DeCicco sees source of funds in India as a specific
challenge. “Much of the wealth comes from ancestral
property that has appreciated greatly in recent years,” he
said. “Often, there is little or no paperwork. In addition,
there is still a large cash economy in India. That is why
finding an immigration attorney who specifically has
experience with Indian source of funds is very important
to the investor and to us as the regional center.”
Another challenge, according to Cook, is the uncertainty
about the minimum investment amounts and potential
legislative changes facing the EB-5 program. The
minimum investment amount could rise to $800,000 or
as high as $1.35 million under proposed reforms from
congress and the White House.
New rules also could result in stricter criteria for
defining economically distressed areas. Cook said
he sees a pause coming to the market as investors
consider whether they’re willing to accept the increase in
investment amounts. Cook notes that Indian clients are
engaged, ask great questions, read everything and take
a great interest in making sure they’re not making a bad
investment.
“The good news is the Indian market after this initial
pause … will continue to grow because Indian investors
will do direct investments or the market will respond with
regional center opportunities.”
INDIAN INVESTORS NOT AFRAID TO
SCRUTINIZE THE MARKET
DeCicco points to the sophistication of Indian market
investors, who in the past had a difficult time believing
the program wasn’t a scam. “We have moved past that.
But now they are applying that same skepticism and
scrutiny to the quality of the projects themselves, the
principals and track record of the regional center. They
are asking questions about how many I-829’s we have
had and most importantly, how many investors have we
repaid.” India, Kapuria said, is a complex country with
multiple languages spoken and a corresponding number
of differing cultural subtexts. It also has one of the
largest set of millionaires, providing ample opportunity to
grow the market.
“It will grow more, but regional centers (and) issuers
need to spend more time educating the market and
building a base of brokers.”
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