The EB-5 Visa in Silicon Valley with Sophie Alcorn (2 of 3)
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 The EB-5 Visa in Silicon Valley with special guest and immigration attorney Sophie Alcorn. Sophie’s firm Alcorn Immigration Law helps corporations, start-ups and small businesses in Silicon Valley sponsor the biggest talent in technical fields for U.S. Immigration. Alcorn Immigration Law has a 95% success rate in defending immigration and innovation with visas, green cards and citizenship.
This article is one of three in a series from EB-5 Immigration Attorney Sophie Alcorn.
I mentioned that there may be some in our audience listening today that are unfamiliar with EB-5. So, I wanted her to give us a general overview of the program for example… What does EB-5 stand for? How does the EB5 program work in layman’s terms?
So EB-5 stands for employment based fifth preference. And there are three types of green cards in the United States. There’s the green card lottery which is only for certain countries and which is very random. There are family based immigrant visas or green cards which depends on your husband, mom, dad, sister, somebody with a certain relationship to you sponsoring you for a green card or there are employment based green cards which is what the EB comes from and employment based green cards could be for brilliant scientists with extraordinary ability that could be for university researchers. They could be for multinational executives transferring from one branch of the company to another that could be for professionals with advanced degrees that could be for skilled workers. So those are all the preferences. Number one through four.
And then EB-5, the fifth preference is the investor green card option and this originally started back in the 90s with a route for which you invest one million dollars in a new U.S. company that creates 10 jobs for Americans. And if you do this then you’re able to get a green card and live for the rest of your life in the United States as a permanent resident. And once you’re a permanent resident you have a green card and you could potentially apply for citizenship one day. And then a little bit later on there was a new variation that came out which is with regional centers and so it has some benefits, it’s a lower financial threshold it’s only $500,000 and you also don’t have to actively run the company, you can be a passive investor and the 10 jobs don’t need to be created directly by the company.
They can be created indirectly nearby in the geographic area in which you’re locating your project. So that opens up the possibility of having construction land development projects that use a lot of construction workers and contractors instead of directly employed employees. And those projects can qualify for this EB-5 Regional Center. So yes! With the EB-5 you can invest $500,000 into a regional center. It creates indirectly 10 jobs in the local economy. And the person who invests the money is on a path to getting a green card. There are some wait times but essentially you apply it could take anywhere from one and two and a half or three years right now to get your first green card. You have it and then it’s valid for two years. As in you’re a conditional permanent resident and then there’s the filing window at the end of the two years where you do another immigration application and you’re applying to remove the conditions on your permanent residence. And you’re saying “hey the project did everything it said it would, the jobs were created, the money was invested, there was no fraud, everything is legitimate”. And if the government says “Yes” then they say “OK so you’re no longer a conditional permanent resident, you did everything you said you would, you follow the laws, now you are a full-fledged permanent resident for the rest of your life and you can live and work anywhere in America and you can become a citizen one day.
Sophie is involved in other immigration options as well.
I think one of the values that my practice adds to somebody who is considering pursuing this is we do not limit ourselves to EB5. It’s absolutely a substantial part of my practice and our and what our team does. But we’re familiar with the whole range of immigration options of every type of case really. And so that helps us advise our clients about is this really the best option for you. You know oh did you know that you actually have this other path that could be faster. Sometimes people want to know that. Often that’s not the case. And EB-5 really is a great and the best route. But it’s important to have the whole universe of options in U.S. immigration law at our fingertips so we can provide the best advice and understand the whole immigration context for our client earlier.
The H-1B program offers a way for America to invite and keep some highly skilled and talented individuals here from other countries in the United States. With the current administration deciding to delay and possibly rescind the international entrepreneurs rule. How is this affecting certain people? And do you have any advice for those affected? I mean, this is a big surprise to a lot of individuals who are here in the States on these visas. I wanted to know what can they do?
Thanks! That’s a great question. So, it raises very many things which are all important to touch on I think. And one of them is what’s so first let’s break it down.
So what’s going to happen with H-1B. So the H-1B visa is for professional workers who have a bachelor’s degree or the equivalent amount of work experience in a certain field and they’re coming to the United States they’re being sponsored by an employer to do that job. And it’s required that the employer sponsor them and pay for the entire immigration process. And so it’s very difficult for qualified candidates to find jobs and employers who are willing to sponsor them sometimes because that’s a lot to go through. And on the other hand there are this has come into the news a lot because there are a few giants particularly Indian consulting companies which sponsor very many Indian workers each year. Tens of thousands for H-1B visas and then outsource them to U.S. corporations in the United States for project work. So Congress limited the number of H1-Bs each year to about 80,000 I believe. And last year for example there were over 230,000 people who applied for H1-Bs which is where that lottery comes in and why there’s a one in three chance of getting selected and the EB-5 has come under fire a lot because there have been reports of some companies firing U.S. workers and replacing them with H-1B workers. There’s been a lot of rhetoric by the current political administration against this type of visa. And so you often hear about is this going to be reformed? Is this going to be changed? And at the beginning of the most recent legislative session in January yes there were a lot of bills that were raised to reform it and some of them talked about increasing the minimum salary for H1-Bs to make it more prohibitive for companies to sponsor them. Some of those I think mentioned reducing the total number of H1-Bs. Other bills have proposed requiring the employer to go through a Labor certification analysis where they would have to try to recruit U.S. workers prior to being eligible to sponsor somebody for an H-1B. They have to prove that there are no qualified, willing and able U.S. workers to do that job. None of those bills have actually happened yet and the only change to this process has been the ending of the premium processing service. So it has made it more difficult for people to get quick responses on their H1-Bs. So instead of two weeks if you pay extra. Now everybody has to be in the same line which takes about seven months. This has made it a lot more difficult for professionals to change jobs and switch to new employers because there’s a lot more risk involved now. But then a few weeks ago there was some other leaked information that Politico reported about what immigration reform that the presidential administration is actually participating in what that reform would look like.
Are there immigration reforms proposed?
And so… Four big likely changes that might happen if and when actual immigration reform happens with Congress will be that the overall level of immigration will be decreased. So right now there’s about 1 million green cards issued each year and in the future if this proposal goes through there would only be about 500,000 green cards being issued. They are also going to dramatically reduce family based immigration. They might cancel the green card lottery entirely. There might be additional options for merit based immigration based on professional achievements. This could definitely increase very long already very long wait times for people from China and India. But right now this hasn’t happened.
The EB-5 program is still intact at least for the next couple of months until the next sunset reform will probably be addressed separately. Then more general immigration reform all of this turmoil and anti-immigrant rhetoric that we hear coming out of our government is leading to a lot of fear for immigrants and our clients about how is this going to affect me. What is this going to mean. How much are my chances for staying here. How much will they be reduced.
I wanted to know more about the immigrant entrepreneur rule. What is the immigrant entrepreneur rule?
And another thing you had mentioned Floyd was the cancellation of the immigrant entrepreneur rule. That is significant too. It was going to be a new immigration pathway that the Obama administration had created that would allow foreign entrepreneurs who have started companies and so usually in Silicon Valley they get angel investment or venture capital investment if their company would have raised over $250,000 and they own at least 10 percent and they want to come here to establish the company and run it and create jobs for Americans. They would have had an additional path to immigrating and staying in the United States. The Trump administration pulled that off the table. They’re looking at it again. So all of this is to say that an already complicated situation is becoming more complicated and so people are using the EB-5 five right now in a wide variety of situations to get them an option to émigré that they fear might be quickly disappearing.
I wanted Sophie to give me some examples.
So, I’ll mention two recent clients who are in unique situations and I’ll do it anonymously because they need to protect their privacy. But just the general situation. So you know the typical profile over the last several years has been a Chinese family. Who wants to be able to get green cards and move here with a large focus on education for the children. But the two recent situations that we’re helping people with. One of them is an Indian professional on an H-1B who works at a U.S. company and they’ve sponsored him for a green card. But it’s probably going to take another 10 or 15 years if nothing changes. But as we just talked about things are going to change and it’s going to get more difficult. And he just really wants to be able to work independently from his current employer and have a startup and not need to worry about who’s who is going to get a paycheck from or that if his if there’s something goes wrong with his job that that could mean that he has to uproot his entire family and go back to India. So his family is helping him pool together money to meet the $500,000 threshold from their properties and with loans and various sources. He also has savings from his job in the United States. You can get a home equity loan line of credit. So he’s being very resourceful to make this happen because he wants to take control of his future into his own hands so that he and his wife can start a family and know that they’ll just be able to stay in the United States.
And then another client is a startup that has a huge amount of success with raising venture capital recently and their valuation skyrocketed. And they have somebody in another country who’s been deeply involved in creating the product and they’re going to use some of that money that the company is now worth. So that the company can help this person get an EB-5 green card because they don’t even want to deal with the H1-B lottery and they know they’re serious. They just want them to be able to live here. It might take a while but let’s just make this happen in one of the least risky ways. If you find a good regional center, this is one of the least risky ways to do things (with EB-5) So there’s a lot of uncertainty. The law will probably change and people who hadn’t previously considered the EB-5 program as an option are now seeing it as a good option.
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/.
Make sure you watch for additional articles as this is a series of articles from Sophie Alcorn.
Please remember that the information in this article and the podcast series is for informational purposes only and should not be used as a substitute for individualized advice from qualified immigration counsel.