The US EB-5 immigrant investor program is a US government immigration program launched in 1990, that allows investors and their families, including him/herself, their spouse, and children under 21 years of age at the time the application is submitted, to obtain their US Green Cards through a fast-track process. The main applicant must invest $800,000 in an EB-5-approved project. During the investment term, the funds must be used to create 10 full-time jobs for US people.
Over the years, the EB-5 program has become very popular among Indian nationals. Many Indian investors choose to do this program for their children as the benefits of having a green card for children attending schools in the US are abundant. With a green card, children will be able to avail of resident tuition rates which at times are one-fourth that of international tuition rates. More importantly, those with a green card will be able to obtain coveted employment positions to gain experience both during their schooling and post-graduation, allowing them to skip the difficult H1B system.
Since each nationality participating in the EB-5 program is allotted 7 percent of the 10,000 US EB-5 visas issued each fiscal year, those nationalities with the highest number of applicants will surpass the 7 percent allotment and experience a retrogression or backlog. This backlog means the application will be processed timely, however, the applicant must wait until a visa becomes available in the queue to land in the US as a permanent resident.
As the number of Indian applicants has grown since 2019, Indian-born nationals are now having to wait longer than the normal processing times to obtain a visa. It is important to note that this only applies to those Indian nationals actually born in India, and not those who have birthplaces outside of India.
An H1B visa is an immigrant visa meaning it is a visa that offers a path to US citizenship, however, there are many limitations. The biggest limitation is that individuals have to obtain employer sponsorship or find a company willing to sponsor them in order to enter the pool for H1B visas each year. This in itself is difficult as US employers prefer to hire US individuals to avoid sponsor paperwork and employers are also required to show why hiring a foreign person is necessary over a US person.
Since so many foreign individuals have been picked up over the years, especially by large tech companies, the pool for the H1B visa has become longer creating a lottery draw rather than a guarantee. This means that even individuals who have a willing employer sponsor are not guaranteed an H1B visa in any given year. If they aren’t chosen for one year, they will not be able to work and will have to re-apply the following year. Those with a green card do not face these problems.
In 2022, we have seen the greatest layoffs of tech employees in the United States. It is estimated almost 89,000 workers have lost their job due to a tech bubble burst. This means that those who are on H1B visas and lose their jobs, have a limited time to find a new job or must leave the country. Those with green cards don’t have a residency tied to employment, meaning, they can stay in the US, look for a job with any company, and not be tied to one employer who is sponsoring them.
Finally, the path to a green card and then citizenship through the H1B visa route is long and arduous which means again, that foreign individuals are tied to their sponsors for years until they are able to achieve permanent residency status. The EB-5 Program offers direct permanent residency and access to a green card.
As a result of this, more and more H1B and L1 visa holders already in the US are applying for green cards through the EB-5 Program. In addition, due to new legislation, these visa holders may stay in the US while their EB-5 petition is processing and obtain an Employment Authorization Document within just a few months. This document frees the H1B or L1 visa holder from their employer sponsor and allows them to gain employment anywhere in the US, for any company, including starting their own business legally. This new process is called Adjustment of Status concurrent filing and was only introduced in March 2022, spurring greater interest from H1B visa and L1 visa holders in the US.
This same benefit may be extended to international students (F1 visa holders), thereby allowing them to work legally while in school or post-graduation and eliminating the need for an F1 student visa Optional Practical Training (OPT).
On March 15, 2022, the US government introduced new "reserved visas" split into three set-aside visa categories: high-unemployment targeted employment areas (TEA), rural, and infrastructure projects. Before March 2022, the EB-5 program only consisted of one visa category which is now termed “unreserved visas”. Since each of these reserve categories will be processed in its own queue, the allotment of visas has not yet been surpassed. Therefore, this important new legislative change to the EB-5 program now gives Indian-born applicants an opportunity to bypass retrogression.
The safest option for Indian EB-5 applicants is to invest in a rural or high-unemployment project as these two categories are allotted 20 percent and 10 percent respectively, of the total EB-5 visa pool, while the infrastructure category is only given 2 percent of the total visa pool. Due to their largest share of set-aside visas, TEA and rural projects currently represent a safer path to avoid delays associated with visa retrogression.