Why E-2 Visa Recipients are Ideal Prospects for EB-5 Visas
On November 21, 2019, the minimum financial investment for an EB-5 Visa will rise from $500,000 to $900,000. While that is a substantial increase, the EB-5 Visa is still one of the best ways for foreign nationals to obtain permanent Green Cards via an investment in a suitable U.S. enterprise. Now is also the time for many E-2 Visa applicants to consider whether an EB-5 Visa is a more practical choice for their needs.
EB-5 vs. E-2 Visas
Frankly, if the investor has the investment funds required, an EB-5 Visa investment is much simpler and straightforward than an E-2 Visa investment. Once the EB-5 investor has put his or her capital into a Regional Center approved by the U.S. Citizenship and Immigration Services (USCIS), they will receive their permanent Green Cards as long as the Regional Center creates 10 permanent, full-time jobs within two years in the United States. During this two-year period, the EB-5 investor and their spouse and unmarried children under 21 may live, work and go to school anywhere in the country – the location of the Regional Center plays no role in these decisions.
With an E-2 Visa, the situation is far more complicated. The investor must contribute a substantial investment into a U.S. company, and this enterprise must have majority ownership by nationals of the treaty country. If the majority ownership changes to U.S. nationals, the E-2 Visa is voided. For example, if a majority German-owned company accepts U.S. venture capital, that could then increase U.S. ownership above the 50 percent threshold. Should that occur, a German national’s E-2 Visa is no longer valid. The only alternative should such an event happen is applying for another type of U.S. employment Visa.
Unlike the EB-5 Visa, the “substantial” investment for the EB-2 visa does not include a set dollar amount, but it must provide the necessary amount of capital for the business. The amount may vary by the American consulate’s decisions in a particular country, with some applicants paying as little as $100,000 in one country and similar applicants paying more than twice than in other nations.
The E-2 Visa applicant must either own at least half of the business or hold an executive or management position. He or she must work at the company fulltime. The company itself must prove an operating business and not a “marginal” enterprise. A marginal enterprise is one in which the business will only make enough money to minimally support the E2 Visa investor and his or her family, with no real job creation or economic growth. Unlike an EB-5 Regional Center, there is no mandatory job creation required, but the business must show some employment growth, albeit not in a fixed period like a Regional Center project.
While in the U.S., the E-2 Visa applicant can only work for this company or its subsidiaries. At the end of this long process, there is no Green Card awaiting. E-2 Visas offer only temporary, not permanent, stays in the United States. E-2 Visas are generally issued for up to five years, but many countries issue such Visas for much shorter periods, sometimes as little as six months. Extensions of the E-2 Visa are possible provided the U.S. company remains in operation.
As noted, EB-5 Visa holders and their spouses and unmarried children under age 21 may live, work or attend schools anywhere in the U.S. An E-2 Visa holder’s spouse may only find employment here if he or she obtains a work permit; there are no work restrictions once a permit is approved. Children under age 21 of E-2 Visa holders cannot work, and upon reaching the age of 21, they must leave the U.S. or obtain e.g. a temporary student Visa.
The one advantage an E2 Visa has over an EB-5 Visa relates to processing times. An E-2 Visa is generally processed within four to eight weeks, depending on the consulate. Expect an EB-5 Visa application to take longer, with an average 20 months passing before the applicant receives a conditional Green Card.
Making the Transition
If you are already an E2 Visa holder, it is possible to make the transition from this Visa to the EB-5 one. For some E-2 investors, it is a matter of increasing the investment amount to meet EB-5 requirements and ensuring their company will create the required 10 jobs within the two-year period. Keep in mind that retained earnings, or the amount of net income remaining after dividends are paid to shareholders, does not count toward the increased investment amount.
The E-2 investment must meet all criteria for the EB-5 investment, such as proof that the funds derive from lawful sources, that they remain at risk, and that the monies are personal and not from a foreign corporation. It is also possible to use a separate investment for EB-5 Visa and Green Card purposes.
Transition from an E-2 to an EB-5 Visa by applying at the U.S. consulate in your country, or, if already in the U.S., work with an immigration lawyer for status adjustment. If you hold lawful status under the E-2, you do not have to leave the country for this status adjustment. The process is complicated, but an immigration attorney can guide you and ensure that the proper paperwork is filed in a timely manner.
How Lightstone Can Help
As one of the largest privately-held real estate companies in the country, Lightstone has raised more than $400 million in EB-5 investments and created nearly 10,000 jobs nationwide. We currently have more than $6 billion in assets under management and development. If you would like more information about the EB-5 Visa and why it is a better choice for most E-2 Visa applicants, please fill out our contact form.