On Sep 27 2018 by Staff
Evaluating E-2 as an EB-5 Alternative
The EB-5 Reform and Integrity Act of 2022 brought many changes to the EB-5 program. For the latest information, please click here.
For many years, the E-2 visa has probably been the most inconspicuous alternative to EB-5 among all options, and perhaps rightfully so. The reasons are twofold: First, an E-2 visa is not directly available to nationals from countries such as China, India, and Vietnam. As discussed in the article here, a foreign national from one of those countries will need to obtain citizenship from an E-2 treaty country before applying. Second, an E-2 visa is a nonimmigrant visa which by itself does not provide a pathway to permanent residency. While it is possible to “convert” E-2 into EB-5 or EB-1C, the requirements do not run parallel to each other, unlike the L-1A/EB-1C option.
If you were born in China and do not possess the necessary qualification for EB-1A or EB-1C, your dream of coming to the US may have seemingly been shattered by the unprecedented EB-5 wait time in recent years. In your case, an E-2 visa may be the only (albeit not perfect) choice. For those who are qualified for other green card options, you may still want to consider the E-2 option based on your specific needs. Choosing what immigration option to pursue is a major lifetime decision that should be taken seriously. Our evaluation service will evaluate your background and needs and determine whether E-2 visa is indeed the right option for you.
We have discussed the requirements and advantages of E-2 in detail in the past (here and here). Instead of regurgitating the same information, this blog will explain some of the major factors we look at when evaluating whether E-2 visa is the best option for you.
- You want to come to the U.S. quickly
One of the major benefits of E-2 is that it can be obtained quickly. The E-2 investor will first obtain Grenadian citizenship, which can usually be done in about 4 months. The E-2 application can then be submitted to the U.S. consulate in the country of residence. The entire process generally takes about 6-7 months. Getting an EB-1 green card, on the other hand, can easily take over a year. The quick turnaround for E-2 makes it a good option for people who are looking for a program that allows them to come to the US in the shortest amount of time possible.
- You want to start your life in the US while waiting for the EB-5 green card
If you already have a pending EB-5 application, you are probably perturbed by the long wait time mainly because you will have to wait years before you and your family can start your life in the US. With the E-2 visa, you and your family can come to the US in 6-7 months and start living the American Dream before the final arrival of your EB-5 green card. Your children can also go to any public school as an E-2 derivative.
One issue worth noting is that since E-2 is a nonimmigrant visa, an E-2 visa holder must maintain an intent to depart the US upon the termination of the E-2 status. As your attorney, we will advise you on how to effectively address this issue vis-à-vis your pending EB-5 petition at the E-2 visa interview.
- You do not have the desire to get a green card
Having a green card may not be desirable to everyone. Some people, for example, just need a status that allows them to stay in the US for a protracted period time to accompany their young children to go to school. The major drawback for having a green card is the taxation on worldwide income. Further, you will have to maintain your lawful permanent resident status by fulfilling the residency requirements. The E-2 option solves this problem. While it is perfectly fine to reside in the US during the entire E-2 validity period, there is no residency requirement under E-2, which means you do not lose your E-2 status if you choose not to reside in the US. In the meantime, your family can retain their E-2 derivative status and still reside in the US. If having this flexibility is important to you, then E-2 may be a better option than a green card.
Furthermore, as an E-2 visa holder, it is possible to avoid taxation on worldwide income if you spend little time in the US.
- You do not speak English very well
As discussed here, the English language ability can potentially become an insurmountable hurdle for an EB-1C case. For E-2, it is possible to convince the consulate that the applicant can still effectively “develop and direct” the business with her limited English language ability. As part of Klasko’s turnkey solution, we will present to our clients an array of E-2 businesses that we have reviewed scrupulously for immigration approvability. Some of the businesses come with a professional management team that will take over the daily management and provide language assistance. Therefore, E-2 visa is still within reach if you do not speak English very well.
- You have the desire to manage a business in the US, but you want to start small
Further to the discussion above, some of the E-2 businesses in our portfolio require certain level of active involvement. If you possess the necessary language and management skills, you may want to get involved in your business in the US. However, managing a business of a size that is suitable for EB1C could be a daunting task for a new immigrant. E-2 provides an entry point for you to start your business in the US before you are ready to commit further.
- You have limited funds to invest
Unlike EB-5, E-2 visa does not have a minimum investment amount. Rather, the investment is considered “substantial” if the invested amount is sufficient to create or develop the type of enterprise in which the investor is investing. Many of the E-2 businesses in our portfolio will only need an investment in the $200k range, which is significantly lower than investing in an EB-5 project or purchasing a US business to apply for EB-1C.
The flip side is that the E-2 investor will still need to invest additional money to obtain Grenadian citizenship. However, recent legislative changes in Grenada have made it possible to sell the property in the secondary market to another applicant who wishes to apply for Grenadian citizenship.
This blog is part of series evaluating three visa options. You can read the announcement and other blogs in the series here:
The material contained in this article does not constitute direct legal advice and is for informational purposes only. An attorney-client relationship is not presumed or intended by receipt or review of this presentation. The information provided should never replace informed counsel when specific immigration-related guidance is needed.
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