Potential effect visible? LGT Wealth's Chakri Lokapriya explains Trump's $100,000 one-time H-1B visa charge

The new U.S. executive order introduces a USD 100k one-time fee on new H-1B visa applications (practical for FY27). Given IT companies' limited dependence on new H-1Bs (1/3rd of the total H-1B workforce, and only 1–4% of the global staff), the financial impact is expected to be non-material—around 2-6% EPS impact in the worst case. Near-term, companies may face delays in RFP closures as clients negotiate on cost-sharing.

Changes in H-1B Fee Structure

1. There is a new one-time fee of USD 100,000 on H-1B applications.
2. This applies only to cap-subject petitions under the annual quota 85,000 (65k regular + 20k advanced degree).
3. Exemptions: renewals, extensions, amendments, and petitions filed by cap-exempt employers (e.g., universities, nonprofit research).
4. The existing fee structure continues for renewals and exempt petitions.

IT Companies' Dependence on H-1B Visas Has Come Down

1. U.S. presence: 8% - 15% of the global workforce.
2. Of U.S. staff: 65% - 75% locals, 28%-30% visa holders (H-1B/L1).
3. Globally, 2-4% of employees are on H-1Bs.
4. New H-1B applicants: less than 30% of the total H-1B workforce.

Timing of Impact

1. FY26: No impact (lottery already filed).
2. FY27 onwards: Potential effect visible.

Impact Scenarios

Case 1 – Companies pay the USD 100k fee

1. Cost spread over 3–6 years → USD $15,000-$30,000 per year per employee.
2. If one-third of H-1Bs are new applicants:
   1. EBIT margin impact: 15-30 bps.
   2. EPS impact: 2% to 6%.

Case 2 – Local hires replace new H-1Bs

1. Local hires cost 20-30% more
2. If 25% of H-1Bs are replaced annually:
   1. EPS impact: 1-4%

The author, Chakri Lokapriya, is the Chief Investment Officer (CIO), Equities of LGT Wealth India.

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