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Why the EB-5 Visa Is a Good Alternative to the H-1B Visa During the Immigration Ban

Why the EB5 Visa Is a Good Alternative to the H1B Visa During the Immigration Ban

On April 22, 2020, President Trump signed into law an executive order that temporarily suspended various types of immigration for 60 days, spurred on by the COVID-19 pandemic. Two months later, upon the expiration of the proclamation, he expanded the classes of immigrants it covered and extended the ban until the end of 2020, citing the need to save jobs for U.S. citizens and residents.

Among the visa types affected are H-1B visas, one of the most popular work visas. This decision leaves thousands of hopeful immigrants without a pathway into the United States for a better, freer life, and with most other work-based immigration pathways also prohibited, the situation seems hopeless. But there’s still a way: the EB-5 Immigrant Investor Program.

What is the H-1B Visa?

The H-1B is among the most popular work-based visas. Foreign nationals with specialized education and skills who attain sponsorship from a U.S. employer may apply for the visa, although due to the demand, approved applicants are then put through a lottery system. The visa allows a foreign worker to stay in the United States temporarily and work for their sponsor. Each year, 65,000 H-1B visas are available, but the immigration ban complicates matters in 2020.

Companies across the United States, particularly tech companies, were outraged at the ban, as it would have significant impacts on their businesses. On August 12, 2020, limited exceptions to the immigration ban were announced, granting exemptions to foreign national workers whose presence in the United States is deemed to be in the national interest, whether to help combat COVID-19 or aid in the rebuilding of the U.S. economy.

However, exemptions are difficult to achieve, and thousands of H-1B applicants in 2020 are still having their petitions denied. The National Foundation for American Policy (NFAP), the majority of top companies in the United States experienced at least a 10% increase in H-1B denial rates. NFAP data also shows an H-1B denial rate of 29% in 2020, compared to just 6% in 2015.

The EB-5 Program as an Alternative

EB-5 investors have escaped the immigration ban, making it a solid alternative to the H-1B visa. And an H-1B visa can be converted to an EB-5 visa—good news for H-1B visa holders affected by the immigration ban. The EB-5 program grants foreign investors U.S. green cards in exchange for an investment in a qualifying EB-5 project. Investors must commit at least $1.8 million to an EB-5 project, unless it is located within a targeted employment area (TEA), in which case they need only invest $900,000.

Investors can use any number of funds as EB-5 capital, from employment income, to funds from the sale of assets, to money gifted by their parents. EB-5 investors can also choose between a direct investment and a regional center investment. With a direct investment, the EB-5 investor must engage in day-to-day management at the new commercial enterprise (NCE), which allows them to retain more control over their investment. Investors with less managerial experience or who simply desire more freedom are advised to invest via a regional center, which frees them from the need to be actively involved in the NCE’s management.

Whether an investor invests in a direct EB-5 project or in a regional center project, and whether they invest $1.8 million in a non-TEA project or $900,000 in a TEA project, the outcome is the same: U.S. green cards for the investor, their spouse, and their unmarried children younger than 21. This makes the EB-5 program preferable to an H-1B visa, which only offers temporary residency rights. EB-5 visa holders are also unrestricted in their freedom to work anywhere in the United States, whereas H-1B visa holders must confine themselves to working for their sponsor. For those interested in U.S. citizenship, the EB-5 visa also offers a pathway to naturalization: after five years of permanent residency, an EB-5 investor may apply for U.S. citizenship.