On Thursday, new rules governing the EB-5 visa of the United States came into effect, which include a significant increase in the investment amount required to obtain the visa.
The EB-5 is one of five employment-based immigrant visas that can be obtained in the United States (others being EB-1, EB-2, EB-3, EB-4). An immigrant visa allows its holder to live and work in the US permanently, as opposed to a non-immigrant visa like the H-1B.
The US Federal Register published the new rules for the EB-5 visa in July this year, and they have gone into effect on November 21.
What is the EB-5 visa?
Under the US immigration rules, the EB-5 is a category of visa which enables an individual to apply for permanent residentship in the United States (also called green card) after meeting certain investment and employment-generation criteria.
The applicant is required:
– to make the necessary investment in a commercial enterprise in the United States, and
– create or, in certain circumstances, preserve 10 full-time jobs for qualified United States workers.
Upon making the initial investment, the applicant receives a conditional green card for a two-year period. Then, after creating 10 jobs for US citizens, the applicant gets a permanent green card.
The US uses the visa scheme to generate employment in what are called ‘targeted employment areas’. The TEAs consist of areas that have an average unemployment rate of at least 150% of the national average unemployment rate of the US, as well as certain rural areas.
Why is the EB-5 visa preferred?
The EB-5 is considered to have more advantages than other categories, such as offering employment at more competitive wages which are freely negotiable, rather than dictated by the employer.
They also have a much shorter processing time as compared to the H1-B visa, for which applicants may have to wait for more than 10 years.
What has changed due to the new rules?
Under the previous rules, which were in effect since 1990, the standard minimum investment level was USD 1 million, and the minimum investment amount in a targeted employment area (TEA) was USD 500,000.
The new rules have increased the amounts, accounting for inflation. The standard investment level is now USD 1.8 million (approx INR 13 crore), and the minimum investment amount in a TEA USD 900,000 (INR 6.5 crore). Every five years, the amounts would automatically adjust for inflation.