Trump, H-1B and Why EB-5 is the better bet?

People around the world who were dreaming of a life in the United States were as anxious and worried as the Americans when the US Presidential result tilted in favor of Donald Trump. His entire campaign was tailored towards restricting immigration and creating “real jobs for Americans”. The travel ban proved that it was not political rhetoric and Trump administration was bent on upending the current immigration system. But what created mayhem was the introduction of legislation in the US House of Representatives which called for among other things more than doubling of minimum salary for H-1B holders to $130,000.

The new amendments to H-1B visa are directly aimed to “stop the outsourcing of American jobs”. The major brunt of this decision is likely to be felt by Indians looking to further their careers in the United States via either through a college degree in the states or enrolling in the H-1B process through their employer. Both processes were already a long trek to a green card with multiple hurdles. Under such circumstances, one ray of hope for people dreaming of moving to the United States is EB-5 visas.

Under the EB-5 program, the investor needs to invest 500,000 US dollars and the investment must create 10 American jobs. Thus EB5 visas provide an opportunity for foreign nationals to obtain a green card by investing money in the United States. More importantly, the investor gets the visa for himself, his spouse and for unmarried children below the age of 21.

There are wealth management companies in India specializing in helping Indians invest abroad to diversify risk (demonetization anyone!!). But the ability to invest in a developed market like America and get a US green card for the entire family is the proverbial “having the cake and eating it too”.

The major reason why the Trump government or any administration will push for an EB-5 visa is because every EB-5 visa holder has to generate 10 jobs along with the relevant monetary investment. Whereas with H-1B visa, the company needs to prove the prospective employee does not substitute an American national. So in comparison, where one visa is helping to create jobs for American nationals other is threatening to take employment opportunities away from Americans. 

It is important to understand the H-1B regime. 85,000 H-1B visas are issued each year. Further breaking down the 85,000 applications, helps clarify why it is difficult to get H-1B visa.

     H-1B Visa’s available for people with master’s degrees: 20,000
     Annual H-1B Visa’s available for undergraduate and master’s: 65,000
     Total Available H-1B Visas: 85,000

This is where it gets really tricky, let’s suppose a person with master’s degree does not get a visa through 20,000 visa window, that person is automatically dropped in the 65,000 visa pool. Furthermore, out of the 65,000 visas available for educated immigrants, 6,800 are already allotted to Singapore and Chile. H-1B visa applications for this year were 236,000. Putting this number in the larger scheme of things, out of 236,000 applications you only have a 24.6% chance of getting an H-1B visa.

This is just the tip of the iceberg, problems just does not stop there for the prospective graduate and undergraduate applicants. Not interested in studying science? If the graduate does not have a degree in STEM (science, technology, engineering, mathematics) there is every likely hood employer will not request the H-1B visa for the applicant.

With so many restrictions and complications with H-1B visa, and an unsure future of how this system will exist in the future, EB-5 offers a string of benefits not only to the applicants but also to their families as well. One of the primary benefits is that it provides an excellent opportunity to obtain permanent residency in the US.

Unlike other visa options available to migrate, EB5 visa does not need any US employer to act as a sponsor, nor does the applicant need any specific knowledge, expertise or education degree to qualify. There is also no restriction in terms of which country the foreign national belongs to as in the case of other visa categories.

If the investment made matches the program requirements, provisional residency is allotted after 2 years and after five years of permanent residency, you can become a naturalized citizen.

Another lucrative advantage is the chance for the investors’ kids to study in US schools and colleges and pay fees on the same scale as any United States resident and not as an international student. This alone can save you hundreds of thousands of dollars over an entire education lifecycle.

More importantly, you get the opportunity to study in the best of schools; acceptance rates for American students are usually higher by 500% as compared to Asian applicants. Do you really want to calculate the difference in income that degree from Harvard versus one from a state university will create?

Even before the Trump era began in the United States, the country has witnessed a surge in number of applications for EB5 visas (62.6% increase from 13,526 in the first quarter of 2015 to 21,988 in the first quarter of 2016) and now this number is expected to go through the roof considering the new H-1B complications coupled with expected increase in the investment amount under EB5 category as well.  

USCIS has published new rules that propose to raise the EB-5 investment to $1.35 Million, a 270% increase. It is imperative for an investor to take a quick decision and start the application process as soon as possible. Trump administration is made up of businessmen billionaires who understand the power of citizenship of USA. That is why they will keep on increasing the price of this wonderful program because they know America is the dreamland of immigrants and wealthy investors are ready to pay anything to escape the turmoil in the world around them.

The question is that whether you are fast enough to save that $500,000?