E-2 Visa VS EB-5 Visa: Everything Investors Need to Know

What is an E-2 Visa?

Foreign nationals seeking U.S. residency have a variety of visa options to consider. In this article, we will cover the E 2 visa, an investment-based visa that allows holders to live and obtain employment authorization in the U.S. Although the E2 visa offers many benefits, only foreign nationals from certain countries can apply.

Who is Eligible for an E2 Visa?

The most important criterion that determines who is eligible for an E2 visa is whether the applicant possesses citizenship in an E-2 treaty country. U.S. citizenship in a treaty country gained through any legal means counts.

The United States maintains E-2 treaties with over 70 countries.

What are the E2 Visa Requirements?

Applicants must invest in a US business and intend to leave the U.S. when their visas expire. (The E2 visa can be renewed. Although E-2 treaty investors must maintain an intent to leave the country, they can live in the U.S. for much longer than the initial two-year period.)

While many other investment-based visas have an officially set minimum investment threshold, that is not the case for the E2 Green Card: E-2 treaty investors are simply required to make a substantial investment in the business.

According to United States Citizenship and Immigration Services (USCIS), a substantial amount of capital is enough to cover the cost of purchasing an existing business or establishing a new one; enough to ensure the investor’s financial commitment to the enterprise; and enough to support the claim that the applicant will successfully develop and direct the business.

The enterprise must be an active, for-profit business engaged in some sort of entrepreneurial activity.

Moreover, the underlying objective of the E2 visa is to create jobs for U.S. workers. To meet this objective, the enterprise must have the present or future capacity to generate more than enough income to support the treaty investor and their household and have a significant impact on the U.S. economy.

The total investment capital for an E2 Green Card will vary depending on the business and its industry sector. Despite there being no official minimum amount, industry professionals widely recommend going no lower than $100,000—anything less will be unlikely to result in a visa, as it would not be considered a large enough investment.

The higher the substantial investment amount, the easier it will be for an applicant to prove their financial commitment.

All investment capital must fulfill the “at-risk” E2 visa requirement and be irrevocably committed to the enterprise. There can be no guarantee all or any of the invested capital will be returned to the treaty investor.

To be considered irrevocably committed, investment capital must already be invested or be in the process of being invested at the time of filing for an E2 visa.

In most cases, an E-2 treaty investor must possess at least 50% ownership interest in the enterprise, as well as a title that indicates ownership, operational control, or executive-level employment.

What are the Benefits of the E-2 Visa?

The E2 visa is initially issued for a two-year period. Extensions to this period can be granted indefinitely in two-year increments. Although there is no limit to the number of extensions an E-2 treaty investor visa holder can receive, extensions are only possible as long as the investment enterprise remains operational and fulfills the E2 program’s requirements.

Holders of the E2 visa can travel freely in and out of the U.S. with no restrictions. There is also no limit on how long an E-2 treaty investor can spend traveling. The only concern is keeping an eye on the visa status and expiration date; issues can arise if an E2 investor’s visa expires while they are abroad.

Additionally, E-2 treaty investor visa holders are limited to employment at the business in which they invested.

The E2 visa offers one of the quickest routes to U.S. residency for foreign nationals. The processing time for an E2 visa application typically takes 2-4 months, but wait times vary.

Are Family Members Eligible for the E2 Visa?

In addition to the applicant, an investor’s dependent family members (their spouse and unmarried children under the age of 21) are also eligible for the E2 visa.

If approved for E2 classification as dependents, these family members will be granted the same period of stay as the treaty investor. Additionally, a dependent’s nationality does not need to be the same as the main applicant.

Spouses can obtain an employment authorization document, and children can study within the U.S. as long as they meet the age requirement.

Although children are eligible as dependents with the E2 visa, they can age out of this classification. Once the children of an E-2 treaty investor turn 21, they can no longer be counted as dependents on their parent’s visa.

What Kind of Business Should E-2 Applicants Invest in?

An E-2 treaty investor can choose between a wide variety of businesses. The type of business is entirely up to the applicant’s interest as long as the enterprise meets all E2 visa criteria and applicable legal requirements. Some popular options include multinational corporations, franchises, restaurants, and consulting businesses.

What to Include in the E2 Visa Application

To successfully apply for an E-2 treaty investor visa, it is crucial for treaty investors to meet the eligibility requirements and carefully follow the visa application process.

Treaty investors must compile their E 2 visa documentation package, which includes Form DS-160, Online Nonimmigrant Visa Application, and Form DS-156E, Nonimmigrant Treaty Trader/Investor Visa Application.

The documentation necessary for the E 2 visa application process includes a valid passport, a business premises lease or sales contract, state registration or a sales license, and a federal employer ID. Bank records, purchase contracts, asset valuations, payment details, and similar documents can serve as evidence that the business was established.

Additionally, investors need to include documents that detail the source of investment funds, such as loan agreements and asset sale receipts.

Finally, an application for the E 2 visa must include a formal business plan, which will be covered below.

If applicable, E2 investors will also need to provide information on business operations. This includes but is not limited to client contracts, stock certificates, evidence of funds held in escrow, partnership agreements, client invoices, and bank records.

What to Cover in an E-2 Investment Business Plan

An application for an E2 visa must also include a formal business plan that details projections and how the investment will be utilized for successful enterprise operation. The main areas to cover include financial strategy, operational strategy, personnel strategy, marketing strategy, and the applicant’s skills and experience.

The business plan should include a five-year profit and loss forecast to show that the investment will meet any growth projections as well as create new jobs for the duration of the visa.

It is important for this plan to be realistic and feasible; if the treaty investor wishes to renew their E2 visa, they must provide evidence that they have achieved the business goals outlined in the business plan.

With no official minimum investment amount, the capital amount must be considered substantial in relation to the total cost of the business. It is the investor’s responsibility to make a case and explain why their investment is a substantial amount relative to the enterprise and its specific needs.

Evidence a treaty investor can use to support their case includes business bank account records, proof of income, business loans, and business purchases that show assets at risk in the investment.

With a wide variety of business structures allowed under the E2 visa, investors must decide on an operational strategy. Because the E2 applicants will be directing and developing a new or existing business, a detailed management structure is required.

The personnel strategy will need to prove the investor’s ability to create jobs for U.S. workers, including how many workers will be hired and what roles they will fill.

A marketing strategy must also be included in the business plan to detail how the treaty investor funding will impact the U.S. economy.

Providing evidence of U.S. contacts or signed letters of intent can help strengthen this portion of an investor’s visa application.

E-2 applicants must also prove that their skills and experience are related to the investment enterprise. Foreign nationals with extraordinary ability may consider the O-1 visa as an alternative.

The Importance of Seeking Professional Consultation

Although qualifying for an E2 visa can be achieved with a much lower investment amount than other investment-based visas, applicants run the risk of wasting time and money with an incomplete, inaccurate, or otherwise unacceptable E2 visa application.

Therefore, working with an immigration attorney can help ensure that an investor’s application complies with the E2 visa requirements. Furthermore, immigration attorneys are able to recommend other industry professionals to the treaty investor as needed.

An immigration attorney with an extensive track record of success and experience with the E2 visa program is the best option.

What is the Difference Between an E2 Visa and an EB-5 Visa?

Similar to the E2 visa, the EB-5 visa is investment-based and allows holders to live in the U.S. in exchange for making a qualifying investment in a commercial enterprise. However, there are several key differences between the two visa options.

Unlike the E2 visa, the EB-5 category does have officially set minimum investment amounts. If an applicant chooses to invest in a project within a targeted employment area (TEA), they must provide at least $800,000. Those who invest outside of a TEA are instead subject to a $1,050,000 investment minimum.

Through the EB-5 immigrant visa, investors first obtain conditional permanent residence in the U.S., which allows them to live and enjoy employment authorization anywhere in the country for two years. They can subsequently obtain a permanent Green Card. Although the E 2 visa allows holders to live in the U.S. as well, they are only authorized to work at the investment enterprise.

Perhaps the most important difference between the two visa options that foreign nationals need to know is that the E2 is a non immigrant visa category, meaning that it cannot lead to permanent resident status for the treaty investor.

While it can be renewed continuously, E-2 treaty investor visa holders must continue to comply with the program’s requirements. In contrast, after two years of conditional residency under the EB-5 visa, investors can obtain a permanent immigrant visa, which allows the holder to live and work anywhere in the U.S. regardless of the investment location. After five years of residency through the EB-5 Green Card, holders can apply for U.S. citizenship.

The Purpose of the E 2 Visa

The E 2 visa is a viable option for those who wish to live and work in the U.S., as it offers one of the quickest and cheapest routes to U.S. residency. However, only foreign nationals from countries with an E2 treaty with the U.S. are eligible.

Moreover, an E 2 visa can also be used as a stepping stone to the EB-5 visa, which grants holders many more freedoms and the potential to relocate to the United States permanently.

As a national leader in the EB-5 investment field, EB5AN has helped hundreds of investors get started on the EB-5 process. Foreign nationals interested in immigrating to the United States can take the next step by booking a call with EB5AN to learn more.