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Who wants to live, study or work in the United States?

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February 20, 2018

Who wants to live, study or work in the United States?

Who wants to live, study or work in the United States?

EB-5 vs E2: Sounds like we are comparing fax machines, right? But these two programmes, are two of the best ways to attain residency in the United States.

But that’s where similarities end.

When considering either of these, it’s vital to understand their exact requirements along with which best suits your specific needs.

So, first things first – what’s the difference between the EB-5 and E-2 programmes?

EB-5 Immigrant Investor Program: The EB-5 programme is an immigration visa that allows you and your family to live, work and study in the US permanently. You’re looking at investment from USD 500,000 into a new commercial enterprise if you invest in a target employment area (either a rural district or somewhere with high unemployment) or up to USD 1m elsewhere. To qualify, your investment must create at least 10 full-time jobs.

So how to measure this? Well, the key phrase here is good faith, as the US Citizenship and Immigration Services, USCIS, puts it. You don’t actually have to have made the full investment when you file your application (although your application won’t be accepted if you’ve not invested at all). Likewise, you meet the job creation requirement as long as you can prove ‘it is more likely than not the required jobs will be created’.

Once your application has been approved, you and your family will receive conditional permanent residency for two years.

You can then apply to remove the conditions of your residency within the 90-day period before your two year anniversary of residency. To become a permanent resident without condition you then submit evidence that you’ve met and maintained your investment over those two years.

You’re also expected to prove your investment did actually create those 10 full-time jobs – but there’s no requirement to have maintained those jobs.

Once the conditions are removed, you’re then a permanent US resident – with everything that entails.

A major advantage to the EB-5 program is that you’re entitled to apply for US citizenship through naturalisation after only five years.

Another major advantage to the EB-5 programme is that you’re entitled to apply for US citizenship through naturalisation after only five years. To go this route you’ll have to meet certain other conditions including English language skills and knowledge of US history and government, but that’s not too stringent when you consider what you get in return.

So it boils down to this: USD 500,000 at-risk capital for at least two years, in exchange for permanent US residency – and potentially citizenship at well down the line. Plus your family are included, that means spouse and any dependent children under 21.

Let’s look at how the E-2 visa stacks up against this.

E-2 Treaty Investors Program:

The E-2 nonimmigrant classification allows a national of a treaty country (a country with which the United States maintains a treaty of commerce and navigation) to be admitted to the United States when investing a substantial amount of capital in a U.S. business. Certain employees of such a person or of a qualifying organisation may also be eligible for this classification.

See U.S. Department of State's Treaty Countries for a current list of countries with which the United States maintains a treaty of commerce and navigation.

USCIS don’t give an exact dollar amount here, but they define ‘substantial amount of capital’ as three things:

  • Substantial in relation to the total cost of buying or establishing an enterprise
  • Sufficient to ensure your financial commitment to the success of the enterprise
  • Large enough that you’re likely to successfully develop and direct the enterprise

As well as your investment, you’re only eligible for E-2 status if you’re looking to enter and live in the US specifically to ‘develop and direct’ your investment enterprise. Practically speaking, that means you’ll either need 50% ownership or hold a managerial or decision-making position.

As with the EB-5, the idea of good faith is central. USCIS note your investment must be into a ‘bona fide enterprise’ which ‘may not be marginal’. In other words, we’re talking about a genuine, active, operational for-profit enterprise that generates sufficient income to provide at least a minimal living for you and your family.

The idea of ‘substantial’ is liable to change, but the principle is key. You’re looking at a sincere investment into an enterprise with which you’re genuinely committed to succeeding.

That given, you can gain E-2 status for you and your family for two years with the option of unlimited two-year extensions while the conditions are maintained. In theory, then, E-2 status is equivalent to permanent residency – but only while you’re working in the enterprise you originally invested into. If your status changes you’re expected to leave the US again.

You can gain E-2 status for you and your family for two years with the option of unlimited two-year extensions while the conditions are maintained.

So let’s put them side-by-side and break down the main advantages of each opportunity:

3 biggest advantages of the EB-5 Immigrant Investor Program

Here’s the top three for the EB-5 program.

1. Gain US green card: The E-2 program isn’t a green card and while it does grant residency, that residency is always time-limited and conditional. In contrast, the EB-5 is a US green card – allowing you to reside permanently in the US and, within only five years, become eligible for citizenship. Many would say the US is the ultimate relocation destination, boasting a unique culture, incredible personal freedoms, and exceptional quality of life.

2. Shorter investment period: The EB-5 Immigrant Investor Program does, admittedly, take some financial clout – but you don’t need to hold that investment indefinitely as with the E-2 program. You must meet and maintain that USD 500,000 or USD 1m investment in good faith for the two-year conditional residency period, but once you’re granted permanent residency you can pull your investment should you prefer.

3. Less stringent requirements: The requirement to gain the EB-5 visa is primarily financial. If you meet the required investment into the required area, and create the required jobs, there aren’t many other criteria aside from some minor fees, a short interview and standard medical exams. That makes the EB-5 an attractive option if you’re not from a US treaty nation – a prerequisite for the E-2 program.

3 biggest advantages of the E-2 Treaty Investors Program

Here’s where the E-2 program distinguishes itself.

1. More affordable: As we’ve explored above, USCIS give the investment criteria here as ‘substantial’ – but ‘substantial’ is relative to the size of the enterprise you invest into. As long as the enterprise isn’t marginal – meaning it’s expected to generate enough income for you to live off – then it’s eligible. Which could mean a significantly smaller enterprise than you’re probably imagining – perhaps around USD 100,000. Certainly you’re looking at a significantly smaller investment than the USD 1m which is required for the EB-5.

2. Faster processing time: You can gain E-2 status much faster than EB-5 status. Right now, the Immigrant Investor Program Office for EB-5 applications is processing applications submitted in late 2015, so you could be looking at a fairly major delay here. In contrast, the Treaty Investors E-2 program was processed in an average of 24 days in 2016. Plus, if that isn’t fast enough, there’s an option to fast-track through the Premium Processing Service. This guarantees processing within 15 calendar days for a fee of USD 1,225. This service isn’t available for the EB-5.

You can gain E-2 status much faster than EB-5 status.

3. Flexible residency: As an E-2 treaty investor, you can decide not to reside in the US for an unspecified amount of time while you hold E-2 status. As long as your visa is valid when you return to the US, you’ll generally be granted an automatic two-year readmission without additional paperwork. This gives you great flexibility over where you live, without automatically voiding your E-2 status.

Weighing up your options – which US program is for you?

The EB-5 program is ideal if you want a US green card, and have the financial means to invest into business for at least two years. There’s no requirement to maintain this business beyond two years unless you want to, and your permanent resident status isn’t dependent on the success of the business as long as you met the criteria originally.

The E-2 program really comes into its own if you’re genuinely interested in doing business in the US. The main opportunity here is the chance to establish, grow and run a business in the States – and your residency is fundamentally tied to the success of that business. E-2 status doesn’t lead to permanent residency or citizenship – but while you hold it, it allows you to conduct business easily through the US. If you are not from an E-2 Treaty Country, there’s another option. You can apply for the Grenada Citizenship by Investment program and, as part of a treaty country, you will then be eligible to enter the E-2 program.

Investment through the EB-5 program is more a means to an end – permanent residency – while investment through E-2 is investment for its own sake, to power business success. Both are equally valid but very different paths, depending what you’re ultimately hoping to achieve.

Next Generation Equity specialises in dual citizenship-by-investment and residency-by-investment programmes around the world. To schedule a no obligation consultation.