Foreign investors can move to the U.S. through the EB-5 or E-2 investor programs.
While both E-2 and EB-5 visas require investment in the U.S. economy, they differ in procedures and scrutiny, especially when it comes to source of funds. It’s important to know about these differences when choosing the best pathway for your immigration and financial goals.
In this article, we’ll look at some differences between E-2 and EB-5 visas. We’ll also compare their source-of-funds requirements.
How Is the EB-5 Visa Different From the E-2 Visa?
E-2 Treaty Investor Program
EB-5 Immigrant Investor Program
E-2 vs. EB-5: Comparing Their Source of Funds Requirements
EB5AN Can Help With Your Source of Funds Documentation
How Is the EB-5 Visa Different From the E-2 Visa?
The E-2 and EB-5 visas are the two types of investor visas available to foreign entrepreneurs who want to relocate to the U.S. Both involve investing in the U.S. economy, but their similarities end there.
The eligibility criteria, processing procedures, and investment requirements for the E-2 and EB-5 visas can be very different. Below is an overview of the requirements for each.
E-2 Treaty Investor Program
The E-2 treaty investor visa is a nonimmigrant visa that grants temporary U.S. residency to qualifying foreign investors. It is available only to nationals of countries in a trade treaty with the U.S. The U.S. currently has trade treaties with over 70 countries.
There’s no specific minimum investment amount for an E-2 visa. However, applicants must invest a substantial amount in an existing U.S. business or a start-up, and the investment must be “at risk.” They must also be actively involved in operating the business.
An E-2 visa is usually valid for two years, and investors can renew it indefinitely. However, it does not lead to permanent residency (a Green Card) in the U.S. E-2 investors who want a more permanent option can consider switching to an EB-5 visa.
EB-5 Immigrant Investor Program
The EB-5 visa is an immigrant visa that grants U.S. permanent residency to foreign nationals in exchange for substantial investment in the U.S. economy. It was introduced in 1990 to boost the U.S. economy and create jobs for Americans. Successful applicants and dependent family members receive U.S. Green Cards.
To qualify for an EB-5 visa, an applicant must invest at least $800,000 in a targeted employment area (TEA) or $1,050,000 in other regions. The new commercial enterprise must also create at least ten jobs for U.S. workers. It is open to investors of any nationality.
Applicants must submit an I-526E petition to USCIS along with supporting documents with details of the investment projects, source of funds, and proof of job creation, among other requirements. Once approved, they are eligible to get two-year conditional Green Cards. At the end of this period, they file Form I-829 to remove conditions and become permanent residents.
EB-5 investors can apply for U.S. citizenship after five years of holding a Green Card.
E-2 vs. EB-5: Comparing Their Source of Funds Requirements
Both E-2 and EB-5 visas require investment funds to come from lawful sources, but the level of scrutiny differs. E-2 source-of-funds requirements are generally lighter than those for EB-5.
For EB-5 visas, investors must be able to provide documents showing the trail of movement of investment funds from the investor to a qualifying EB-5 project. This includes documentation tracing the legality of the funds down to their origin. The process is similar to a financial audit.
For example, if you’re making an EB-5 investment using funds from family gifts, you must provide evidence of how you received the gifted funds and prove that each family member legally obtained their funds, as well.
For an E-2 visa, immigration authorities want general proof that investment funds were legally obtained and invested in a U.S. business.
Pros and Cons
The E-2 option offers simpler source-of-funds processes and no minimum investment amount, but it is not available to nationals of all countries and does not provide a direct pathway to a Green Card. It is also not suitable for passive investments by foreign nationals who do not wish to handle the business’s day-to-day operations.
The EB-5 visa is more widely available and straightforward but involves more rigorous source-of-funds documentation. It typically requires a higher investment amount, so the source of funds is more closely examined. Since a successful EB-5 investment can lead to permanent residency and eventually citizenship, this scrutiny is necessary to help prevent fraud.
EB5AN Can Help With Your Source of Funds Documentation
Foreign investors must fully understand the details of both options before deciding which investment visa pathway better suits their goals and circumstances.
E-2 visa holders may be able to switch to EB-5 status if they meet all requirements, including proving a lawful source of funds. To prepare for this, E-2 applicants should keep a detailed record of their funds from the start.
With the help of an experienced immigration attorney, an E-2 investment can count toward the $800,000 minimum EB-5 investment requirement. If the business employs full-time U.S. workers, those jobs can also count toward the EB-5 job creation requirement.
When making such a transition or compiling your source-of-funds package, it’s best to consult with EB-5 experts. EB5AN has helped over 2,300 families from 60 countries successfully relocate to the U.S. as permanent residents.
To learn more about your investment options or get help with your source-of-funds process, please schedule a one-on-one call with our EB-5 team today.
