Google, Microsoft, Meta, and Amazon are some of the big tech firms that have sharply slashed jobs in recent months, in an industry which has globally shed over 285,000 workers since last year, according to Layoffs.fyi.
A bulk of the tech players slashing their workforce are headquartered in the US, and Indian nationals are said to be the worst-affected. Industry insiders believe around 30-40 percent among those laid off are Indian techies, a PTI report said in January.
Most of the Indians who get laid off are in the US on an H1B visa. This leaves them scrambling for a new employer, who should be willing to sponsor their H1B programme, within a period of 60 days. A failure to do so would force them to leave the country and head back to India -- which appears to be a more likely scenario in an environment where the entire sector is shedding jobs.
EB-5, which comes at a heavy cost of capital, may end up providing practical solutions to Indians, both in the US and those in their home country, to fuel their immigration goals and find pathway for permanent residency, experts say.
How the EB-5 visa works?
Immigrants, along with their spouses and unmarried children aged below 21, are eligible for an EB-5 visa if they invest a particular amount in a business based in the US, that will generate jobs for at least 10 qualified American workers, as per the US Immigration Act, 1990.
Under the prevalent rules, the minimum investment amount is $1,050,000 (Rs 8.6 crore), but can be reduced to $800,000 (Rs 6.4 crore) if it is being pumped into a "targeted employment area (TEA)", which is usually a rural area where the unemployment rate is high.
The EB-5 visa holders become eligible for a conditional green card, which is usually issued in 2-3 years, say immigration experts. An application can be filed after two more years to convert the conditional green card into a permanent green card, which will eventually pave the way for permanent residency and citizenship.
Unlike the H1B programme, the EB-5 visa holders are not subjected to restrictions in terms of the area where they can study or work. They are also eligible to start up their businesses in any part of the country.
Beating the 60-day countdown
Applying for an EB-5 visa can allow Indian nationals, on H1-B visa, to beat the 60-day countdown that starts after they lose their jobs. This was enabled through EB-5 Reform and Integrity Act, passed in March last year, that allows concurrent filing for the change in visa status.
"The new EB5 statute permits EB5 investors to petition for adjustment of status (I-485) concurrently with their EB5 petitions, this stops the 60-day countdown allowing H1B professionals to remain in the United States till they receive their green card," said Abhinav Lohia, director for global business development at San Francisco-based investor service firm Golden Gate Global, while speaking to Moneycontrol.
Additionally, applicants can apply for employment authorisation along with their adjustment of status application that allows them to work in the US till they become a permanent resident, Lohia explained.
In the stressed environment of the US tech sector, Indians are "showing considerably more interest in EB-5 visas", added Peter Calabrese, chief executive officer of the Wall Street-based CanAm Investor Services.
"The change allowing Indian nationals working or studying in America to concurrently file for an adjustment to their visa status while still in America has been a true game changer...Our data show that Indians requested to convert the classification of their current visa to an EB-5 visa at double the rate in 2022 versus 2021," Calabrese said, in response to queries sent by Moneycontrol.
However, since EB-5 requires a minimum investment that amounts to nearly Rs 6.4 crore, the option is not for the masses, Lohia pointed out. But there are a "significant number of professionals who can afford this price tag because of the stock options they have received at companies like Tesla and Amazon", he added.
Jump in Indians applying for EB-5?
While the official data is not available on the number of Indians who applied for EB-5, investor service firms claim they have recorded an uptick in the enquiries, as well as the applications made through consultation with them, by Indian nationals over the past year.
"Based on a recent analysis of our data, we saw a dramatic uptick of 155 percent in EB-5 inquiries received across all countries in calendar year 2022 compared to the previous year. We have received more than three times more inquiries from Indian investors in 2022 compared to the previous year, and that trend is accelerating in 2023," Calabrese said.
A surge in the number of Indians looking for brighter prospects in the West is also reflected through the recent data released by the Indian government on citizenship renunciations. Over 2.25 lakh Indians renounced their citizenship in 2022, the highest since 2011, the Ministry of External Affairs (MEA) told the Parliament on February 9.
The breakup of data for 2022 is not available, but in 2021, nearly half or 78,284 Indians out of 1.63 lakh who renounced their citizenship had opted for the US, followed by 23,533 who took over the Australian citizenship, 21,597 made Canada their home nation, and 14,637 chose the UK.
This shows that the US, which continues to hold the world's highest per-capita income, is the top choice for Indians looking for overseas citizenship. With the prospect of naturalisation through years of employment turning stark, Indians are increasingly looking towards the investment-visa programme to settle permanently in the US, experts say.
Currently, urgent inquiries related to EB-5 visa are "predominantly" coming from Indians based in the US, but "more long-term inquiry are coming from India with a time horizon of 6 months to a year", Lohia said.
"There is a ripple effect of layoffs in India too," he added, claiming that a lot of parents, who have invested in their children's education in the US, are considering to liquidate their investment properties in India to mop up the financial resources needed for the EB-5 visa.
"They feel the money is better used to secure their children’s future in the United States versus transferring the property as inheritance in the future. As unfortunate as this may sound, but for many there is no other option if they want to live long term in the United States," he said.
What are the risk factors?
The investments made under the EB-5 programme are mandated to be "at-risk", according to the USCIS. However, the major risk factors are not linked to the return on investments, but whether the applicant's primary goal of permanently settling in the US could be hindered.
The rules mandate a high-level of scrutiny to ensure that the capital which an applicant is investing in the US is obtained from lawful measures. The conditional green card may be denied to applicants if the source of their investment is unclear.
Also, the applicant's conditional green card may get rejected if the investment made under the programme fails to create long-term jobs for at least 10 qualified US citizens.
The third risk factor pertains to the choice of "regional centre". As per the norms governing the EB-5 programme, an applicant can directly make an investment into a business, or invest their capital into a USCIS-designated regional center that pools a clutch EB-5 investments and uses them to create job-creating projects.
One has to be particularly careful while choosing the regional center, note experts. If the project where their investment is pumped into fails to create the requisite amount of jobs or meet the standards set up by the USCIS, it would lead to investment losses and denial of the green card.
"Investors should carefully research their potential partners and conduct thorough due diligence before investing with a regional center in any EB-5 project. This may include researching the reputation and track record of the regional center and the project developers, analysing the financial projections and risks associated with the investment, and seeking the advice of legal and financial professionals," Calabrese said.
Ultimately, the success of an EB-5 investment hinges on proper due diligence and adherence to the programme's requirements, the CanAm Investor Services CEO underlined.
