What are the Differences Between the EB-5 and E-2 Visas?

The EB-5 and E-2 visas offer unique opportunities for foreign investors to establish a presence in the United States.
For investors seeking to obtain residency or citizenship in the United States through investment, the EB-5 Visa and the E-2 Visa are two of the most popular options. Both visa categories offer various advantages to foreign investors, but there are significant differences between them. In this article, we will explore the key differences between the EB-5 and E-2 visas from legal, financial, and practical perspectives.

The EB-5 and E-2 visas offer unique opportunities for foreign investors to establish a presence in the United States. However, the differences between these two visa categories are significant and should be carefully considered based on the investor’s needs and objectives. The EB-5 visa is more suitable for those seeking to make a substantial investment and obtain permanent residency, while the E-2 visa is more attractive to those who want to invest a smaller amount and maintain temporary residency. Ultimately, the choice between these two visas should be made after thoroughly evaluating all legal and financial factors relevant to the investor’s situation.

What is the EB-5 Visa?

The EB-5 Visa is an immigrant visa that provides a pathway to permanent residency (a green card) in the United States through investment. Established by the U.S. Congress in 1990, the EB-5 program aims to stimulate the U.S. economy by encouraging foreign investors to create jobs. The EB-5 visa grants permanent residency to the investor, their spouse, and their unmarried children under the age of 21.

Investment Requirements: To qualify for the EB-5 visa, investors must make a substantial financial investment in a U.S. business. This investment can be made directly into a commercial enterprise or through a designated regional center. The required investment amount is generally $1,050,000, but it can be reduced to $800,000 if the investment is made in a Targeted Employment Area (TEA), which is defined as an area with high unemployment.

Job Creation Requirements: Investors must demonstrate that their investment will create at least 10 full-time jobs for U.S. workers. This job creation requirement is intended to ensure that the investment contributes to the economic growth of the U.S.

Process: The EB-5 process is typically complex and time-consuming. After making the investment, investors must file Form I-526 with U.S. Citizenship and Immigration Services (USCIS) to prove that the funds were legally sourced and that the investment meets the job creation criteria. Once the application is approved, the investor and their family receive a conditional green card, which is valid for two years. At the end of the two years, the investor must file Form I-829 to remove the conditions on their green card. If the investment and job creation requirements have been met, they will be granted permanent residency.

What is the E-2 Visa?

The E-2 Visa is a non-immigrant visa available to citizens of countries that have a treaty of commerce and navigation with the United States. The E-2 visa allows investors to live and work in the U.S. by making a significant investment in a U.S. business. Unlike the EB-5 visa, the E-2 visa does not lead to permanent residency but provides temporary residency and work authorization.

Investment Requirements: The E-2 visa requires a substantial investment, though the required amount is more flexible than the EB-5 visa. The investment must be "substantial" and sufficient to ensure the successful operation of the business. Typically, the investment ranges from $100,000 to $200,000, but lower or higher amounts may also be acceptable depending on the nature of the business.

Job Creation Requirements: The E-2 visa does not have a specific job creation requirement. However, the investment must be sufficient to ensure the sustainability and growth of the business. This makes the E-2 visa an attractive option for investors looking to start or buy smaller businesses.

Process: E-2 visa applications are submitted to U.S. consulates, and once approved, investors can live and work in the U.S. for the duration of the visa. The E-2 visa is typically granted for a period of 2 to 5 years and can be renewed as long as the business continues to operate. However, since the E-2 visa is a non-immigrant visa, it does not lead to permanent residency, and the investor's stay in the U.S. is contingent upon the continuation of their business activities.

Key Differences Between the EB-5 and E-2 Visas

Legal Status: The EB-5 visa is an immigrant visa that provides a pathway to permanent residency (a green card) in the U.S. Investors, along with their families, can live and work in the U.S. permanently. The E-2 visa, on the other hand, is a non-immigrant visa that only grants temporary residency and work authorization. E-2 visa holders can live in the U.S. for a certain period but cannot obtain a green card through this visa.

Investment Amount: The required investment amount for the EB-5 visa is significantly higher than for the E-2 visa. EB-5 investors generally need to invest between $800,000 and $1,050,000, while E-2 visa investment amounts typically range from $100,000 to $200,000. This makes the E-2 visa more accessible to investors with a lower budget.

Job Creation Requirement: The EB-5 visa requires investors to create at least 10 full-time jobs for U.S. workers, while the E-2 visa has no such requirement. E-2 investors only need to prove that their business is viable and capable of generating income to support the investor and their family.

Visa Duration: The EB-5 visa grants permanent residency and is therefore indefinite. The E-2 visa, however, is a temporary visa that is usually issued for 2 to 5 years. The E-2 visa can be renewed indefinitely as long as the business continues to operate, but it does not offer a path to permanent residency.

Eligibility: The EB-5 visa is open to investors from any country, while the E-2 visa is only available to citizens of countries that have a treaty of commerce and navigation with the U.S. Countries like Turkey, for instance, are eligible for the E-2 visa due to their treaty status.

Which Visa is More Suitable?

Choosing between the EB-5 and E-2 visas depends on the investor’s individual goals, financial situation, and long-term plans in the U.S. If the investor’s primary goal is to obtain permanent residency and eventually citizenship, the EB-5 visa may be the better option. However, for investors who wish to start a business in the U.S. with a lower budget and are not necessarily seeking permanent residency, the E-2 visa offers a flexible and viable alternative.

Both visa types involve complex legal processes, and it is advisable for investors to seek professional guidance to navigate these procedures. In addition to legal requirements, investors should also consider how well they can adapt to the U.S. business environment and evaluate their long-term goals carefully.