EB5 Diligence

Compare E-2 with EB-5

What is the difference between an E-2 and EB-5 visa?

E-2 is a non-immigrant visa that allows citizens of certain treaty countries to work in the U.S for an extended period, provided the business they are investing in remains viable. It allows your children to go to school, often with in-state tuition, and your spouse can work anywhere in the U.S.

EB-5, on the other hand, is an immigrant visa that can lead to U.S. citizenship. Investors who wish to do so can later use their E-2 investment as a down payment for an EB-5 investment if they want to eventually qualify for permanent residency.

Some factors to consider:

Eligibility for E-2 and EB-5 visas

E-2 is only available for citizens of certain treaty countries, whereas EB-5 is open to applicants of any country.

EB-5 vs. E-2 investment requirements

EB-5 requires an investment amount of $900,000 and the creation of at least 10 full-time jobs for U.S. workers. E-2 requires a “substantial” investment, which is not defined by any specific dollar amount. Rather, it is defined by the type of business being invested in. Many E-2 investments are $250,000 or more.

E-2 vs. EB-5 involvement in the business

An E-2 investment requires some involvement in managing the business. This could include a high degree of involvement if you are starting your own business, or a relatively hand’s off approach if you are investing in a turn-key operation. On the other hand, an EB-5 investment can be a completely passive investment.

E-2 vs. EB-5 work opportunities

E-2 investors are restricted to work for the business that acted as their E-2 visa sponsor; in contrast, an EB-5 investor has the freedom to pursue any work opportunity in the U.S. once they receive their Green Card.

An E-2 visa can get you in the U.S. quickly

If there is a need to be in the U.S. quickly, the E-2 visa may be more suitable and can usually be approved within a couple of months. There is no quota and therefore no backlog.

EB-5 takes longer but leads to permanent residency. For some, E-2 may be a good way to spend the EB-5 waiting period in the U.S.

E-2 vs. EB-5 taxation

Green Cards obtained through EB-5 subject the foreign national to U.S. taxation on worldwide income. E-2 visa holders can avoid taxation on worldwide income by reducing the number of days that they spend in the U.S. Consult with your immigration attorney.

E-2 vs. EB-5 requirements for time spent in the U.S.

To maintain your U.S. permanent residency status from EB-5, it is necessary to show that you intend to spend a significant amount of the time — usually at least half the year — in the U.S.

The E-2 visa holder has more flexibility and can spend as much or as little of his or her time in the U.S.as they choose.

E-2 vs. EB-5: which visa is right for you?

If your intent is a more permanent solution, and you want to settle in the U.S. either to work, raise a family, or retire, an EB-5 visa is probably the best solution.

However, if an E-2 investment is a better fit, it may make sense to look at a business that can be easily scaled into an EB-5 investment at a later stage.

Let's discuss which option may be more suitable for you.