About the E2 Visa
An E2 Business Visa is a nonimmigrant visa which allows a foreign national of a country which maintains a treaty of commerce and navigation or a qualifying international agreement with the U.S., or that has been deemed qualified by legislation to go to the U.S. after investing substantial investment funds in a U.S. business, franchise business, or by creating a new business.
About the EB5 Visa
An EB5 Visa, on the other hand, offers permanent residency to the principal investor in exchange for a minimum investment in a qualifying project or business in the U.S.
Immigrant vs Nonimmigrant
One of the main differences between an E2 Visa and an EB-5 Visa is that the E2 Visa is a nonimmigrant visa while the EB-5 Visa is an immigrant visa. Nonimmigrant Visas are temporary visas and don’t directly lead to a green card, while immigrant visas give permanent resident status in the U.S.
This means that under the EB-5 program, the investor is eligible to acquire a green card, which is the evidence of permanent residency.
If you’re an E2 Visa applicant or holder, you need to prove your intent to depart the US once your visa status ends.
Minimum Investment Amount
The other main difference between an E2 Visa and an EB-5 Visa is the minimum investment amount. Foreign investors under the EB-5 program are required to invest a minimum of USD 800, 000 for projects in a targeted employment area (TEA) or USD 1,050,000 for business investment not located in a TEA. A targeted employment area is considered an area where there’s high unemployment or is considered a rural area.
Meanwhile, the E2 Visa doesn’t have a set minimum investment amount. It requires the foreign investment to a US business to be a substantial amount, but there’s no minimum amount that’s considered substantial. Instead, substantiality is determined by the nature and the requirements of the business.
If the business fails, both the E2 investor and EB5 conditional resident lose their status.
Place of Filing
Petitions for an EB-5 Visa are approved and filed before the USCIS before the investor can apply for the immigrant visa at the U.S. Embassy or Consulate or apply to adjust status in the U.S. if already in the U.S. on a valid nonimmigrant status. Meanwhile, petitions for an E2 Visa are filed directly at the U.S. Embassy or Consulate which can be located in: 1) the investor’s country of birth, 2) the country of citizenship, or 3) a U.S. Consulate in a country of residence or anywhere in the world that’s willing to take the case. Due to this, the interview is critical for E2 Visa petitions. Filing a change of status to E-2 is also possible if the applicant is already in the U.S. on a valid nonimmigrant status.
The E2 Treaty Investor Visa requires that foreign nationals must possess the nationality of the country which maintains a treaty of commerce and navigation which maintains a qualifying international agreement with the U.S., or which has been deemed qualified by legislation.
This doesn’t mean, however, that nationals from countries without an E2 investment treaty with the U.S. are no longer eligible. They can still qualify in two ways: 1) by being a citizen of the treaty country, or 2) by being married to a citizen of a treaty country.
Meanwhile, the EB-5 Visa doesn’t have a nationality requirement.
Job Creation Requirement
The EB-5 program requires the investor to create 10 full-time jobs for qualified U.S. workers, which must be done before they receive their permanent green card.
The E-2 Visa doesn’t have the same requirement. Instead, the investor must show that the business enterprise is not “marginal”. This means that the business has the present or future capacity to generate more than enough income to provide for the minimal living of the investor and their family.
Source of Funds
Both the E2 and EB-5 Investment Visas require that the investor show their investment funds were sourced from legal or lawful means. It may be sourced through employment, the sale of property, a gift, or a loan among others.
The processing time for both the E2 and the EB-5 Visa varies greatly. The process of E2 Visa is much quicker and easier. It can be obtained either through a: 1) Change of Status or 2) Visa Processing. It can take for an E2 Visa to be processed in 4
Meanwhile, the process of an EB5 Visa</a > is very long and has multiple steps. After the processing of Form I-526, it requires: 1) Adjustment of Status or 2) Visa Processing. After this, the investor receives a 2-year conditional green card which they would then remove conditions through Form I-829 3 months before it expires.
The USCIS releases a monthly visa bulletin for the EB-5 Visa priority date. According to the recent October 2023 USCIS Visa Bulletin, the priority date for all countries is ‘Current’ except for China and India, which means that there is no backlog and no retrogression. The application may be filed regardless of the investor’s priority date.
Moreover, in recent years, there have been more people filing for an EB5 visa which creates backlogs and increases wait times due to the quota.
There are only 10,000 EB5 Visas that are available each year and from this 10,000, 3,000 is set for investors who invest in a commercial enterprise that will create jobs in a TEA. Compared to this, the E2 Visa doesn’t have an annual limit or cap on visas issued per year.
Both visas allow the investor to work in the U.S., however, there is a main difference in the extent to which they can work. Under the E2 Visa, they are only allowed to work for the E2 business. Meanwhile, under the EB-5 Visa, they are allowed to work for any company.
Another main difference is that since EB-5 Visa holders obtain green cards, they are subject to the U.S. tax on worldwide income. Meanwhile, E2 Visa holders can avoid tax on their worldwide income by reducing the days they spend in the U.S.
Ownership of Business
The E2 Visa requires that the foreign investor owns at least 50% of the E2 business to qualify. On the other hand, EB-5 Visa investors are not required to own any specific percentage of the business.
Time Spent in the U.S.
Since the EB5 Visa confers lawful permanent residence, the investor must establish ties to the U.S. and not abandon the permanent residency. In general, a U.S permanent resident should not spend more than 6 months outside the U.S. for every trip. If there is a need to stay outside the U.S. for more than one year, it is recommended to apply for a re-entry permit before leaving to avoid abandonment of permanent resident status.
Dependent Family members
For both visas, their dependent family members such as their spouse and unmarried children under the age of 21 can accompany them to the U.S.
Under the EB5 Visa, the investor’s spouse can work under their conditional green card for any employer they desire.
As for the E2 Visa, the investor’s spouse is no longer required to show an Employment Authorization Document (EAD) after the USCIS updated its policy manual. They’re already considered employment authorized based on their E-2 derivative status.
Both visas also allow the investor’s unmarried children under the age of 21 to attend school.
Pursuing Other Opportunities
As we have said, E2 investors must work for the same company for which their temporary visa was issued. Compared to this, EB5 investors can attend school, work anywhere, or enjoy their retirement among others as long as they have their conditional green cards or they’re at least a limited partner or director of the enterprise they invested in.
Benefits of Obtaining a Green Card
As it stands, the main difference between an E-2 Visa and an EB-5 Visa is that the latter confers a green card to the qualified investor. So you might be asking, what are the benefits of obtaining an investment green card?
Here are some of the benefits once you have obtained a green card:
- You become a permanent resident of the U.S;
- Your dependent family members such as your spouse and unmarried children under the age of 21 can also obtain a green card;
- You can do unlimited or multiple business in the U.S;
- You can travel freely anywhere in the world; and
- You have access to the quality of life and benefits of the U.S. economy.
While both the E2 and EB-5 Visa are considered investment visas, they still have stark differences which you must know and understand as a different visa may apply depending on your case or circumstances. Moreover, both visas have different eligibility requirements, which would affect the relevant documents and answers to the interview you would need to prepare.
If you’re still unsure which visa to apply for, Davies & Associates and its team of experienced immigration lawyers can help you determine the
perfect visa for your current goals and needs.