ABHINAV lOHIA tells you why the US continues to the the destination for high-net-worth individuals even though there are other options available
The US is the largest consumer market in the world making it the ultimate destination for wealthy individuals and corporates to invest in. Often high-net-worth individuals looking to secure a better education and future for their children choose to migrate to the US for its advanced infrastructural and entrepreneurial opportunities.
While many consider countries like Canada, Australia and New Zealand for migration, the US is a far more accepted and recognised choice. This is primarily because of the availability of access to a highly lucrative open market which is a powerful growth engine for companies of all sizes. The Make in India movement has led to an increase in manufacture in India. However, the movement has seen its major boost through sales in the US. We have also witnessed a few of our clients shift bases from Australia and Canada to the US as their businesses were not sustainable in those countries.
As per SelectUSA, a US Government-wide programme housed in the International Trade Administration at the United States Department of Commerce, the US offers the largest consumer market in the world with a GDP of $18 trillion and 325 million people.
Household spending in US is the highest in the world, accounting for over a quarter of global household consumption. At the same time,free trade agreements with over 20 countries provide an enhanced access to hundreds of millions of additional consumers - and the United States continues to work with foreign partners to increase these opportunities.
Having operations in the US, gives an impression of legitimacy to a business. This results in an increased valuation of the company and, its products and services.Not only does the US provide the right climate for start-ups, but it also gives them access to plenty of investors.
Crowd funding, a popular trend in the US (unlike many other countries), enables small business owners to pull investments for their venture. Another factor that prevents Indians from moving to Canada is the weather. Unlike the US where you can live in Florida or California to escape the cold or, live in Chicago or New York, if you like snow. Canada being so up north, it is next to impossible to escape the cold.
Many Indian investors feel New Zealand and Australia are cut off from the rest of the world. This is viewed as discouraging from a personal and commercial point of view. While a lot of Indians have relatives in the US and the UK, such is not the case with Australia and New Zealand. life in developed nations is considered lonely, with that the distance and lack of relatives makes it less attractive for Indian HNIs. Also, these distances also have an impact on the export of goods to these countries.
The EB-5 investor visa programme in the US is one of the cheapest residency programmes in the world, when compared to developed nations and global powers. Also, the programme does not restrict the residency to a particular region. After getting residency an investor is free to live and work in any part of the US. The education is recognised all over the world, therefore people looking for high quality education for them or their children often move to the US.
Getting a Green Card not only gives access to leading US universities, it also results in reducing the fees by thousands of dollars owing to the Green Card holder’s resident status. Along with moving to the US for educational purposes most of the applicants also aspire to work on the same grounds. The EB-5 programme puts them on the same footing as any other American in the job market. This results in more job opportunities, non-dependence on employers for sponsorship to live and work in the US. The uncertainty around the H-1B programme has also triggered a rise in EB-5 for India.
The writer is partner and practice chair of India
& South-East Asia, Davies & Associates llC