By Ann M Simmons
Fresh out of Loyola Marymount University in Los Angeles with a degree in applied information management systems, Ishaan Khanna landed an internship at Ticketmaster.com.
But after the US government rejected his application for an H-1B visa — available to highly skilled workers in fields with a shortage of qualified Americans — he was forced to return home to India.
Determined to live and work in the US, Khanna pursued another option.
With the help of his father, he invested $500,000 in a Four Seasons Resort development project in Puerto Rico. That was the minimum investment needed for a visa known as the EB-5.
Khanna was scheduled to arrive in the US this month, with dreams of working in the tech industry and eventually launching a startup in Silicon Valley.
At a time when obtaining legal residency in the US is getting harder, the investor visa may be the surest way — at least for the rich.
Here are some basics about the visa programme:
How did it start and what are the requirements?
The EB-5 programme was created in 1990 to stimulate the US economy through capital investment and job creation.
Foreigners can qualify for permanent US residency — a green card — if they invest at least $1 million in a new business that creates at least 10 jobs. The threshold drops to $500,000 for investments in high-unemployment or rural areas.
To apply for the visa, potential investors must file a petition known as an I-526 to US Citizenship and Immigration Services. If the petition is approved, the investor applies to the State Department for the visa — which allows permanent residence, conditionally. Once an investment project meets the requirements, the investor gets a green card. Immigration attorneys say the process can take up to two years.
The government caps the number of green cards awarded under the programme at 10,000 each fiscal year. No more than 7 percent of that total may come from any one country.
The investor’s spouse and unmarried children under 21 years of age are also eligible for residency under the programme.
How popular is the programme and who uses it?
In the past fiscal year, immigration authorities received 12,165 I-526 petitions — down 14 percent from 2016, according to the US government.
Of those petitions, 11,321 were approved.
The visa is available to people of all nationalities, except those from the six countries under the travel ban instituted by the Trump administration: Chad, Iran, Libya, Somalia, Syria and Yemen.
More than 82 percent of applications in 2016 — the most recent year available with a breakdown by country — came from mainland China, according to data from immigration authorities. The 7 percent cap on any one nationality has led to a huge backlog of Chinese applicants.
The next biggest applicant pools came from Vietnam, at 3 percent of the total, and India, at 2.7 percent. Those were up considerably from the previous year.
India, in particular, represented a disproportionate share of H-1B visas, which have become harder to renew because the US government has begun a more vigorous vetting process for computer programmers.
“We’re seeing a lot more Indian applicants because there are a lot of Indians here on H-1Bs who are looking at a 10-year wait to get a green card through employee sponsorship,” said Robert Blanco, an attorney at the Los Angeles law firm Wolfsdorf Rosenthal that helped Khanna secure his visa. “EB-5 is a faster way compared to that.”
Lawyers at STEP America, which specialises in helping investors with immigration issues and is based in the United Arab Emirates city of Dubai, said there has been a 60 percent increase in interest in the US investor visa programme among people living in Arab nations, including many Indian nationals.
“Generally, there is an understanding that the doors to (US) immigration are closing,” said Shai Zamanian, a partner in the firm. “Approval rates (for EB-5 visas) are quite high. People aren’t going to wait until next year, or perhaps a second term (for President Donald Trump] to see whether their chances are further limited.”
He said instability in the region is also driving expatriates there to “look for a safe haven” — even if it cost $500,000.
Jit Gupte, a 50-year-old Singapore national who has lived in Dubai for almost 12 years, said he has seen relatives suffer through the “tortuous wait” that comes with applying for other types of US visas.
He decided to skip that and invest in SkyRiseMiami, a high-rise leisure, entertainment and tourism centre in downtown Miami. He and his family plan to move to San Diego in June on an investment visa.
“We’re not going to be seen as someone who is going to take away so-called American jobs,” he said. “We’re actually going to create jobs out of investment.”
What’s the economic impact of the programme?
Researchers at Western Washington University found the visa programme generated more than $11.2 billion in capital investment in 2014 and 2015 for development projects across the country.
It also created more than 207,000 US jobs — or 4 percent of the private sector job growth between 2014 and 2015 — and added more than $33 billion to the gross domestic product and $4 billion in tax revenues.
What’s the government’s view of the programme?
Not everyone loves it.
Over the years, the programme has been accused of duping foreign investors and misspending cash that was supposed to go to job-creating projects.
For example, a December 2016 lawsuit filed by the Securities and Exchange Commission alleged that a Newport Beach lawyer misspent at least $9.5 million from 131 investors who wanted to participate in the programme.
In June 2016, the SEC sued an Orange County, California, couple, saying they misappropriated millions of dollars that was supposed to be used to build a cancer treatment centre. In 2015, the SEC sued a Redlands, California, doctor, saying he and an associate misspent half the $20 million they raised from Chinese investors hoping for US residency.
Some lawmakers have proposed adding protections and oversight to make the programme more secure for investors.
Others have questioned whether some of the projects being funded by EB-5 investors would have happened anyway, with domestic investment.
Lawmakers have also proposed increasing the investment requirement to $1.25 million, or $925,000 in economically distressed or rural areas. — Los Angeles Times/TNS
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