Investors from around the world wish to move to the United States in search of better career prospects and a superior quality of life overall. As a leading economy, the country offers them a dynamic business environment, excellent infrastructure, and political stability to succeed and build a prosperous future for themselves and their families.
There are primarily two options for foreign nationals seeking an investment-based visa in the United States—the E-2 and EB-5 investor visas. Although both visas allow investors to live and work in the country in exchange for investing in a U.S. business, there are marked differences between the two pathways. Depending on their eligibility criteria and immigration goals, investors can choose the more suitable route for their needs and circumstances.
In this article, we will explain the merits of different investment visa options and discuss the better alternative for foreign investors seeking a Green Card in a short time.
E-2 Visa
EB-5 Visa
Types of EB-5 Investments
Advantages of TEA Investments
Invest in Your Green Card With EB5AN
E-2 Visa
The E-2 Treaty Investor Visa is a non-immigrant visa that offers temporary residency to nationals of treaty countries if they invest substantial capital in a U.S. business. Nationals of countries that do not have a treaty of commerce and navigation with the United States do not qualify for the E-2 visa.
There is no statutory requirement regarding the minimum investment amount, but it must be sufficient to prove the treaty investor’s financial commitment to the enterprise and should contribute to the economy.
E-2 investors must establish that they are seeking to enter the United States solely to develop and direct the enterprise by showing at least 50% ownership or operational control in the business venture, preferably through a managerial position.
While investors can receive an E-2 visa fairly quickly and relocate within a few months, their residency status has many limitations. The biggest disadvantage of the E-2 visa is that it is a “single intent” non-immigrant visa. It means that investors must maintain an intent to leave the United States if their status expires or is revoked.
The visa gives them a temporary resident status that must be renewed every two years, which is again subject to certain conditions. E-2 investors must maintain their business to continue their visa status and, therefore, are perpetually exposed to immigration and financial risks.
Moreover, E-2 visa holders can only work in the business for which the visa was granted. They do not have the freedom to explore other career opportunities.
The E-2 visa holder’s dependent family members are allowed the same period of stay as the primary investor but with limited employment and education benefits. Once the children of an E-2 visa holder turn 21, they lose the dependent visa eligibility and must apply for another visa to continue their stay in the United States.
Most importantly, the E-2 visa doesn’t directly lead to permanent resident status or pave the way for U.S. citizenship, preventing investors from enjoying the privileges available to Green Card holders and U.S. citizens.
EB-5 Visa
In contrast to the temporary E-2 visa, the EB-5 visa provides a straightforward immigration route for investors and their families, allowing them to live, work, study, or retire anywhere in the United States without any restrictions.
Since its inception in 1990, the EB-5 Immigrant Investor Program has been a popular pathway for investors seeking permanent residency in the United States. It enables foreign nationals and their eligible family members (the spouse and unmarried children under 21) to obtain Green Cards through investment in a U.S. commercial enterprise.
The minimum investment capital required to participate in the EB-5 program is $800,000 if the project is located in a designated targeted employment area (TEA) and $1,050,000 for non-TEA EB-5 projects. Another key requirement to qualify for the program is that the EB-5 investment must create at least ten permanent full-time jobs for qualified U.S. workers.
The program is administered by the United States Citizenship and Immigration Services (USCIS). Unlike the E-2 visa, the EB-5 program is accessible to nationals of all countries.
Benefits of EB-5 Visa
The EB-5 visa has multiple advantages for EB-5 investors and their dependents that are almost at par with the privileges enjoyed by U.S. citizens.
As Green Card holders, they do not need a work permit or employer sponsorship to pursue employment. They have complete freedom to switch jobs, run a business, or freelance in any field of their choice.
The EB-5 visa gives them access to significant benefits of the U.S. educational system, such as lower tuition rates, scholarships, and better chances of admission to prestigious academic institutions. They are also free to take up a job both on and off campus while they are still studying and have unlimited career opportunities after graduation.
The visa entitles them to healthcare benefits, retirement support, and other social welfare programs available only to permanent residents. It also gives them more freedom when traveling outside the country.
To top it all, EB-5 visa holders can apply for U.S. citizenship as soon as they complete five years of permanent residency.
With some investment options in the EB-5 program leading to Green Cards in less than a year, it is indeed one of the fastest ways a foreign investor can become a permanent U.S. resident and, subsequently, a U.S. citizen.
Types of EB-5 Investments
The EB-5 program offers two investment paths: direct investment in a standalone business and indirect investment through a regional center. While each path has distinct implications for investors, the minimum investment criteria are the same for each type of investment, depending on the TEA or non-TEA location of the project.
Direct Investments
In a direct or standalone EB-5 investment, applicants must invest the minimum required capital directly in a new or existing commercial enterprise and create at least ten full-time jobs for employees authorized to work in the United States.
Before the EB-5 Reform and Integrity Act of 2022 (RIA) was implemented, the program allowed for pooled direct investments with other foreign nationals. However, under the new rules, only one investor is permitted to file a direct EB-5 petition (Form I-526) for a standalone investment.
Direct EB-5 investors have an active and independent role in managing the enterprise. Securing funds from legal sources, submitting a viable business plan to USCIS, generating the necessary jobs, overseeing the daily operations of the company, and ensuring compliance with EB-5 eligibility criteria—every aspect is the investor’s responsibility.
Managing a direct EB-5 investment while satisfying all EB-5 qualification criteria can be challenging for EB-5 investors. The job creation requirement, in particular, can pose a serious immigration risk if not met as per regulations. This is the reason why a majority of investors prefer regional center investments that offer many other advantages, as we will see next.
Regional Center Investments
The EB-5 Regional Center Program was launched in 1992 to encourage investments in commercial enterprises associated with regional centers approved by USCIS.
Regional centers are public or private economic units that promote economic growth and improve regional productivity through foreign investment and job creation. They act as service agents for investors and project developers by managing EB-5 funds.
Investing indirectly through USCIS-approved regional centers is by far the most preferred option for EB-5 investors—and not without reason. Regional center investments can make the EB-5 process a lot simpler and more convenient for investors, saving them from years of stress and operational challenges. Especially after the RIA introduced stricter integrity measures, the program has become more secure and transparent, boosting investors’ trust in regional centers.
In regional center investments, EB-5 funds from multiple investors are pooled together and invested in large-scale projects. Many regional centers have a proven track record in a diverse range of successful EB-5 projects, giving investors a wider choice of projects to invest in.
Most of the complicated paperwork and EB-5 compliance conditions are taken care of by the regional center on the investors’ behalf, who have minimal involvement in the management of the project.
Perhaps the most significant advantage of a regional center investment is the ease of compliance with job creation criteria. Unlike direct investments that can count only direct jobs, a regional center project can also count indirect and induced jobs resulting from its overall economic impact. Regional centers prepare an impact report for USCIS to demonstrate the estimated number of jobs generated by the project, meeting every investor’s job creation requirement.
Most reputed regional centers have strong relationships within the EB-5 industry, which gives investors access to in-depth professional guidance throughout the immigration process. Thus, by investing in a low-risk EB-5 project managed by an experienced regional center, investors can enhance their chances of immigration and financial success to a large extent.
Besides, most regional center projects qualify for a TEA designation, which has additional benefits for investors.
Advantages of TEA Investments
TEAs are rural and high-unemployment areas recognized by the U.S. government as regions in need of economic growth.
Not only are TEA investments more cost-effective with a lower threshold capital requirement of $800,000, but they also speed up the EB-5 process for investors.
Investing in a TEA project entitles investors to qualify for a 32% set-aside visa quota. Out of the total annual EB-5 visa allocation, 20% of visas are reserved for investments in rural TEA projects, 10% for high-unemployment projects, and 2% for specific infrastructure projects.
The reserved quota was introduced in 2022 under the RIA and does not have any waiting list yet. With visa availability not an issue, investors opting for TEA investments can receive their Green Cards as soon as their I-526E petition is approved.
This is an excellent opportunity for investors from high-demand countries such as India and China to skip the backlog and years of waiting for their immigrant visas.
Then again, as more investors apply for the set-aside visas, the reserved category may also develop a waiting list. Recent data estimates indicate that the high-unemployment TEA category is already oversubscribed, and investors may have to wait for a few years to get their Green Cards.
However, with a larger percentage allocation, the rural category is less likely to get backlogged any time soon.
Rural investments also have the added advantage of priority processing as mandated by the RIA, ensuring faster adjudication for rural investors. This can be validated by the fact that some of the fastest EB-5 petition approvals post-RIA have been for rural TEA petitions.
Hence, a rural TEA investment is undoubtedly the better alternative for investors looking for long-term U.S. residency without having to wait for years to start their new life in the United States.
Invest in Your Green Card With EB5AN
Considering the complexities of immigration, most foreign investors consider EB-5 regional center investments the safest route to U.S. permanent residency. From initiating the application process to the Green Card approval, a reliable regional center can provide investors invaluable guidance and support throughout their immigration journey.
As a leading regional center operator, EB5AN has helped more than 2,300 families from 60 countries relocate to the United States as lawful permanent residents. Our expert team has more than a decade of experience and offers clients first-rate, low-risk EB-5 regional center projects with a 100% USCIS project approval rate.
To hear about the real-life success stories of regional center investors, check out our testimonials.
If you’d like to know more about EB-5 investments, book a free call with our expert team today.
