Chasing the American Dream: How EB 5 is Becoming a Viable Option in The Face of Tech Job Losses and H1B Visa Issues
March 24, 2023
The percentage of Indian citizens who requested a change in their visa status to that of an EB-5 investor in 2022 was double that of 2021, according to Peter Calabrese, CEO of the Wall Street-based CanAm Investor Services.
As the layoff season in the US IT industry drags on unabatedly, the Great American Dream is quickly becoming a nightmare. As a result of job losses and the complicated nature of the H1B visa procedure, many ambitious Indians are beginning to consider applying for an EB-5 visa, sometimes known as an immigrant visa for investors.
Globally, the technology industry has lost more than 285,000 jobs in the past year, and several large companies, like Google, Microsoft, Meta, and Amazon, have made significant cuts to their workforces in recent months.
Indian citizens are expected to be hit hardest by layoffs at U.S.-based computer companies. According to a January PTI article, industry sources believe 30-40% of those thrown off are Indian techies.
The majority of those that are terminated are Indian nationals who are in the United States on H1B visas. Because of this, they have only 60 days to find a new company that would agree to sponsor their H1B visa application. They might have to leave the country and return to India if they can't find work here. It is especially plausible given the industry's current state, which is seeing job losses.
Despite the high initial investment required, some experts believe the EB-5 visa program can help Indians in the US and India achieve their immigration aspirations and get legal permanent status in the United States.
How Does the EB-5 Visa Work?
According to the US Immigration Act of 1990, an EB-5 visa may be granted to an immigrant and their spouse and unmarried children under the age of 21 if the immigrant invests a specified amount in a U.S.-based business that creates employment for at least ten U.S. citizens or permanent residents with specialized knowledge.
If the investment is going into a "targeted employment area (TEA)," which is typically a rural region with a high unemployment rate, the minimum investment amount drops to $800,000 (Rs 6.4 crore) from the standard $1,050,000 (Rs 8.6 crore).
Immigration lawyers estimate that it takes two to three years for EB-5 visa holders to receive their conditional green cards after applying for them. After waiting another two years, you can apply to have your conditional green card upgraded to a permanent one and move one step closer to full citizenship.
In contrast to the H1B program, EB-5 visa holders are not limited to where they may live and work while pursuing their education or career. They can launch their companies anywhere in the country.
Does the EB-5 Program Help Unemployed Indians?
Indian citizens on H1-B visas who apply for an EB-5 visa may circumvent the 60-day clock that begins after they quit their employment. It was made possible by the EB-5 Reform and Integrity Act, which was approved in March last year and provided for concurrent filing for visa status modification.
H1B workers may delay leaving the country until they acquire their green cards thanks to a provision in the new EB5 law that allows EB5 investors to file for adjustment of status (I-485) at the same time as their applications, as pointed out by Abhinav Lohia, director for global business development at San Francisco-based investor service firm Golden Gate Global.
Applicants can also file for job authorization together with their adjustment of status application, which permits them to work in the US until they become permanent residents, according to Lohia.
In the stressed-out US tech industry, Indians are showing much higher interest in EB-5 visas, according to Peter Calabrese, CEO of Wall Street-based CanAm Investment Services.
The new policy that allows Indian citizens working or attending school in the United States to apply for a visa change while staying in the country is a game-changer. The percentage of Indian citizens who sought a change in their visa status to that of an EB-5 investor in 2022 was twice that of 2021.
Increase in Indian EB-5 Applications?
Official statistics on the number of Indians who filed for the EB-5 visa are not yet available, but investor service companies assert they have seen an increase in Indian citizens' inquiries and applications over the last year.
Calabrese explained that according to a recent data study, they noticed a 155 percent increase in EB 5 inquiries received across all nations in the calendar year 2022 compared to the previous year. They received more than three times as many queries from Indian investors in 2022 as the previous year, and this trend is expected to continue in 2023.
The most current data on citizenship renunciations, which the Indian government just disclosed, also show a rise in the number of Indians searching for better opportunities in the West. According to the Ministry of Foreign Affairs (MEA), the number of Indians who gave up their citizenship in 2022 exceeded 2.25 lakh, which was the largest number since 2011.
The breakdown of data for 2022 is not yet available, but in 2021, out of 1.63 lakh Indians who chose to renounce their citizenship, nearly half (78,284) chose to become citizens of the US. It was followed by 23,533 who became citizens of Australia, 21,597 who chose to become citizens of Canada, and 14,637 who chose to become citizens of the UK.
It indicates that the US is the most popular destination for Indians seeking foreign citizenship since it has the best per-capita wealth in the world. Experts argue that as the possibility of naturalization via years of labor becomes more distant, Indians are increasingly interested in the investment-visa program to settle permanently in the US.
U.S.-based Indians are now the most common source of urgent questions for EB-5 visas, although Lohia reports that more inquiries with a 6-month to the 1-year horizon are coming from India.
He went on to claim that layoffs have a domino effect in India, with many parents contemplating selling off investment properties in the country to get the money they need to apply for an EB-5 visa for their children to study in the United States.
They would rather invest in the future of their children in the United States than leave the property to them as an inheritance. Sadly, he continued, this is the reality for those who want to make the United States their permanent home.
What Are the Risk Factors?
The USCIS mandates that the investments made under the EB-5 program be "at-risk". The main risk indicators, however, have little to do with financial returns and more to do with whether the applicant's primary goal of permanent residence in the US could be compromised.
According to the guidelines, a thorough investigation must confirm that an applicant's investment in the US is made using money gained via legal means. If the source of the investor's contribution is not evident, applicants may not be granted a conditional green card.
Also, the applicant's conditional green card may be denied if the program's investment fails to provide long-term jobs for at least ten qualified US residents.
The third imminent risk is associated with picking a regional hub. According to the rules of the EB-5 program, an applicant can either invest directly into a business or invest through a USCIS-designated regional center that pools clutch EB-5 investments and utilizes them to construct initiatives that would result in the creation of new jobs.
Experts highlight the significance of exercising extreme caution while deciding on a regional center. If the business they invest in doesn't create enough jobs or otherwise satisfies USCIS requirements, they could lose their money and be denied permanent residence in the United States.
Before deciding on a regional center to invest with for an EB-5 project, investors should do extensive due diligence on the organization. Calabrese suggested consulting with legal and financial experts as well as conducting due diligence on the regional center and the project's developers to assess the investment's viability.
The chief executive officer of CanAm Investment Services emphasized that, ultimately, the success of an EB 5 investment depends on appropriate due diligence and adherence to the program's rules.
Note: This website's material is provided for informational purposes only; it does not represent legal or financial advice. Only a certified professional with a complete grasp of all the facts and circumstances surrounding your particular case can give legal or financial advice. Before applying for the EB-5 program, you should consult with a visa attorney who specializes in legal, immigration, and financial matters.