How Misplaced EB-5 Fears and Misconceptions are Hurting H-1B Workers’ Green Card Dreams?

There are a million Indians in the US waiting for their EB-2 and EB-3 applications to be processed. They face a waiting period of 54 years but that’s based on the forecast that around 420,000 applicants will die before final adjudication. Otherwise, the waiting period stretches to an absurd 134 years.

Long processing times is just one of the many risks that H-1B visa holders face when waiting for their green card. There is the ever-present risk of loss of status if laid off by their employer. Their career decisions are constrained by the fact the H-1B visa is an employer-specific work permit. Political developments and factors impact how H-1B visa rules are interpreted and enforced. Further, spouses and children too bear the brunt of all the uncertainty.?

Despite all this, Indian H-1B workers in the US are hesitant to explore the EB-5 visa, which definitely offers a clearer and faster route to permanent residence in the US. The reason—their misplaced fears and misconceptions about EB-5.

Misconception— Similar Processing Time for EB-2, EB-3 and EB-5

Unlike other EB category visas, investors qualify for conditional permanent residence when their I-526 is approved. This means the investor, for all intents and purposes, begins enjoying the benefits of privileges of permanent residence upon I-526 approval. Further, the EB-5 Reform and Integrity Act (RIA) has been a gamechanger has set aside a third of the annual quota of visas for rural areas, targeted employment areas (TEAs), and infrastructure projects. Also, a record 14,100 unreserved EB-5 visas are available in FY 2024 due to carry forward of reserved and unreserved visas not utilized due to the pandemic.

Finally, there has been a general improvement in the speed of processing of unreserved EB-5 visas too. In contrast, there is no legislative or administrative intent to speed up processing of EB-2 or EB-3 visas.

Misplaced Fear—EB-5 Means Loss of Investment

Making an at-risk investment is a fundamental requirement to qualify for the EB-5 visa. So, the risk of loss of investment is an intrinsic and unavoidable part of the EB-5 process. This often deters H-1B workers from borrowing from their 401(k) or using their ESOPs windfall to apply for the EB-5 visa. However, at-risk investment does not mean certain loss of investment. Investing in an EB-5 project is no different than any other investment. A flawed strategy can lead to loss of investment irrespective of the choice of asset—equity, gold, real estate, or an EB-5 project. Chances of recovery of the EB-5 investment depends on choice of Regional Center and the project, extent and quality of due diligence, proper risk assessment, and, most importantly, the choice of the investment advisor.

Instead of exaggerating the risks involved in the EB-5 investment, H-1B workers in the US can improve chances of recovery of investment through a realistic, careful, and conservative assessment of their options.?

Misconception—Redeployment is a Dead End

The issue of redeployment has been settled to a great extent by the RIA, with USCIS guidance currently requiring EB-5 investors to maintain the at-risk investment for two years from date of investment, although there is discussion within industry circles that may seek to challenge that interpretation in the near term. Pre-RIA investors are still required to maintain the investment at risk through the conditional permanent residence. However, this does not automatically entail loss of investment or increased risk of EB-5 rejection.

A professional advisor should anticipate the need for redeployment and plan and prepare for it accordingly. From guiding investors to EB-5 offerings that are structured to adhere to USCIS rules and regulations for redeployment to focusing on EB-5 offerings with clear and viable exit strategies to maximize the opportunity for a return of investment upon I-485 approval, many key aspects can be planned and guided with minimal risk of last-minute surprises.

Misplaced Fear—EB-5 is a Fraud-Ridden Program

Instances of EB-5 frauds may make for great headlines but there is more to the EB-5 program than a few outlier cases. Frauds occur in all types of investment activities. Instead of completely avoiding this option, it makes sense to find ways to safeguard oneself and qualify for the fast-track green card through the program.

How do EB-5 frauds happen? What red flags or warning signs must investors focus on? When does the responsibility of your EB-5 advisor begin and end? What remedies does an aggrieved investor have?

These are some questions that H-1B techies can pose to their advisor before signing on the dotted line. Professional EB-5 advisors should clearly explain their legal and fiduciary duties and offer the necessary details to help investors make an informed decision.

Misconception—EB-5 is Easy and Simple

From completely avoiding the EB-5 program to treating it nothing more than transfer of funds for the green card, H-1B workers often prefer swing between the extremes. Rules may permit the New Commercial Enterprise (NCE) to disburse funds to the Job Creating Enterprise (JCE) in a staggered manner. However, this does not mean applicants can use piecemeal deployment and use the EB-5 visa to temporarily extend legal status until EB-2 or EB-3 approval.

Whether to continue with the H-1B or switch to EB-5 Employment Authorization Document (EAD) is a complex decision. Investors can hold H-1B and EB-5 EAD together but cannot use it simultaneously. Your non-immigrant work permit will lapse the moment you start working on your EAD.

Whether to switch to the EAD or continue with the H-1B requires careful analysis of your career goals, future plans, and likelihood of I-526 rejection.

EB-5 combines two complex processes—investment and immigration, and the two need not always overlap. The process of identifying the right Regional Center ought to begin well before I-526 filing. Similarly, withdrawal of investment will depend on the contract with the Regional Center and can happen well after I-829 approval, especially if the funds have been redeployed. ??

H-1B techies never hesitate to seek professional help for their EB-2 or EB-3 petitions but often treat EB-5 investment advice as an unnecessary expense. This results in flawed strategies leading to wrong decisions and, loss of investment or even I-526 rejections. This creates a vicious cycle where other H-1B visa holders—those likely to benefit the most from the EB-5 advantage—choose to stay away or follow a flawed approach towards the EB-5 visa.?