The E-2 vs. EB-5 visa are two popular options that allow foreign nationals to invest in the U.S. and, for the latter, eventually obtain permanent residency or a green card.
This article will help you navigate the differences between these two visa programs so you can make an informed decision about which one is right for your U.S. investment.
Key Differences Between the E-2 vs. EB-5 visa
Choosing the right visa for your U.S. investment is a critical decision that depends on various factors, from your investment budget to your long-term goals. While both are investor visas, E-2 vs. EB-5 visa are two distinct paths to achieving your investment and immigration objectives in the United States.
Here are their key differences:
1. Path to Citizenship (Immigrant Vs. Non-Immigrant Visa)
The most glaring difference between the two visas is that the EB-5 visa is an immigrant investor visa, which will, therefore, lead to obtaining a green card. The EB-5 visa is the recommended path if you seek permanent residency in the United States via investment.
On the other hand, the E-2 visa is a non-immigrant investor visa. It suits entrepreneurs looking to enter the U.S. market and establish a bona fide U.S. business. It will not lead to obtaining a green card. However, you can extend your E-2 visa indefinitely if the business is profitable and growing and you continue to meet the program’s requirements.
2. Eligibility – Nationality Requirement
The nationality and treaty country requirements differ significantly between the E-2 vs. EB-5 visa programs.
The EB-5 visa is open to investors from any country, regardless of nationality. Since there are no specific nationality requirements, it is an attractive option for investors worldwide.
On the other hand, the E-2 visa is available only to nationals of countries with which the United States has a Treaty of Commerce and Navigation or a Bilateral Investment Treaty (BIT). If your country does not have such a treaty with the U.S., you are not eligible for the E-2 visa. To see if your country qualifies for the E-2 visa, you can check the U.S. Department of State’s official list of treaty countries.
3. Investment Amount
The investment amount is an apparent difference between the E-2 vs. EB-5 visa.
To qualify for an EB-5 visa, you must invest in a new commercial enterprise or a regional center project. You will need to invest $800,000 if your investment is in a targeted employment area (TEA), which is typically a rural area or one with a high unemployment rate. However, if you invest in a non-TEA, the minimum investment rises to $1.05 million.
If you have a limited budget, the E-2 visa may be a more accessible option. An E-2 visa typically requires a lower investment, which varies depending on the specific business you plan to invest in. The investment amount can range from $50,000 to several million dollars, depending on the nature of the business. While the USCIS does not specify a minimum investment amount, it does require that you invest a substantial amount, which is measured using a proportionality test.
The proportionality test weighs the amount of qualifying funds invested against the cost of the business. For instance, if your business’s total cost is $90,000 and you have invested $90,000, then you have invested 100%, which would be considered substantial. If your business has a total cost of $1 million and you have invested $500,000, though you have only invested 50%, it may still be considered substantial based on the investment amount. As a general rule, the lower the cost of establishing your business, the higher the proportionality must be to be considered substantial. This ensures your financial commitment to the successful operation of your business.
4. Job Creation
To qualify for an EB-5 visa, you must create at least 10 full-time jobs for qualifying U.S. workers within two years of your investment. This requirement is designed to stimulate the U.S. economy and is a key program component. You will only obtain permanent residency if you fulfill this requirement.
The E-2 visa, on the other hand, does not have a specific job creation requirement, but you are expected to create jobs consistent with the nature and scale of your business. Your goal should be establishing and growing a successful enterprise that contributes to the U.S. economy, and as you grow, you employ U.S. workers. While the job creation expectations for the E-2 visa are more flexible than those for the EB-5, it’s essential to demonstrate that your business is contributing positively to the local job market.
5. Involvement in Business Operations
An EB-5 visa investment can be completely passive, especially if you are investing in a regional center project, which pools investments from multiple EB-5 investors. You do not necessarily need to actively participate in the business’s daily operations as an EB-5 investor.
On the other hand, an E-2 investment requires some involvement in the business’s management. In fact, you must own at least 50% of the business or have operational control through a managerial or executive position or some other corporate device.
6. Work Opportunities
EB-5 investors have the freedom to pursue any work opportunity in the U.S. since, as previously mentioned, they don’t even need to be actively involved in their investment’s daily operations.
On the other hand, E-2 investors are restricted to work only for the business they have established in the U.S.
Ready to Invest in the U.S.?
Whether you invest in the U.S. via the E-2 vs. EB-5 visa, our network of experienced immigration attorneys and business plan writers at Immigration Business Plan is here to guide you through the entire visa application process. We provide expert advice, personalized assistance, tailored business plans, and continuous support.
Contact us today to schedule a FREE initial consultation and get started on your journey to a successful investment in the United States!