H1B Investing Guide: Definition, Benefits, and Risks (2024)

H1B Investing is a way for H1-B visa holders to make more money and increase their savings. Aside from an increase in income, H1B Investing also has 3 other benefits including helping you meet the EB-5 visa minimum capital requirements to transition from an H-1B Visa to an EB-5 Visa, good for retirement planning, and lost money from H1-B Investment can be tax deductible. However, just like any other type of investment, H1-B Investing also has its own share of risks. The risks of H1-B Investing include H1-B Investment earnings being tax liable, H-1B status having a time limit of six years, and the H1-B Visa being dependent on your employer.

Your savings from H1B work have the potential to increase at a better rate of return over time if you invest. H1B visa holders are permitted to trade stocks and make investments in the US stock market as long as they fulfill the necessary requirements. There are also other investment options for H-1B visa holders including buying a house, 401K investments, cryptocurrencies, Certificate of Deposits (CDs), fixed deposits, and FCNR Deposits as NRI.

What is H1-B Investing?

H1-B Investing allows an H1B Visa holder to increase their income through investment. You can make enough money working in the US on an H-1B Visa to pay your living expenses and save a large amount of it. Your savings from H1B work may grow over time at a higher rate of return if you invest. When switching from an H-1B Visa to an EB-5 Visa, H1-B Investing enables you to satisfy the minimum capital requirements.

How does H1-B Investing Work?

H1-B Investing works in 11 different ways with stock trading as the most popular type of investment. An H1-B Visa holder must have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), as well as a personal bank account in the U.S. to be qualified to do stock trading in the country. Other ways of H1-B investment include investing in a High Yield Savings Account (HYSA), a Certificate of Deposit (CD), a 401k plan, a Traditional Individual Retirement Account (IRA), a Roth IRA, a Health Savings Account (HSA), an Employee Stock Purchase Plan (ESPP), a Taxable Investment Account, a Real Estate Investment, and a Foreign Currency Non-Resident Account (FCNR).

What are the Benefits of H1-B Investing?

H1B Investment has four primary benefits for foreign nationals with H-1B Visas who are living in the United States.

• H1-B Investing increases your income.

H1-B investing can be quite profitable. As an H1-B Visa holder, you might want to consider investing in real estate since it is a popular type of investment. Typically, you end up selling the house for more money than you bought for it. This would be a great investment if the profit is significant.

• H1-B Investing helps you meet the EB-5 Visa minimum capital requirements.

Your savings from H1B work may grow over time at a higher rate of return if you invest. Thus, when switching from an H-1B Visa to an EB-5 Visa, H1-B Investing enables you to satisfy the minimum capital requirements.

• H1-B Investing is good for retirement planning.

As a H1B Visa holder, a 401k plan is among the simplest ways to invest and one of the most crucial retirement planning. When you retire, the majority of employers will match your 401k contributions, which can build up to a sizeable sum of money.

• Lost money from H1-B Investment can be tax deductible.

If you’ve lost money in trading stocks, it can be tax deductible, providing you with a rebate and other benefits.

What are the Risks of H1-B Investing?

These are the risks involved in H-1B Investing activities.

• H1-B Visa is dependent on your employer.

One of the drawbacks when you invest while on an H1B Visa is that you must work full-time for the business that sponsored your visa. Engaging in day trading regularly will violate the main status of your H-1B Visa.

• H1-B Investment earnings are tax liable.

You will have to pay taxes on your investment earnings, such as stock earnings, just like you would with ordinary work income. Any error could endanger your visa status; therefore, it’s critical to conduct careful research before submitting taxes on your stock trading profits. Since filing taxes on stocks may be complicated, many people opt to utilize tax consultants.

• H-1B status has a time limit of 6 years.

H1-B Visa is only valid for a maximum of 6 years. This time limit will be detrimental when you invested in real estate. After those 6 years, you would need to leave the country for a year in order to reapply for another H-1B Visa if you wanted to continue working in the US.

How to Start H1B Investing?

An H1-B visa holder must have a personal bank account in the U.S. and a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) to be qualified to do stock trading in the country. Once you have fulfilled these requirements, you can register a trading account with one of the US online stock brokers, decide how much money you want to invest, list the stocks you are interested in, and begin trading.

How to Invest in H1B Investing?

H1B Visa holders are permitted to trade stocks and make investments in the US stock market. Like any other retail investor, they are able to buy and sell stocks. There are no laws prohibiting H1B holders from trading stocks in the US. Holders with H1B Visas are able to open an account with an online stock broker, such as Robinhood, Ameritrade, etc., and begin buying and selling stocks. Delivery based trading is perfectly legal for H1B visa holders.

What is the Minimum Requirement for H1B Investing?

The requirements you will need to fulfill will depend on the type of investment. H1B holders who want to invest in stocks will have to meet the same requirements as US citizens with a few additions. The common requirements needed for H1B holders to be eligible for stock trading are listed below.

• Social Security Number (SSN)
• Copy of Passport
• Copy of H1B Visa Stamp in Passport if you arrived in the U.S. on H1-B
• I-94 Arrival/Departure Card Copy

What are the Other Investment Options for H1B Visa Holders?

The H1B Investment option makes it possible for an H1B visa holder to increase their earnings through investment. Your savings from H1B work have the potential to increase at a better rate of return over time if you invest. Here are 6 investment options for H-1B Visa holders.

1. Buying a House – H1B Visa holders should think about investing in real estate while on an H1B visa to achieve their long-term financial goals. No matter how their credit situation is in the US, H1B Visa holders can choose from a variety of mortgage options. As a result, reaching your objective of homeownership in the US can be accomplished considerably more quickly than by waiting two to three years.
2. 401K investments – A 401k plan is a retirement account offered by companies instead of a pension. The money in your 401k account can be invested in the equity market in the form of bonds, stocks, and REITs.
3. Crypto Currencies – A cryptocurrency is a digital asset that may be traded freely, independent of a bank or a government. An HB1 Visa holder is permitted to trade a variety of cryptocurrencies, including Bitcoin and Ripple. The earnings and losses you make when trading cryptocurrencies are regarded as capital gains and losses.
4. Certificate of Deposits (CDs) – A Certificate of Deposit (CD) is a type of savings product that pays interest on a single sum of money for a predetermined amount of time. The risk involved is low and so is the return on investment. CD interest rates are slightly above HYSA though still below inflation.
5. Fixed Deposits – Investment in fixed deposits provide guaranteed returns at fixed interest rates and a fixed income regularly.
6. FCNR Deposits as NRI – A Foreign Currency Non-Resident Account (FCNR) is a type of fixed deposit held in a foreign currency. With this, you are protected from forex rate risks. FCNR Deposit is a good investment choice for NRIs seeking high profits while keeping their money in foreign currencies.

What is the Best Broker for H1-B Investing?

An H1-B Visa holder must open an account with one of the online stock brokers in the US before they can buy and sell stock in any publicly-traded company. TD Ameritrade is the best broker for H1-B Investing because it offers investing and trading services, long-term investing, and retirement planning for 11 million client accounts totaling more than $1 trillion in assets, as well as custodial services for more than 6,000 independent registered investment advisors. For more than 40 years, TD Ameritrade has been one of the most prominent and innovative online brokers.

Can Personal Loans be Used for H-1B Investing?

Yes, you can use your Personal Loan for H1B Investing. One way in which you can invest using your H-1B Visa Personal Loan is through the EB-5 Visa Program. The EB5 Visa allows you and your family to permanently immigrate to the United States as Green Card holders. Loans are acceptable sources of investment for a US EB 5 Visa provided that they are obtained lawfully. Among the top lenders for the Best Personal Loans for H1B Visa Holders are Upgrade, SoFi, and Stilt.

Are there H1B Investment Brokers?

Below are 5 other popular brokers for H1-B Investing.

1. Trade King – TradeKing is a socially-enabled equity and options trading service that provides customers with low-cost trading as long as extras like daily financial market blogging and the capacity to communicate with other members that follow the same trading approach or trading market research.
2. Robinhood – Robinhood offers tools to help you plan for your financial future as well as commission-free investing. With a Robinhood brokerage account, investing is commission-free.
3. E*Trade – A major worldwide financial services company known for the caliber of its wealth management, investment advisory services, research, and market insights, Morgan Stanley now includes E*Trade as a component of its business. E*TRADE is the pioneer of online trading for retail clients. For digitally inclined investors and traders, E*Trade excels at providing a first-rate experience.
4. OptionsHouse – OptionsHouse is a cutting-edge, user-friendly brokerage that makes trading options simple for beginners. The software is largely geared toward options traders. However, there are many tools available for stock traders as well.
5. Interactive Brokers – The lowest commissions are offered by Interactive Brokers, which also provide access to stocks, currencies, futures, bonds, options, and funds from a single platform. Interactive Brokers will give you a portion or all of the savings if an exchange offers a rebate.

Can H1B Visa Holders Invest in Stocks?

Yes, an H1B Visa holder is allowed to invest in stocks as long as he has fulfilled the necessary requirements such as a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN), as well as a personal bank account in the US. Since it only publishes regulations pertaining to visa status, the USCIS has no authority over stock trading for H-1B Visa holders. Nevertheless, an H-1B Visa holder should refrain from regularly engaging in day trading, which is a violation of the main status of his visa. Instead, he should work full-time for the company that sponsored his visa and engage in stock trading only occasionally or on a part-time basis.

Is Stock a Good Investment for H1-B Visa holders?

Yes, one of the most popular types of investment for H1-B Visa holders is stock investing. Additionally, investment in stocks is fairly simple. Day trading and delivery based trading are the two primary stock trading types. The majority of H1-B Visa holders will engage in delivery-based trading because day trading frequently necessitates full-time employment. Since most H1B Visa holders work full-time jobs, day trading is out of the question for those who don’t want to renounce their visa status.

Can Investing Guarantee the Conversion of H1-B Visa holders to EB-5 Visas?

No, investing does not guarantee the conversion of H1-B visa to EB-5 Visa. Investing might be a good way to create passive income but only if you own assets that produce dividends or interest. Equities that don’t pay dividends or assets like cryptocurrency may be intriguing but they won’t provide passive income for you. Without guaranteed investment earnings, H1-B visa holders will have a hard time meeting the Requirements for EB 5 Visa for minimum capital investment. The EB-5 Visa is an immigrant program that grants permanent residency to foreign investors. The EB5 Immigrant Investment Program requires a minimum capital investment that leads to at least 10 full-time jobs for Americans.