Hello EB-5 investors. This is Floyd Mitchell with the EB-5 Investor Portal; the leading resource for information regarding the EB-5 visa. I publish articles based upon my interviews with leading US immigration attorneys and other EB-5 professionals which are produced as podcasts to educate EB-5 investors. Our podcasts are syndicated around the world on search engines, social media, YouTube, Google Podcasts and our own Apple News Channel – “EB5 Investor Portal”.
So, this is not a forum, or a blog post based upon personal opinions or experiences. It is information taken from my many, many hours of interviews with licensed immigration and securities attorneys, securities professionals and others.
Today’s episode is titled Applying for an EB – 5 visa as an H1-B Applicant or visa holder (1 of 2). Our special guest is immigration attorney Sam Newbold formerly with Barst Mukamal & Kleiner and now a partner at Chiesa Shahinian & Giantomasi PC in New York City.
Sam heads CSG’s EB-5 practice group representing individual investors regional centers and developers. Sam has counseled hundreds of individual EB-5 investors and their families through the entire EB-5 process and has one of the highest approval ratings in the industry. Mr. Newbold is a well-established speaker on immigration law topics in New York City and throughout the country. He often presents on topics involving complex immigration issues. Mr. Newbold also serves on the board of directors for the Safe Passage Project, a nonprofit that provides pro-bono legal aid to accompanied minors in the immigration process. He holds degrees from New York Law School and Elon University. He’s admitted to practice law in New York and New Jersey. He’s a member of the American Immigration Lawyers Association, American Bar Association and the New York State Bar Association. Mr. Newbold has been listed in the 2015, 2016 and 2017 Super Lawyers rising star publication which recognizes New York City’s top attorneys under the age of 40.
We covered a range of topics – can a H1B visa holder file for the EB5 visa? What is the visa backlogged and how does it affect investors? How do you fund the EB5 investment? What is the EB5 investment amount? What income is allowable? Are gifts allowable? Can you discuss the H1B visa? What are the H1B visa requirements? Can you compare the H1B visa to the EB5 visa? Can you discuss the H1B visa quota? If you don’t succeed at the H1B lottery, what are your alternatives?
This is one of two articles in which we will cover some of these topics in this article. Read more in upcoming articles.
I asked Sam if individuals seeking a U.S. green card may file an EB-5 petition concurrently with a pending EB-2 or EB-3 application out to USCIS.
Sure – we have a number of Indian clients who are here in the United States on H1-B and their employers have filed employment based green cards on their behalf. We call these EB-2 or EB-5 category green cards in contrast to EB-5 for example. Indians are subject to a backlog in EB-2 and EB-3 similar to how Chinese are subject to a backlog any EB-5.
I asked Sam “what is the visa backlog and how does it affect Indian investors?”
Basically, we only give out a certain number of visas globally and we cap also the number of visas we give out to specific countries every year as well. So, because of the interest we have in Indian nationals wanting to emigrate for employment it’s created a very long line in the EB-2 and EB-3 category for Indian nationals who are here in the United States on H1-B visas and they are here continuously on these H1-B visas employed with their employers while they’re waiting for their green cards to come through. Meaning that they’re waiting for their visa number to be current so that they can process and adjust their status from being an H1-B visa holder to a U.S. green card holder. So oftentimes what they do is, they’ll come to us because they’re hearing about EB-5 and there’s no backlog for Indian nationals in the EB-5 category and they’re looking to perhaps pursue you an EB-5 investment as a way to get a green card because it would be faster than having to wait you know 10 to 15 years maybe for their visa number to become current and processed under EB-2 or EB-3.
I went into further detail with Sam regarding a common questions asked by Indian investors – “Can I file an EB-5 petition if I have an EB-2 or EB-3 sort of green card case going with my employer?”
The answer to that is yes absolutely. These petitions operate totally independently of one another. For example, the investor files an EB-5 petition themselves and the employer is actually the entity that sponsors the immigrant for the green card and files all the paperwork. So, they’re the actual person who filed that petition with immigration there. So, you have an employment based green card case going and an investment based green card case going and they can totally operate concurrently. They don’t interfere with each other necessarily and they don’t even really have those cases never really crossed paths at all. So the question about whether or not that’s possible is yes it’s definitely possible and we have Indian national clients who have successfully done that. It’s becoming very popular.
I asked Sam ‘are employees who may be sponsored by their employer nervous about their employer finding out that they are filing in the EB-5 petition after the employer has invested money and time in helping them with their H1-B visa? Is that a reasonable concern?
Yes, I mean for some people it might be a sensitive subject and we can totally understand why. The employer has invested in this employee that spent ten or fifteen thousand dollars or so on putting together this petition for them and they’re holding a job offer open to them while this is in process and the employee is waiting for their visa number to become current. There is this sort of level of concern by the employee that maybe if they go off on their own and try to find their own green card it might make them fall out of favor with their employers so to speak so we understand that. And that’s really a case by case thing.
You know some employees have great relationships with their employers and their employers may think that’s a great idea. Other employers if they found out about that may not see it that way. So, you have to be somewhat aware of the relationship that the employee has and that’s really their decision about whether to do that. An employee is going to know whether or not something like that is going to affect their employment with their employer. So, you obviously don’t want to have them pursue something that they aren’t comfortable with, but it’s something to consider for sure.
I asked Sam if it is a good idea to consult with the immigration attorney for the employer.
Oftentimes the investor (we’re really talking about Indian nationals here) will go online research about EB-5 and they’ll talk amongst themselves or maybe they have a colleague or a friend or they know somebody that has done this themselves. And they’ll have questions but they’re not quite sure who to contact about that and maybe it might be beneficial for them to contact their immigration counsel for their employer, but again that depends on their relationship with their employer and that may not be a good idea for some people if they feel like it will be a problem. They may want to go seek their own immigration counsel to pursue this. If they don’t necessarily want their employer to know. So, it’s definitely something to think about and we come across that set of circumstances frequently.
I wanted to know can the employer find out about the employee filing a petition? When the employee files the EB-5 petition, is there some type of notification from USCIS that will go to the employer or its human relations department? Will my boss find out if I file?
The employer is not really going to know. Let’s liken this to a similar situation, let’s say that the employee gets married to a U.S. citizen and they file a green card petition that way and they get their green card through marriage. I mean look, life happens, and things happen and people’s circumstances change. The employer is not going to know that person unless they told him they got married for purposes of tax treatment you know HR and things like that. They might find out that way but they’re not going to find out from immigration necessarily that and I-130 petition has been filed by their new U.S. citizens spouse.
Similarly, USCIS is not going to notify human resources of their employer that the investor filed an EB-5 petition. So, no, there’s nothing really to be concerned about there necessarily. It’s quite often that clients of ours who do this concurrent process will go through and file their I526 and adjust their status and they go to work with a green card one day and they just let HR know that “here’s my green card” and they find out that way. So you can’t expect to live your life in a vacuum, you know, life changes and circumstances change and this is just an option for people who are looking to pursue it.
Moving along, I asked Sam how an investor fund their EB-5 investment and what the total amount is?
Ideally if this person has been employed in the United States and they have a good income and they can leverage that income to serve as their investment in the the EB-5 program, that’s a very nice set of circumstances to have. That’s really kind of like the best circumstances where they really just have W-2 income and you’re filing their tax returns as proof of that and things of that nature. That’s a good way for them to document their source of funds.
What are common scenarios for Indian investors?
A common scenario that we have with our clients from India in this situation is, they have a house and perhaps they’ve paid off the mortgage on their house and they’ll get a new home equity line of credit for example against their house and use those proceeds to service as their investment principle in the EB-5 program. That’s very common as well and then other clients will combine domestic income that they’ve earned here through employment. Maybe, proceeds from a home mortgage that they’ve gotten in it and possibly a gift from a relative abroad that we can show source of funds from. And then they stitched together that way and all of those scenarios are perfectly fine and perfectly acceptable and provable. And that’s the general way that most nationals from India come up with the funds for the EB-5 program.
I wanted to know more about the source of the EB5 investment capital. Do the funds have to come from overseas or can they be funds that are in a U.S. bank account or here in America and can investors use funds from friends and family?
The funds just have to be from a local source. There’s nothing in the regulations that say that the funds have to come from overseas, they just have to show that they were earned lawfully. People may think that if they are here in the United States unlawfully that they can’t use the income here which would be true because they didn’t really earn that income lawfully because you didn’t have work authorization, but if you’re hear on valid non-immigrant visa status and you’re an H1-B visa holder, you’ve been employed and, it’s all valid, you can you use all that income that was lawfully earned here in the United States, it doesn’t have to necessarily come from abroad. You can absolutely use income that’s earned here in the United States. Similarly you don’t even have to be here in the United States but you may own property or investments here in the United States and that income is here in the U.S. That’s certainly lawful as well. So yes, it doesn’t have to entirely come from abroad or all from abroad. Domestic earnings here in the U.S. as long as they’re lawful can be used for EB-5.
Can EB-5 investors use gifts from friends or family to make their investment?
Yes; absolutely. As long as it’s a true gift. And you know, it’s money that can be sourced and there’s a clear path of funds and there’s clear paper trail and documentation about where the person giving that money got that money from the beginning. Same set of circumstances and burden of proof are required from that person giving the money that the investor would have to show. So, you have to provide that documentation as well, so as long as that documentation exists and the source of those funds being gifted can be obtained then absolutely money can be gifted.
I asked Sam, “can you discuss the H1B visa? What are the H1B visa requirements? Can you compare the H1B visa to the EB5 visa?
The H1-B program is problematic in some ways. It’s the most common employment-based work visa that we have in the U.S. that we offer to people. It’s a visa that requires a specialty occupation, meaning that the job has to be one that requires at least a bachelor’s degree in specific fields that the employer has to have that relevant bachelor’s degree or equivalent work experience to be qualified for that position. So it’s really common for people who are coming out of school. They’re here as a student and want to transition into the workforce here to apply for an H1-B. The issue for H1-B is that they’re subject to an annual quota. So, there’s only a certain amount of H1-Bs that the government allots for people every fiscal year and those are used up usually within the first week that you can apply for H1-B which is the first week of April.
So the government’s response to that issue is to create a lottery system or as basically if you want to be eligible for an H1-B visa with the start date of October 1st in the year, you have to submit your application within the first five days of April to be considered in the lottery and they’ll randomly select 85,000 or so applicants just truly randomly. With the way that the numbers work, last year we had about 200,000 applicants for roughly around 85,000 visas, 65,000 roughly for people with bachelor’s degrees in another, carve out 20,000 for people with U.S. master’s degrees. So, do the math. The odds of being selected could be somewhere around 30 maybe 40 percent for people with master’s degrees. That leaves a lot of people out to dry.
If you don’t succeed in the H1B lottery, what are your alternatives?
In terms of being selected, so then what do they do. Right? And then they’re left scrambling. They either have to leave go back to school or find another visa category, so on and so forth.
I asked Sam, if you are selected for the H1B lottery, what happens and what is the time frame?
If you are selected in the H1-B lottery, you have the H1-B for up to six years. If you’re from India and you’re looking to transition into a green card, the employer will normally start that process in your fourth or fifth year in the H1-B status and depending on whether or not you’re in the EB-1 or EB-2 category, you might be waiting for another eight, ten or twelve years before you can actually get the green card. So, if you add all that stuff together, you know 18 years, maybe 15 years, 12 years depending on the backlog when you combine the time and H1-B status, the wait time and the EB-2 or EB-3 category, just to get a green card.
Is the EB5 visa a good alternative to the H1B visa?
That’s the reason why people from India who are here on H1-Bs and they’re looking for green card options or you know looking hard at the EB-5 option because if you’re on an H1-B and you submit a I526 application, that I526 application is taking about 18 to 22 months to adjudicate. Once that’s approved as long as you’ve been maintaining your H1-B status, you can file an adjustment of status which takes about four to six months to adjudicate and you’ve got your green card in hand at that point. So you’re looking at somewhere around 24 to 28 months as opposed to 15 years.
I asked Sam what are the other things to consider when looking at the H1B, EB2, EB3 and EB5 visas? Let’s weigh the pros and cons.
There are things to consider as well. The green card that you get with the EB-2 or EB-3 petitions, it doesn’t have any conditions. For example, you do have to follow through with the offer of employment and continue to work for that point for a period of time before you could say switch jobs for example. The EB-5 green card that you get is conditioned for two years. So there is a conditional period with the green card and at the end of that two year period you have a 90 day window to submit an 829 application to remove the conditions so that you can get your unconditional regular green card. To fulfill those requirements, you have to demonstrate that the jobs that you serve were going to be created have been created, the investment remains at risk and deployed to the project and once you demonstrate that, your regular green card will be issued. So, I mean look there are some differences between the benefits that you get. I mean if you pick a good project, the project’s on point, it’s really just a matter of filing it and just making sure that you file it on time and you’ll get your regular green card. But, you know, these the exact conversations that we have our clients. We weigh the pros and cons. We talk about their individual circumstances because everything is case by case. And some people have different concerns than others. But in terms of time that’s kind of what you’re looking at and the reason why EB-5 has become very popular with H1-B visa holders from India.
I have understood that in some cases both spouses’ husband and wife are here on work authorization under the H1-B. When it comes to EB-5, I wanted to know does it only take one of the two spouses to be approved under the EB-5 petition and that gets American citizenship? If the Petitioner is approved, is it for their spouse and all children under the age of 21?
Yes that’s correct. First off, because they’re here in the U.S. and are U.S. persons, the EB-5 investor has to be accredited. So they have to make sure that their income requirement or their net worth are of a level that allows them to invest as an accredited investor here in the U.S. So those are things that take into account and when we’re talking with clients sometimes it just goes back to the point of maybe they want to do this subtly and sort of under the radar or something. They’ll say “well the person who is the primary beneficiary on the H1-B visa holders may say you know “look, I think it might be hard for me to kind of keep this under wraps and I’m not sure how my employer would think about this. Can my spouse who is here on H4 visa be the primary investment?” The answer to that question is yes. Almost always income is you know joint income as long as that joint income can be sourced. The spouses on the H4 visa can be the primary applicant for the EB-5. And that would include the spouses here on H1-B and also children under 21. And everybody is included in the application and everybody gets green cards.
Well, we thoroughly covered a range of topics! I am happy I was able to share to share what I think is great advice, guidance and strategies for EB-5 investors. You can hear the full podcast by clicking on the following link which features the podcast series on the EB-5 Investor Portal https://www.eb5eb5.com/eb-5-podcast/.