H-1B visa rules tightening to hit Indian IT companies margins
The EB-5 visa is gaining popularity as an alternative to the embattled H-1B visa, which is the most popular US visa category for the movement of Indian techies.
Usually an entrepreneurial visa, with an initial investment of USD 500,000 and a promise to create at least ten full time jobs in the US, children of high net worth individuals, executives as well as middle class people are looking at the visa as a sure shot chance at a US Green Card.
“Most people want to invest in EB-5 mainly for their children so they are able to go to the US and stay there and not be dependent on any other visa category,” said Andrew Graves, Director of Business Development, U.S. Immigration Fund. “We’re also recently seeing large uptick in current H-1B visa holders where they want their permanent residency, H-1B is just temporary and there’s a long lottery so they’re opting to go the EB-5 route. Plus the headwinds in the H-1B are not basically going away for the next year or so.”
The EB-5 visa has been around for 27 years now, with the minimum investment remaining the same. However, EB-5 has been under Congressional review and the investment amount is likely to go up from USD 500,000 to close to USD 1 million.
The United States Congress created the EB-5 Program in 1990 to enable high net worth foreign investors to obtain a US visa for themselves and their immediate family. However, the visa is now being increasingly used by students from different parts of the world.
“China makes up about 80 percent of the overall (EB-5) market. It is so popular that there is a waiting list. In 2016 we had over 14,000 investors from china while India had about 300,” Graves said.
India has been slow to take up on the opportunity and stands fifth in terms of countries that invest in the EB-5 visa category, after China, South Korea, Vietnam, Brazil. The most popular industry that EB-5 visa holders invest in is real estate because of “safety of capital” according to Graves.
He attributed the lack of interest in the visa category to the huge focus on H-1B visas. However, the intense focus on the vetting process for H-1B and the proposed overhaul of its lottery system, and the dependence on employers is making it an increasingly less lucrative option.
USIF has been in India for the past two years and has been trying to build awareness around EB-5 as the shortest route to get permanent residency in the US. It partnered with education group The Chopras Group in India last year with an aim to raise USD 125 million by this year.
“We’ve witnessed growing interest since our launch from families wanting to expand their business operations into the US or for their children to have greater freedom and mobility in their professional lives without having to rely on an employer to sponsor them. A large number of our initial clients have done this purely to obtain access to the United States, not necessarily to migrate to the US. We’ve seen over 3,000 enquiries since we started and over 600 meetings via seminars and one-on-one interactions in the last 5 months,” said Shan Chopra, Managing Partner of The Chopras Group.
Besides the metro cities with a large number of executives, the Chopras Group has seen huge interest from cities such as Ludhiana, Chandigarh and Mengaluru. This has also meant a slew of interesting scenarios, the most common one being HNIs in tier-2 cities asking for help to convert their black money into white.
Graves remembers a time when a prospective EB-5 visa holder was asked to pay the minimum investment in physical gold. Chopra has fielded queries on whether payments can be made in bitcoins.