Professionals who would like to live and work in the United States frequently seek H-1B status. The visa has become less appealing over the years, however, due to increased demand and the various restrictions associated with the program. The EB-5 program, in contrast, has become increasingly popular due to the unlimited opportunities it offers to those seeking to either establish or extend their immigration status in the United States.

Recognizing that there’s no one-size-fits-all to immigration planning, this article discusses the H-1B and EB-5 programs, aiming to help foreign nationals decide which visa path best suits their needs.

 

What Is the EB-5 Program?

The EB-5 program, often referred to as the Immigrant Investor Program, offers a pathway for eligible investors and their immediate family members (spouse and unmarried children under the age of 21) to gain permanent residency in the United States.

Originally legislated in 1990 by the U.S. Congress, the EB-5 program aims to stimulate economic growth through foreign investment. To qualify, investors must make a substantial capital contribution to a new commercial enterprise and generate at least 10 permanent full-time jobs for qualifying U.S. workers.

The EB-5 program provides two primary avenues for investment. One option is for investors to directly finance and operate a business in the United States. Alternatively, investors may opt to invest through EB-5 regional centers. Designated by the United States Citizenship and Immigration Services (USCIS), regional centers coordinate larger projects by pooling investments from multiple sources, and are responsible for overseeing the job creation requirement of the EB-5 program.

Investments within designated high-unemployment or rural locations, called targeted employment areas (TEA), have a lower minimum investment threshold of $800,000. For investments made in projects outside these areas, the minimum investment is $1,050,000.

What Is the H-1B Program?

The H-1B program was created to allow individuals working in specialty occupations to live and work in the United States. In order to qualify for this visa, applicants must have a job offer from a U.S. employer, as well as a minimum of a bachelor’s degree or its equivalent in a field related to the job for which they are applying.

In addition, the hiring employer must demonstrate that the position requires specialized knowledge, and that they will pay the prevailing wage for the role. The prevailing wage refers to the customary wage paid to similarly employed workers in a particular geographic location within the United States.

H-1B Visa as an Option for International Students

H-1B visa classification is particularly sought after by individuals already in the United States in F-1 non-immigrant student status. This is because the authorized period of stay for students in F-1 status ends as soon as the student completes their course of study.

A program called Optical Practical Training (OPT) allows eligible F-1 students to remain in the U.S. to pursue employment in their field of study. This extension, however, is for a maximum period of 12 months only (or 24 months for students in STEM fields). Following OPT completion, students are once again faced with the mandate to leave the United States.

Because H-1B status allows students to remain in the United States after completing their course of study, students nearing the end of their F-1 or OPT status often seek out the H-1B option. While it is true that obtaining an H-1B visa allows F-1 visa holders to extend their stay in the U.S., the H-1B program contains numerous restrictions that can interfere with an applicant’s long-term immigration goals. This is why it’s best to consider multiple options before choosing to pursue the H-1B route.

What Are the Limitations of the H-1B Program?

The principal limitations of the H-1B visa include the following:

Limited Duration of Stay

In most cases, H-1B visa holders can only remain in the United States for a maximum period of six years. With limited exceptions, once the six-year time limit has been met, a person in H-1B visa status must leave the U.S. and remain outside of the country for at least one year.

Annual Cap

Perhaps the greatest limitation of the H-1B program is the annual cap on the number of H-1B visas available to new applicants. While the U.S. Congress has authorized 65,000 visas for qualifying individuals (and an additional 20,000 for individuals holding U.S. master’s degrees), the demand for H-1B visas vastly outnumbers that amount. In fact, in fiscal year 2024, the number of H-1B applicants reached an all-time high of 780,884.

Lottery System

Because the demand for H-1B visas is so much greater than the number of visas available, a lottery system is in place. Under this system, a limited number of H-1B registrations are randomly selected for further adjudication. The unpredictable nature of this process makes it difficult, if not impossible, for applicants to make long-term personal or career plans.

Employment Sponsorship Requirement

Self-sponsorship is not available for the H-1B visa category. This means that anyone seeking to obtain H-1B status must first identify an employer willing to sponsor them for the visa. It is becoming increasingly difficult to find employers willing to sponsor H-1B applicants, however. This is in large part due to the uncertainties associated with the lottery system, as well as with the costs and administrative burdens that employers must assume if they wish to hire an H-1B employee.

Limited Employment Options

H-1B visa holders must remain employed in the position for which they were originally hired. They may not work for another employer without filing a new H-1B application, and they are prohibited from starting their own businesses.

Geographic Restrictions

Employees in H-1B status must live and work where their employer dictates and are not free to relocate to other parts of the United States.

Limitations Impacting Family Members

While the spouses and children of H-1B visa holders may apply for H-4 status to reside legally in the United States, in most cases, spouses are not eligible to work. Moreover, when children of H-1B holders reach the age of 21, they must either seek an independent basis for legal immigration status in the U.S., or leave the country.

What Are the Benefits of the EB-5 Program Over the H-1B Program?

Unlike the H-1B program, the EB-5 program has virtually no limitations. For those seeking a direct path to U.S. permanent residency, the EB-5 program offers the following key advantages:

• There are no duration of stay limitations. Individuals already in the United States when they apply for EB-5 status are free to remain in the U.S. until their applications are approved. Furthermore, after two years of conditional residency, EB-5 visa holders may apply for unconditional permanent resident status, and may subsequently apply for U.S. citizenship if desired.
• Visas are often available in all EB-5 eligibility categories, particularly for those applicants open to investing in a targeted employment area.
• The EB-5 process is straightforward; there is no lottery system involved.
• Employment sponsorship is not required. Individuals in EB-5 status do not need to find an employer to sponsor them, nor are they tied to any particular employer. Immigrant investors are free to advance their careers in any way they choose, and may live anywhere in the United States that they desire.
• EB-5 green card holders, including spouses and unmarried children under the age of 21, are free to work and study anywhere in the United States, without having to apply for any special permissions. Furthermore, when children obtain permanent residency status through their investor parents, their status is not impacted when they turn 21.
• Significant new benefits were introduced with the EB-5 Reform and Integrity Act of 2022 (RIA). Under this legislation, individuals in valid nonimmigrant visa status at the time that they file their EB-5 petition can remain in the U.S. while waiting for their EB-5 applications to be approved. They can also apply for work and travel permits at the same time. Current F-1 visa holders, for instance, should carefully consider this benefit when deciding whether to pursue H-1B vs EB-5 status.

While the EB-5 program offers numerous benefits and opportunities for investors and their families, the program does involve a significant financial investment, and processing times can be lengthy depending on the visa category. For this reason, consulting with experienced industry experts or an immigration attorney is recommended.

Is an EB-5 Visa the Right Choice for You?

Every person pursuing U.S. immigration status has their own unique needs, resources, and goals. When evaluating different immigration alternatives, it is critical to consult with experts in the field who are highly knowledgeable about the different visa options, as well as the intricacies associated with each.

EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. For additional information on the differences between the EB-5 and H-1B visas, you can schedule a one-on-one call with our expert team today.