EB-5 vs. EB-2 Investment Visas: What's the Difference?

Published: 08th October 2009
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Many individuals wish to enter the U.S. for investment purposes. As soon as they look into the prospect, however, the question arises: Do I need an EB-5 or EB-2 investment visa? Here is a short FAQ that can help clear up the confusion for foreign nationals seeking to invest and reside in the United States.

What qualifies as an investment for purposes of the E-2 treaty investor visa?

According to the United States Citizenship and Immigration Services (UCIS), "the treaty investor's placing of capital, including funds and other assets, at risk in the commercial sense with the objective of generating a profit." The two key defining points for E-2 investment purposes are "placing capital at risk" and "with the objective of generating a profit".

Why do I need an investment visa?

While there are many types of visas, each one has its own requirements and regulations, specifying who is eligible to stay in the U.S., how long they may stay, and the permitted purpose of the stay. An investment visa is a specific type of visa, which allows the qualifying foreign national the ability to reside in the U.S. for the purpose of investment.

Prospective investors may travel to the U.S. on a B-1 (business) visa or through the Visa Waiver Program, however they are not permitted to actively participate in the development and direction of the investment enterprise until they have successfully changed status to a qualifying investor visa. In other words, a potential investor can look for investment opportunities, sign contracts and take the steps to establish the business, but cannot perform productive labor or be an active participant in managing the business.

What types of U.S. investment visas are available?

Currently, there are two types of investment visas to the United States:

- E-2 Investor Visas (Treaty Investors) - The E-2 is geared toward nationals of countries that have a commerce, navigation or friendship treaty with the U.S. such as the United Kingdom, Italy, Ireland, Costa Rica, Egypt and others. Because the E-2 investor visa is a nonimmigrant status, those present in the U.S. under E-2 status must renew their E-2 status on a regular basis.

- EB-5 Investor Visas (Immigrant Investors) - The EB-5 is open to foreign nationals of any country. The EB-5 investment visa is an immigrant visa that allows the entrant to enter and remain in the U.S. as a lawful permanent resident. Lawful permanent residents may eventually qualify for naturalization and U.S. citizenship.

What are the main differences between an E-2 and EB-5 investor visa?

The only things the E-2 and EB-5 visas have in common is that they're both for investors and they both allow those investors into the U.S. From there, the differences are many and dramatic.

- Length of stay

- An E-2 investor visa is temporary. Although it doesn't have a maximum length of time the investor can stay, it's normally only granted for two years at a time. The E-2 is strictly for foreign nationals from treaty countries seeking to remain in the U.S. for the purpose of developing and directing their investment enterprise.

- Foreign nationals in EB-5 investor status, on the other hand, are lawful permanent residents, with the eventual possibility of becoming U.S. citizens. Initially, permanent resident status is conditional for two years. EB-5 conditional residents must apply for removal of the "conditional" status within 90 days of the two-year expiration date.

- Amount of Investment

- With an E-2 investor visa, the treaty investors must have already invested in the U.S. business or be in the process of making a "substantial capital investment." "Substantial" is stipulated as "sufficient enough to ensure the successful operation of the business." As well, it has to be enough of an investment to generate more income than just what the investor and his or her family require to maintain their standard of living.

- The required investment for purposes of EB-5 immigrant investor status is $1 million. However, investors investing in designated rural areas or high unemployment areas may qualify with as little as $500,000.

- Participation

- The E-2 investor visa requires that the treaty investor be involved in the day-to-day activities of the business. Not only must the investor prove that they own at least 50% of the business, but they must show they have operational control of the business as well.

- The EB-5 investor visa only requires that the immigrant investor be involved in management or policy-making.

These are just a few of the differences between the E-2 and EB-5 investment visas. Ultimately, for those wishing to reside permanently in the U.S. and eventually become U.S. citizens, the EB-5 immigrant investor visa is generally the best option.

Hopefully this article has helped you understand the major differences between the EB-5 and E-2 investment visas. If you still have questions or are interested in applying for either visa, it is recommended that you hire an immigration lawyer to make your entry into the U.S. go as smoothly as possible.DISCLAIMER: This article is not written by an immigration lawyer , is not intended as legal advice, and should not be construed by the reader as legal advice. If you seek EB5 investment visa advice, or advice on any of the topics discussed herein, please consult with PowerVisa.com today.

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