporate account. Imagine further that at the time of the
initial EB-5 application the investor is the only corporate
officer and is the sole shareholder. Although there is a sense
in which the investor no longer owns the capital (since it is
technically the property of the corporation), it is still under
the investor’s sole control. In this scenario, the “at risk”
requirement would not be met.
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The Basics
The job creation requirement is one of the core aspects of
the EB-5 program. After two years of developing the busi-
ness, investors are required to show that their infusion of
capital lead to the creation of at least 10 full-time positions
for employees. Unlike the Regional Center program, the
Direct Investment option requires that these jobs be creat-
ed directly, which is to say that the jobs must be part of the
business in which one is investing. However, if one invests
in a troubled business, jobs that are preserved can also
count towards the total.
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The Details
There are a number of important restrictions on the kinds
of positions that count towards the total of 10 jobs. These
restrictions all reflect the underlying intention of the EB-5
program—to create jobs for American workers that will al-
low them to support themselves and their families. The first
restriction is that jobs for the investor and members of the
investor’s family do not qualify. Second, as the requirement
states, the jobs must be full-time positions, which mean a
weekly minimum of 35 working hours per employee. The
sum of several part-time positions cannot be counted as a
full time job, even if the working hours of the part-time po-
sitions exceed 35 per week when added together. Seasonal
or temporary jobs will not qualify either, even if they meet
the hourly requirement while they exist. Third, jobs must
also be for genuine employees. That is, workers cannot be
independent contractors and must receive wages directly
from the business.
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restaurant did fairly well in its first couple of years, but has
since gone considerably downhill and is in danger of clos-
ing. If its net worth has decreased sufficiently in the last two
years, an EB-5 investor could satisfy the requirement if the
restaurant had at least 10 full-time employees—jobs that
would be preserved thanks in part to the influx of capital.
The law also allows for a combination of created and pre-
served jobs, as long as they add up to 10 full-time positions.
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C H A P T E R 9 :
This chapter covers the first major phase of the EB-5 appli-
cation process, the I-526 phase. As mentioned in the last
chapter, a successful I-526 application allows the investor to
apply for a conditional (i.e. temporary) Green Card.
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Overview
• Formal name of company
• History of company
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Business Objectives
• The key objectives of the company, including from a
revenue standpoint and any other objectives the busi-
ness might have
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Investment
• List of EB-5 investors and how much each will invest
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Location
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Business Operations
• Outline of different revenue/income sources and cus-
tomers (wholesalers, retailers, etc.)
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Market Analysis
• Outline of market overview
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• Marketing budget
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other hand, you are living out of the country, you may have
to go through an interview process at the U.S. Embassy. For
more information on this process, see chapter 7.
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have not been realized yet, and the investor must only show
that the commercial enterprise can be expected to create
the remaining jobs “within a reasonable time.” While “a
reasonable time” has never been explicitly defined, within a
period of one year has generally been treated as acceptable.
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139
PA RT 3 :
Source of Funds,
Transfer of Funds,
and Asset Protection
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1) Salary
3) Gifts
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Salary
Salary includes money that you earned from work or em-
ployment, as well as any assets that you have purchased
with this money. If some or all of your investment funds
can be traced to your salary, your application should in-
clude documentation like the following:
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• Income tax returns for the past five years. You should
submit your individual tax returns for the past five
years. The evidence of income tax returns is not intend-
ed to prove that you have actually paid taxes. Rather,
the tax returns are meant to prove that the investment
capital was derived from your salary. If you have not
filed tax returns at any time during the previous five
years, you will need to include an explanation for not
filing the tax returns. In situations where a company
pays taxes on behalf of the employee, records from the
company showing that such filings have been made
should be included with the EB-5 application.
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• Income tax returns for the past five years. You should
submit your individual tax returns for the past five
years. If you have not filed tax returns at any time
during the previous five years, you will need to include
an explanation for not filing the tax returns. In situ-
ations where a company pays taxes on behalf of the
employee, records from the company showing that
such filings have been made should be included with
the EB-5 application.
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Gift
The invested funds may also come from a gift, which can be
given by an organization or an individual, including a fam-
ily member. If some or all of your investment funds come
from a gift, your application should include documentation
like the following:
• Income tax returns for the past five years. You should
submit your individual tax returns for the past five
years. If you have not filed tax returns at any time
during the previous five years, you will need to include
an explanation for not filing the tax returns.
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
• Income tax returns for the past five years. You should
submit your individual tax returns for the past five
years. In situations where a company pays taxes on
behalf of the employee, records from the company
showing that such filings have been made should be in-
cluded with the EB-5 application. If you have not filed
tax returns at any time during the previous five years,
you will need to include an explanation for not filing
the tax returns.
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• Income tax returns for the past five years. You should
submit your individual tax returns for the past five
years. In situations where a company pays taxes on
behalf of the employee, records from the company
showing that such filings have been made should be in-
cluded with the EB-5 application. If you have not filed
tax returns at any time during the previous five years,
you will need to include an explanation for not filing
the tax returns.
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• Income tax returns for the past five years. You should
submit your individual tax returns for the past five
years. In situations where a company pays taxes on
behalf of the employee, records from the company
showing that such filings have been made should be in-
cluded with the EB-5 application. If you have not filed
tax returns at any time during the previous five years,
you will need to include an explanation for not filing
the tax returns.
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C H A P T E R 1 2 :
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
3 https://rbi.org.in/Scripts/NotificationUser.aspx?Id=8315&Mode=0 (Notifica-
tion No FEMA.263/ RB-2013 dated March 5, 2013) (Enclosure C)
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Documentation
• Form A2-Application for Remittance Abroad. (In case
of remitter being a Minor, Form A2 must be counter-
signed by the Minor’s Natural Guardian.)
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E N CLOSU RE A
RBI/FED/2015-16/3
January 1, 2016
(Updated as on February 11, 2016*)
To,
All Authorised Persons in Foreign Exchange
Madam / Sir,
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
Yours faithfully,
(A.K.Pandey)
Chief General Manager
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IN DE X
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
the period from February 4, 2004 till date, the LRS limit
has been revised as under:
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
a. Private visits
For private visits abroad, other than to Nepal and Bhutan,
any resident individual can obtain foreign exchange up to
an aggregate amount of USD 2,50,000, from an Authorised
Dealer or FFMC, in any one financial year, irrespective
of the number of visits undertaken during the year. Fur-
ther, all tour related expenses including cost of rail/road/
water transportation; cost of Euro Rail; passes/tickets, etc.
outside India; and overseas hotel/lodging expenses shall
be subsumed under the LRS limit. The tour operator can
collect this amount either in Indian rupees or in foreign
currency from the resident traveller.
b. Gift/donation
Any resident individual may remit up-to USD 2,50,000 in
one FY as gift to a person residing outside India or as dona-
tion to an organization outside India.
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d. Emigration
A person wanting to emigrate can draw foreign exchange
from AD Category I bank and AD Category II up to the
amount prescribed by the country of emigration or USD
250,000. Remittance of any amount of foreign exchange
outside India in excess of this limit may be allowed only
towards meeting incidental expenses in the country of im-
migration and not for earning points or credits to become
eligible for immigration by way of overseas investments in
government bonds; land; commercial enterprise; etc.
f. Business trip
Visits by individuals in connection with attending of an
international conference, seminar, specialised training,
apprentice training, etc., are treated as business visits. For
business trips to foreign countries, resident individuals
can avail of foreign exchange up to USD 2,50,000 in a FY
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
12. The Scheme is not available for remittances for any pur-
pose specifically prohibited under Schedule I or any item
restricted under Schedule II of Foreign Exchange Manage-
ment (Current Account Transaction) Rules, 2000, dated
May 3, 2000, as amended from time to time.
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16. Investor, who has remitted funds under LRS can retain,
reinvest the income earned on the investments. At present,
the resident individual is not required to repatriate the
funds or income generated out of investments made under
the Scheme. However, a resident individual who has made
overseas direct investment in the equity shares; compul-
sorily convertible preference shares of a JV/WoS outside
India or ESOPs, within the LRS limit, shall have to comply
with the terms and conditions prescribed by the overseas
investment guidelines under Notification No. FEMA 263/
RB-2013 dated March 5, 2013.
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
b. Nidhi Company, or
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
year including the gift amount have not exceeded the limit
prescribed under the LRS.
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E N CLOSU RE B
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• Gift or donation
• Emigration
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
• Studies abroad
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(ii) The loan amount should be within the overall LRS limit
of USD 2,50,000, per financial year, available to the resident
individual. It would be the responsibility of the lender to
ensure that the amount of loan is within the LRS limit of
USD 2,50,000 during the financial year.
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
• Nidhi Company, or
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COMPLETE GUIDE TO THE EB-5 GREEN CARD
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
1
A ‘person resident in India’ is defined in Section 2(v) of
FEMA, 1999 as :
(A) a person who has gone out of India or who stays outside
India, in either case-
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E N CLOSU RE C
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(ii) They shall come into force from the date of publication
in Official Gazette
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
D. Reporting Requirements
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(Rashmi Fauzdar)
Chief General Manager
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C H A P T E R 1 3 :
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COMPLETE GUIDE TO THE EB-5 GREEN CARD
Vaughan: And now you have your own law firm, the
Asset Protection and Elder Law Center, right? Can
you tell me the most common kinds of services you
provide for your clients?
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
Patrick: Correct.
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
Patrick: The great thing is you can choose who you want
to act as a trustee. It can be an individual, a bank
institution, or a trust company. The fact that you can
make that decision gives you an incredible amount
of control, all the while benefitting from great
protection. The beneficiary of the trust is typically a
student like Jane.
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
Patrick: Correct.
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COMPLETE GUIDE TO THE EB-5 GREEN CARD
Patrick: Correct.
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Vaughan: And does the law allow for the grantor and the
trustee to be the same?
Vaughan: Right.
Vaughan: Okay.
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Patrick: Correct.
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Patrick: Correct.
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COMPLETE GUIDE TO THE EB-5 GREEN CARD
Vaughan: Wow.
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VA U G H A N D E K I R B Y A N D K E N T O N D E K I R B Y
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COMPLETE GUIDE TO THE EB-5 GREEN CARD
Patrick: Correct.
Vaughan: What about the U.S. estate tax? Can you say
what that is and how that works?
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COMPLETE GUIDE TO THE EB-5 GREEN CARD
Vaughan: Right, and they can rest easy knowing that the
assets that they worked so hard to accrue are going to
be protected and would be available for their children
regardless of the circumstances.
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de Kirby Juris & Associates
INDIA:
Kundan Chambers,
Thube Park, Shivaji Nagar,
Pune 411005, Maharashtra
Phone: +91 20 412-82800
USA:
5139 Geary Boulevard
San Francisco, California 94118
Phone: 415-221-2345
Email:
info@dekirbyjuris.com
Website:
www.dekirbyjuris.com
www.eb5law.in
Vaughan de Kirby is a 1981 Cum Laude
graduate of Thomas Jefferson School of Law and is
admitted to practice in the states of California, Texas,
Maryland, the District of Columbia and before the
United States Supreme Court. Vaughan is an attorney,
writer, educator and speaker whose goal is to empower
his readers and clients with the information they need
to make the best legal decisions for themselves and their
families. Vaughan has served as an adjunct professor of law and is the author
of numerous best-selling books and consumer guides. Vaughan and his wife
Christine are the parents of three adult children.
The Law Offices of Vaughan de Kirby, APC received the Golden Crown award
from the World Journal newspaper based on a vote of its readers. The readers
of Sing Tao Daily have rated the Law Offices of Vaughan de Kirby as number
one in client service.
WORD ASSOCIATION
PUBLISHERS
www.wordassociation.com Law
1.800.827.7903
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Tarentum, Pennsylvania