Managing Member William P. Cook Speaks at the IIUSA 5th Annual EB-5 Market Exchange

Panel on Investor Market Diversification

GMLG Managing Member William P. Cook spoke about diversifying EB-5 investor markets at the IIUSA 5th Annual EB-5 Market Exchange on October 22, 2015.

Mr. Cook shared his experiences in developing the India EB-5 market, which remains significantly under-prescribed when compared to the China market. He shared the statistics of the large market size, which includes over 200,000 millionaires and 15,000 multi-millionaires (above $10 million net worth). He also explained how many Indian businesspeople first pursue H and L nonimmigrant visas, and then EB-1, 2, or 3 residency visas, but that those options all have varying issues of uncertainty, high scrutiny, and large backlogs.

Mr. Cook also spoke in detail on the cultural issues facing the EB-5 market in India. He explained that one reason the EB-5 program only had 97 visas issued from India in 2014 (including Adjustment of Status), compared to the thousands from China, is the cultural reluctance of Indian businesspeople to make passive investments, with little control and weak returns, with strangers. Indian businesspeople do extensive due diligence on Regional Centers and projects, and often prefer to do their own investments or small pooled investments with friends and associates, Mr. Cook noted.

Reserve Bank of India (RBI) monetary export controls and complex source of funds issues are also unique to the EB-5 market, Mr. Cook explained. He gave examples of his work managing those issues with Indian clients, especially difficult source of funds cases that include real estate transactions where the sales of property may be informal.

Next, Mr. Cook spoke about the South American market. He outlined the extensive size of the market with over 500,000 millionaires, but also explained how the recent uncertainty with many economics in the region has impacted the EB-5 market. He also explained how many wealthy South Americans have seek the E-2 Treaty Investor visa (which is available for Mexico, Argentina, and Chile, and for dual nationals with Italian, Spanish, or German nationalities).

As with the market in India, wealthy South Americans are not as desperate to leave their countries as those in the China market, Mr. Cook noted, so they tend to have higher expectations for projects and transactional terms.