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Three Reasons Why You Should Choose the EB-5 visa over H-1B

Three Reasons Why You Should Choose the EB-5 visa over H-1B

Tuesday October 24, 2017,

5 min Read

Mr. Mark Davies, Global Chairman of Davies & Associates, LLC

Mr. Mark Davies, Global Chairman of Davies & Associates, LLC

Every year the US economy opens its doors to millions of immigrants from around the world. One route of this immigration is through the H-1B visa program that enables individuals to work in the United States of America through a visa that is sponsored by their employers. Indian immigrants account for the overwhelming majority of H1-B visas, most recently accounting for a whopping 126,000 visas, China is next with a mere 21,567.

H1-B visas have a number of disadvantages. A significantly high demand for the H1-B visa has resulted in a lottery system; the outcome of which may not be known for months. The H1-B visa applications are increasingly under scrutiny and are subject to on-site audit. H1-B visa holders are also narrowly restricted to the role described in the application in terms of the work they can perform and the maximum extension period of the visa ordinarily is six years. The compensation requirements for the H1-B visa are rapidly increasing and have come to the point where employing H1-B workers is economically disadvantageous. Furthermore, the H1-B visa program is continuously under increasing political assault and many Indian visa holders are worried about the program’s continued existence.

The EB-5 immigrant investor visa allows an individual to invest a minimum sum of USD 500,000 in target employment areas in the US and receive a conditional green card within a minimum of two years. It would be incorrect to say that the EB-5 visa is ‘better’ than the H-1B visa, but the EB-5 visa does bring with it considerable benefits that the H-1B visa does not offer to its holders.

1. Mobility and Certainty of Career

The H-1B visa chiefly relies upon the employer’s offer to sponsor the individual. The future of an employee working on an H-1B visa is, therefore, in the hands of the employer who is their sponsor. In case of a loss of job, the H-1B visa allows you a very short duration to no time at all (in some cases) to continue living as a legal immigrant in the US. However, with a green card via the EB-5 visa program the investor and his immediate family have the choice to reside in any part of the US, the right to take any job they wish and access to almost all facilities enjoyed by a US citizen. There is no limited grace period to search for and find a new job or a threat of an unlawful immigration status. This gives the individual greater mobility in their career choices and assurance to live and work in the United States for as long as they wish to.

2. Entrepreneurial Opportunities

An EB-5 based Green Card also allows an Indian entrepreneur access to the world’s largest consumer market. An H1-B visa traditionally ties the holder to a traditional job.Some Indian entrepreneurs do not seek funding and simply establish a US business and the tremendous opportunities it can bring. Other entrepreneurs choose to relocate to the US in order to attract funding for their dream projects, often in Silicon Valley.The H-1B program cannot support entrepreneurs as it is a ‘work visa’. The EB-5 program requires the visa applicant to make a minimum capital investment of USD 500,000 (which is returned to the investor in five years in small instalments). An EB-5 allows an individual to travel and garner investor interest in their projects without any restrictions in the US.

The ability to tap into the ever-growing and increasingly demanding US consumer market opens doors to engaging some of the biggest players in Silicon Valley. The basic investment for the EB-5 program can also be a gift from parents, through legitimate sources, to their children who aspire to relocate to the US. The EB-5 visa application helps an individual to secure a green card for them self and, their spouse and children (below the age of 21). Therefore, EB-5 can draw the right kind of financial backing and suitable appendage to set up and grow one’s own business venture in the United States.

3. Growing an Existing Business and Raising Cheap Capital

Many Indian businesses seek direct to access the US market. This can result in increased margins and significant sales growth. Other Indian businesses seek cheap capital to expand or establish their US operations. Unlike and H-1B visa, EB-5 can be the solution to both problems.Some Indian businesses have successfully used EB-5 to fund their expansion into the US. When an Indian business seeks investors for its US operations the business obtain capital at an interest rate it is unlikely to be able to find elsewhere, meanwhile their investors obtain the right of permanent residency in the United States.

Where the owner or a principal employee of the business is an EB5 investor that individual gains enormous flexibility in terms of managing the operations of the business. Rather than being tied to a specific role on an H-1B visa the individual is free to diversify, expand and change the nature of their day-to-day business.

The fact that the overwhelming majority of EB5 cases are filed through the Regional Center program may indicate an overlooked opportunity for Indian businesses growing into the US market.