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EB-5 vs. E-2 Visa, A Potentially Better U.S. Investor Visa Strategy

20 Jun

Certain foreign nationals can come to the United States as a lawful permanent resident through the EB-5 investor immigrant program or come temporarily with an E-2 treaty investor/trade nonimmigrant visa.  Which approach is the best approach depends on many considerations, including timing, the foreign national’s intent, the amount of the investment, whether a treaty exists, and the foreign national’s country of birth.  Surprising for some, the better option may be to come to the United States as a nonimmigrant rather than an immigrant (lawful permanent resident).

In recent years, the EB-5 Immigrant Investor visa category has become significantly backlogged for individuals born in China, India, and Vietnam. There may be other options for individuals from these backlogged countries, such as permanent residence through a labor certification or an H-1B or L-1 nonimmigrant work visa.  For individuals born in countries other than China, India and Vietnam, there may be other options as well, such an E-2 visa.  The E-2 visa is not available at this time to those foreign nationals born in India, Vietnam or China, unless born in China (Taiwan).

The E-2 Treaty Investor visa and other U.S. nonimmigrant visa categories, such as H-1B and L-1, may actually prove more beneficial than an immigrant visa strategy such as EB-5. However, nationals of only certain countries qualify for the E-2 visa, so a successful E-2 strategy may first require securing citizenship by direct investment in a country with an E-2 Treaty, such as Grenada. Often this can be accomplished by similar types of direct investment one might make in the United States, and sometimes with less capital outlay for the combined citizenship application and U.S. E-2 strategy, compared to EB-5.

EB-5 versus E-2 

The EB-5 Immigrant Investor Program provides a path for permanent residency for persons who invest $1 million, or under certain circumstances $500,000, in a new commercial enterprise that will create ten (10) new jobs for U.S. citizens or lawful permanent residents full-time. 

The E-2 Treaty Investor visa is a nonimmigrant visa, which requires a “substantial” investment in the U.S. and provides for the principal investor, as well as executives, supervisors, and essential personnel who share the same nationality of the E-2 Treaty Country as the principal investor to work in the United States. The U.S. company must be at least 50% owned by a national of a country with which a qualifying Treaty of Friendship, Commerce, or Navigation or its equivalent exists with the United States. 

Relative to the EB-5 Immigrant Investor visa, the E-2 Nonimmigrant Treaty Investor visa category provides the following benefits, requirements, and considerations:

 

EB-5 Immigrant Investor VisaE-2 Nonimmigrant Treaty Investor Visa
Significant backlog for applicants born in China, India, Vietnam.No backlog or quota for this visa category.
Physical presence and residency required to maintain permanent residency in the United States, otherwise may be abandoned and lost.Investment, not physical presence, must be maintained in the United States. 
Investment must create or maintain ten (10) full-time U.S. positions.Investment must be “substantial” relative to the business and not “marginal”.
Lengthy processing times with U.S. Citizenship and Immigration Services (USCIS) followed by application at a U.S. consulate abroad.Application at U.S. consulate abroad, generally approved at the time of the appointment; or can apply to change status to E-2 if in the United States.

 

EB-5 Immigrant Visa Backlog? Consider Grenada Citizenship and the U.S. E-2 Visa

For those nationals of countries which do not have an E-2 Treaty with the United States, it’s important to develop a tailored U.S. immigration strategy and approach in consideration of the immigrant visa backlog and plans of the entrepreneur or investor, which may include securing second or third citizenship as a prerequisite to securing U.S. nonimmigrant or immigrant status.

A handful of Caribbean countries provide for direct citizenship by investment without significant physical presence or residency required as a prerequisite to citizenship, specifically Antigua & Barbuda, Dominica, Grenada, St. Kitts & Nevis, and St. Lucia.  These countries provide pathways for citizenship within 3-6 months following an investment in real estate or a contribution to a government fund generally varying from US $100,000 – $350,000.

Of these countries, only Grenada has an E-2 Investor Treaty with the United States, which creates an additional visa category for nationals of Grenada that may otherwise not be available.  As mentioned, the E-2 Treaty Investor visa is only available to nationals of a set list of countries with an E-2 treaty with the United States, which at this time does not include China, India, or Vietnam, all of which heavily utilize the EB-5 Immigrant Investor visa category creating a backlog in the EB-5 Visa issuance due to over-subscription and annual per-country quotas.  Foreign nationals of countries with an E-2 Investor Treaty, however, may start in E-2 nonimmigrant status, and then transition at a later date to the EB-5 immigrant visa if and when their intent changes from wanting to be in the United States temporarily to permanently.

It’s important to develop a tailored U.S. immigration strategy and approach keeping in mind the immigrant visa backlog and plans of the entrepreneur or investor.