The H-1B Visa
The EB-5 Program as an Alternative
A growing number of companies rely on H-1B visas to hire people from overseas for specialized roles in their workforce.
As the demand for these visas is high and exceeds the number of H-1B visas available, the H-1B lottery is used to randomly select applicants to meet a mandated quota.
However, for a foreign national with a job lined up in the United States, their chances of winning the lottery are less than 20%.
This article discusses the H1-B visa and an alternative way to obtain a Green Card: through investment in the EB-5 Green Card program.
The H-1B Visa
The H1B visa is a non-immigrant work visa under the Immigration and Nationality Act of 1965 that allows U.S. companies to employ (sponsor) foreign workers (beneficiaries) in a specialty occupation.
To fill a specialty occupation, the foreign worker must have theoretical or technical expertise in a specialized field of knowledge.
Specialty occupations include, but are not limited to, positions in technology, science, dentistry, engineering, mathematics, medicine, law, journalism, economics and architecture.
In FY 2021, around 50% of H-1B visas went to foreign workers in the professional, scientific and technical services industries.
The foreign worker must also have, as a minimum, a bachelor’s degree (or equivalent) in the specialty field in which they will be working, and any state license required for practice in that field.
However, if the applicant is an experienced professional without a degree, then in some cases, three years of experience can be a substitute for each year of education.
The H1-B visa is a temporary visa and is tied to the sponsoring employer. It is valid for up to three years and can be extended once for a further three years. After that, the period can be extended further in certain circumstances.
Visa holders must continually be sponsored by an H1B employer in order to hold H1-B visa status; else, they must leave the United States.
Holders of H 1B visas:
- Are eligible to bring their spouse and unmarried children under 21 with them to the United States as H1B dependents under the H-4 visa category. (H-4 visa holders can stay in the United States as long as the H1B visa holder retains their status.)
- Can apply for permanent resident status (a Green Card) after six years as an H1B worker.
- Can change to another H1B sponsoring employer. (If they change employers while they are applying for a Green Card, they have to start that application process all over again.)
- Can work concurrently in a second H-1B position.
In 1991, Congress mandated a limit on the number of H-1B visas that can be issued each fiscal year.
The present cap of 65,000 was set in 2004 (reduced from 195,000), and was augmented with an additional 20,000 visas for foreign nationals holding masters’ degrees or higher from U.S. universities.
The cap does not apply to visa applicants who work at universities, not-for-profit organizations affiliated to universities, and not-for-profit and government research facilities.
When the demand for H-1B visas exceeds the mandated cap, United States Citizenship and Immigration Services (USCIS) holds an open lottery. No preference is given to any applicant based on their qualifications, country of origin, salary, etc. So the most highly skilled foreign workers have no priority over anyone else in the selection process.
The H-1B Lottery Process
The annual H-1B visa draw is a computer-generated random selection process used to select registrants for H-1B visas and has been held every year since FY 2014 as the demand for visas has consistently exceeded the 85,500 (total) quota.
The sponsoring U.S. employer files a petition on behalf of the foreign national that they wish to employ.
A single sponsor can register for multiple potential employees.
And multiple companies in the same corporate family can submit a petition for the same employee, provided that they have their own need to employ that person.
These are the steps in the process.
- The sponsoring company must submit a Labor Condition Application to the Department of Labor attesting to compliance with the requirements of the H-1B program.
- The sponsor registers their prospective employee online with the USCIS and pays the $10 registration fee within a specified registration period. Only basic information about the sponsor and the beneficiary is required.
- If there are more registrants than the cap, USCIS conducts a lottery for the 65,000 H-1B “regular” visas followed by a lottery for the 20,000 “master’s” visas. Those employees with a master’s degree effectively have an increased chance of selection.
- If selected in the lottery, the sponsoring employer has 90 days in which to submit Form I-129 Petition for a Nonimmigrant Worker.
- If approved, the beneficiary is issued an H 1B visa and is then eligible to start work in the United States from 1 October that year.
- After six years as an H1B visa holder, the employee can apply for a Green Card and live permanently in the United States.
- Offering foreign workers the option of enrolling in another U.S degree program and continuing as student employees.
- Offering to transfer foreign employees to overseas offices and wait to register them the following year for the lottery.
- A less than one in five chance of being selected.
- The possibility of stricter requirements being imposed at any time or even a suspension of the program.
- Limits as to who they can work for.
- A rise in remote working that will cause more companies to outsource jobs overseas.
- They can study anywhere in the country and can also study overseas without losing their permanent resident status.
- They can compete on an equal footing with U.S. citizens in seeking admission to some of the best educational institutions in the world.
- Many universities and colleges give priority to permanent residents who reside in-state by capping the number of international students they will accept.
- They can enjoy lower tuition fees in their states of residence.
- They can engage in off-campus employment to help fund their education.
- They do not have to periodically renew their student visas.
Those who are not successful in being selected through the lottery process have to wait for the next fiscal year before trying again.
Results of the H-1B Lottery
The approval rate of H-1B visas was at an all-time high at 96% in FY 2022, a significant improvement on FY 2019 where the rate fell to 85%.
This low approval rate of H-1B visas in FY 2019 was largely a response to the Trump administration’s “Buy American and Hire American” executive order, which imposed stricter requirements for companies that wished to employ foreign nationals for specialty occupations.
The executive order was revoked in 2021.
The Trump administration also suspended the issue of H1B visas from June 2020 to March 2021 during the COVID-19 pandemic, arguing that these visas posed a risk to the U.S. labor market in its economic recovery from the pandemic.
But as Britta Glennon, an assistant professor at the Wharton School of Business, observed in a 2020 working paper, when companies are dependent on H-1B visas and faced with an increase in restrictions, they are more likely to invest in overseas operations than to hire American workers.
Glennon demonstrated that for every 10 H-1B visa positions that went unfilled, three jobs were sent overseas; the work for the seven other jobs was spread among the company’s current employees.
Glennon’s research suggested that policies that are intended to shift job positions from H-1B workers to U.S. workers result, in part, in increased outsourcing.
Despite the improved H1B visa approval rates, the positive impact is largely offset by the less-than-20% chance of even securing an H-1B visa through the lottery.
A student work visa (F-1 visa) allows an international student to work for an employer for a maximum of three years after they graduate.
They must then return to their home country unless they can obtain a work visa such as an H-1B through the lottery.
This has led U.S. companies to devise alternative means to retain international employees who fail to be selected in the H-1B lottery, such as:
For an international student, the EB-5 Green Card program is a reliable alternative to obtaining permanent resident status if they have the funds.
EB-5 investors can avoid the following risks associated with the H-1B category:
The EB-5 Program as an Alternative
International students and other potential immigrants with access to $800,000 in lawfully sourced funds should consider the EB-5 Green Card program.
Legal sources of funds for an investment through the EB5 Green Card program include salary earnings, the sale of assets, inheritances, and money provided by family or friends.
A foreign national who successfully invests through the EB5 Green Card program can obtain permanent resident status (a Green Card) for themselves and their dependent family members.
The EB-5 Program
The U.S. government established the EB-5 Green Card program in 1990 to promote economic growth in the United States through the creation of jobs for U.S. workers.
A foreign national and their dependent family members, including international students, can obtain employment based Green Cards by investing in a new job-creating commercial enterprise in the United States under the EB5 Green Card program.
They can invest directly in a business or be part of a pool of investors who invest through a regional center. Projects sponsored by a regional center are typically real estate developments or projects requiring considerable funding. Investing through a regional center is the most popular choice.
Employment based Green Cards allow investors to live and work in the United States for a period of two years.
At the end of the two-year period, they earn a permanent employment based Green Card provided that the requirements of the EB5 Green Card program have been met.
A permanent resident with an employment based Green Card can live permanently and work anywhere in the United States.
They can choose their work and are not limited to working for their sponsoring employer like those with an H-1B visa. They also have full access to higher education and health care.
There are many steps in the EB5 Green Card process on the pathway to permanent residency but it is widely considered to be the quickest and most straightforward way of doing so.
EB-5 Green Card Investment as an Option for International Students
With planning, prospective international students can skip the H 1B lottery altogether and commence the EB5 Green Card process, well before they plan to study, and secure an EB5 Green Card.
In the United States, Green Card holders enjoy considerable benefits over students on other types of visas.
How the EB-5 Green Card Process Can Help
Unlike other non-immigrant visas, the H1-B visa allows for dual intent. This means that even though they hold a non-immigrant visa, the visa holder may be likely to pursue a Green Card in the future.
The holder of a valid and current H1-B visa is permitted to file multiple petitions at the same time to USCIS. So, an H1-B visa holder can convert to an EB5 visa and go through the Green Card application process without forfeiting their visa.
However, they need to maintain their H-1B status until approval is granted by United States Citizenship and Immigration Services for their I-526E petition, and, subsequently, their I-485 Application to Register Permanent Residence or Adjust Status.
A foreign national interested in the Green Card application process need not be dependent on a less than one in five chance of selection in a lottery and executive orders that impose restrictions or bans: the EB-5 Green Card program offers a more reliable alternative.
Potential immigrants should consider the EB-5 Green Card process as a stepping stone to permanent resident status for themselves and their families, as those who hold them are free to live, study, travel, and work in the United States.
To learn all about the EB5 Green Card program and how it can provide an alternative pathway to living permanently in the United States, contact EB5AN.