H-1B Investment Options: Secure Your Finances and Get an EB-5 Green Card

Hundreds of thousands of foreign workers are employed in the United States thanks to the H-1B visa. It’s the country’s most popular nonimmigrant work visa program.

However, when it comes to investing, H1-B visa holders, as the nonimmigrant visa holders they are, face additional red tape compared to U.S. citizens or permanent residents.

This can make it challenging to build wealth or to apply for an investment visa through the EB-5 Program.

This article explains the H1B investment options available. We’ll begin with an overview of general investment strategies, before focusing in on our main area of expertise: how to get a Green Card through the EB-5 Immigrant Investor Program.

It’s also smart to consult with an immigration attorney and a financial advisor before starting the process.

What Are H-1B Investing Options?

Many professionals on H-1B visas try to build financial security via income-generating activities while working in the United States.

The good news is that U.S. immigration rules generally allow H-1B holders to invest without risking their immigration status, as long as those investments remain passive.

Understanding what qualifies as a permitted investment and how to stay compliant can help you build wealth without risking your visa status.

What is H-1B investing?

H-1B investing refers to placing your money into financial assets while you are in the U.S. on an H-1B work visa, without actively managing or operating a business.

The key distinction is passive ownership versus active involvement. As long as you are not running day-to-day operations or providing services, most traditional investments are allowed.

Common H-1B-friendly passive income sources and investment options vary in risk tolerance. They include:

Stock trading

Buying and selling publicly traded stocks, ETFs, or mutual funds is generally permitted. These investments are considered passive as long as you are not trading on behalf of others or operating as a professional trader. But you have to consider market volatility.

High-yield savings accounts (HYSAs)

HYSAs offer higher interest rates than standard savings accounts and are a low-risk option for parking cash while earning interest.

Certificates of deposit (CDs)

CDs are fixed-term deposits that pay guaranteed interest. They are simple, predictable, and clearly passive.

401(k) plans

Many H-1B workers participate in employer-sponsored 401(k) plans. Contributions can be made pre-tax or after tax (Roth), depending on the plan, and employers may offer matching contributions. It reduces your income tax liability. Make sure to choose a firm that lets you submit a foreign address.

Traditional and Roth IRAs

If you meet income and residency requirements, you may be eligible to open an Individual Retirement Account. Traditional IRAs offer potential tax deductions, while Roth IRAs provide tax-free qualified withdrawals.

Health savings accounts (HSAs)

If you are enrolled in a qualifying high-deductible health plan, an HSA can function as both a healthcare and long-term investment tool with significant tax advantages.

Employee stock purchase plans (ESPPs)

Some employers allow employees to buy company stock at a discounted price. These plans are usually allowed because participation is passive and tied to employment benefits.

Taxable investment accounts

Standard brokerage accounts that are not retirement-specific allow flexible investing in stocks, bonds, and investment funds, though they are subject to capital gains and income taxes.

Real estate

Real estate investments, i.e., purchasing property for personal use or as a rental investment, are generally allowed, provided you are not actively managing tenants, maintenance, or operations.

FCNR deposits

Foreign Currency Non-Resident (FCNR) accounts, often held in overseas banks, allow you to maintain deposits in foreign currencies while earning interest.

What are the legal requirements for H-1B investing?

Before you start to generate income via investing, you typically need a few basic items in place:

• A Social Security Number (SSN), usually issued after you begin work in the U.S.
• Alternatively, an Individual Taxpayer Identification Number (ITIN) if you are not eligible for an SSN
• A personal U.S. bank account to fund investments and receive returns

These are standard requirements for opening brokerage accounts and complying with U.S. financial regulations, but it is also important to be aware of tax regulations.

Steps H-1B Holders Should Take to Make an Investment

If you are on an H-1B visa and want to invest, the key is to stay within the visa’s strict rules on employment and passive income.

The steps below outline how to structure investments to remain compliant with U.S. immigration and tax regulations.

1. Understand what H-1B holders are legally allowed to do

H-1B visa holders may earn passive income, but they are not allowed to actively operate or manage a business. The moment an investment resembles “work,” it can create immigration issues.

2. Decide your investment category (passive only)

Focus on investments that clearly generate passive income. Public market investments like stocks, ETFs, mutual funds and index funds are typically safest from a compliance standpoint. Real estate investments are also acceptable if management is outsourced.

3. Set up compliant financial infrastructure

Most investors will need:

• A U.S. checking account
• A brokerage account that accepts non-citizen residents
• An SSN or ITIN

Major U.S. brokerages commonly support H-1B investors, but you must:

• Accurately disclose your visa and residency status
• Follow all U.S. tax reporting rules, pay taxes, and make sure to avoid tax consequences and double taxation by reporting worldwide income and being aware of your taxable income, any tax benefits, and tax treaties.

4. Understand U.S. tax obligations before investing

H-1B holders are subject to U.S. tax laws on investment income, including:

• Capital gains taxes on profits from selling assets
• Taxes on dividends and interest income
• State and local taxes, depending on where you live

Tax treatment may also change as your residency status evolves.

5. Avoid “active participation” traps

Certain actions can jeopardize your visa, such as:

• Being named as a manager, officer, or director
• Signing contracts or checks for a business
• Providing ongoing advice or operational support
• Receiving income tied to labor instead of ownership

Keeping investments strictly passive is essential for maintaining compliance. It also helps to consult with an immigration attorney and a financial advisor beforehand.

What Is an Investment Visa?

H-1B workers can stay in the United States for no more than six years. They cannot count on job security.

Between 2022 and early 2023, U.S. employers laid off around 85,000 H-1B visa holders. Even tech giants like Amazon, Google, and Meta have been affected.

H-1B workers continue to face uncertainty in a volatile job market.

Thankfully, there are ways to lessen this uncertainty. You can gain lawful permanent residency status in the United States by investing in a U.S. business. This is a great way for H-1B workers and their qualified family members to live and work in the country permanently.

There are two main options for investment visas: an E-2 or an EB-5 visa.

What Is an E-2 investment visa?

An E-2 investment visa is a non-immigrant U.S. visa that allows nationals of certain treaty countries to live and work in the United States by investing in and actively managing a U.S. business.

It is designed for entrepreneurs and investors who want to develop and direct a commercial enterprise rather than work as an employee of a U.S. company.

Under an E-2 visa, the investor may enter the U.S. to operate and grow the business they invested in.

The visa also allows the investor to work legally for that specific enterprise, and in many cases, their spouse may apply for work authorization as well.

E-2 visas can be renewed indefinitely, as long as the business remains operational and continues to meet E-2 requirements.

To qualify, applicants must meet several key criteria:

• Be a citizen of a country that has an E-2 treaty with the United States.
• Make a substantial investment in a real, active U.S. business.
• Demonstrate that the funds are lawfully sourced and at risk.
• The business cannot be marginal; it must have the capacity to generate more than minimal income and ideally create jobs for U.S. workers.
• The investor must also play an active role in directing or managing the company.

For H-1B holders, the E-2 visa has notable drawbacks. Most importantly, it is a non-immigrant visa, meaning it does not provide a direct path to permanent residence.

Your lawful status becomes tied to the success and ongoing operation of the E-2 business. If the business fails or is sold, your visa status may be lost, creating additional risk compared to employment-based immigrant visa options.

What Is an EB-5 Visa?

The EB-5 Immigrant Investor Program allows foreign nationals and their qualified family members (spouse and unmarried children under the age of 21) to gain Green Cards by investing in U.S. businesses.

Each investment must create at least 10 full-time jobs for U.S. workers and last at least 2 years.

For those who have the required investment capital, it’s a relatively fast and straightforward pathway to lawful permanent residency in the United States.

Approved applicants can live, work, and travel nationwide. They also become eligible for additional benefits that come with permanent residence, such as:

• Access to the U.S. healthcare system.
• Access to social programs like Medicare and Social Security.
• Access to U.S. public schools and discounted tuition rates.
• Improved job market access and employability.
• Improved likelihood of gaining U.S. citizenship.

Why H-1B Workers Should Invest in an EB-5 Visa

The EB-5 program offers notable benefits compared to an H-1B visa.

Employment Flexibility

An H-1B worker who is terminated must find a new sponsor within 60 days. However, an EB-5 visa is not connected to your employment status.

As an EB-5 visa holder, you can work for any company without needing an employment sponsor.

Applicants are typically able to negotiate higher salaries because their visas are not dependent on sponsorship. Under this program, you don’t even have to be employed.

Travel Flexibility

EB-5 visa holders gain much greater travel flexibility. They can leave and reenter the United States freely, provided they maintain their U.S. residence and avoid extended absences that could suggest abandonment of permanent residency.

Family Members Benefit

An EB-5 visa holder can also bring their immediate family members to the United States. Family members will gain the same benefits of permanent residency, such as work and educational opportunities.

Plus, an EB-5 visa holder’s children can keep their Green Cards after they turn 21, unlike the children of H-1B holders, who must apply for their own visas upon reaching that age.

How Does the EB-5 Application Process Work?

Thanks to the EB-5 Reform and Integrity Act of 2022, the EB-5 application process is now easier for H-1B workers.

Most H1B visa holders are already legally present in the United States. They can apply to adjust their immigration visa status while still in the country.

Understand the Investment Requirements

One of the most important steps of the application process is to make a qualifying investment of at least $1,050,000 in a new commercial enterprise (NCE). An applicant can save money by choosing a project located in a targeted employment area (TEA), which qualifies for a lower minimum investment amount of $800,000.

The money must be kept “at risk,” or invested in the business, for at least two years. This means you cannot withdraw money from this investment during this time frame. Qualified foreign investors will then receive conditional Green Cards.

File the Right Forms

To change your immigration status quickly under the EB-5 program, concurrently file your I-526/I-526E immigrant petition with Form I-485 to change your status to temporary permanent resident.

Applicants who are located outside the United States must go through consular processing first and file Form DS-260.

Meet the Job Creation Requirements

The main requirement of the program is that the investment create at least 10 full-time jobs for U.S. workers. If the investor has met these and other requirements at the end of the two-year conditional residency period, they can apply to have the conditions lifted on their Green Card.

Note that the entire process can take longer than two years, depending on the individual’s background and the type of project they choose to invest in.

You can familiarize yourself with the other steps of the EB-5 investment process here.

How Can H-1B Holders Fund an EB-5 Investment?

H-1B visa holders can fund their EB-5 investment using one or more of the following sources.

Personal Savings
Such as a high-yield savings account or checking account. High-yield savings accounts offer greater interest payments and are a good place for an emergency fund.

Retirement Accounts
Withdrawals from a 401k retirement account plan are possible, but watch out for an early withdrawal penalty. You may have to pay taxes.

Health Savings Account (HSA)
HSAs are known for their tax benefits, and allow you to get reimbursed for medical expenses with tax-free withdrawals from your account.

Other Investment Accounts
These can include equity market investments, mutual funds, ETFs, index funds, bonds, money markets, or an employee stock purchase plan. Withdrawals are not tax-free and you’ll be responsible for capital gains taxes.

Property Sales
Selling of real estate investments or other assets.

Gifts
Free money lawfully obtained from relatives or friends.

Home Equity Line of Credit (HELOC)
A secured loan that lets homeowners borrow money out of their home’s equity.

Securities-Backed Line of Credit
A loan that uses investment securities (such as stocks, bonds, or mutual funds) as collateral.

Other Loans
From a friend, family member, bank, financial institution, or any other lawful source, secured by the investor’s personal assets. Unsecured loans can also be used to fund an EB-5 investment, as long as there is sufficient source of funds documentation.

It’s a good idea for each applicant to hire a financial planner to help them with funding questions.

Consider Investing Through a Regional Center

EB-5 applicants can choose between two options for investing: direct or via a USCIS-approved regional center.

The overwhelming majority of applicants select the regional center investment option. This is a passive investment that doesn’t require day-to-day management from the applicant. Regional center-sponsored projects have easier job creation requirements, too.

However, direct investors must be actively involved in running the EB-5 project. Only direct jobs created by the EB-5 business can be counted towards the job creation requirement in this pathway.

Most H-1B visa holders are already employed and don’t have much extra time to devote to managing a business. The regional center investment model frees them of these responsibilities.

Partner With EB5AN to Get Your EB-5 Visa

Whether you’re an H-1B worker or not, it makes sense to work with an experienced EB-5 firm to ensure a smooth Green Card application process. It’s also wise to consult with an immigration attorney.

EB5AN has helped more than 2,700 families from 70+ countries become lawful permanent residents of the United States. Our expert team has more than a decade of experience and offers clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate.

If you would like to know more about your EB-5 investment options, book a free call with our expert team today.