If you are thinking of investing in a United States business, or if you are ready to expand your company and establish a new office in the U.S., then you are probably already familiar with L-1 and E-2 visas. Both work visas can be obtained within a few months - they are therefore the best to use for investors who want to immigrate quickly to the U.S. In general, although both visa classifications are intended for investors, there are some essential differences between the two classes. The best way to navigate through the L-1 and E-2 requirements is to have a clear overview of what you want to achieve. However, even if you do not have a plan yet, the following table may assist you in coming up with one.
|1 Year Start Up visa, otherwise usually three
|5 Year Visa
|Active Management Required
|Develop and Direct the Business
|Rigid Presence in the U.S.
|Flexible Presence in the U.S.
|No Investment Treaty
|Investment Treaty Needed
|Source of Funds Review and Proof of Sufficient Funds
|Source and Path of Funds Scrutiny
|Direct Path to Green Card (“Dual Intent”)
|No Direct Path to Green Card
|Maximum 7 years
(Experience Abroad of 1 year in the last 3 years).
|No Previous Management Required
|Expand your business
|Invest in a new business
The L-1 classification enables a U.S. employer to transfer an executive or manager from one of its affiliated foreign offices to the United States. This classification also enables a foreign company which does not yet have an affiliated U.S. office to send an executive or manager to the United States with the purpose of establishing one. The E-2 visa allows a national of a treaty country to be admitted to the United States when investing a substantial amount of capital in a U.S. business. If your country does not have an investment treaty with the U.S., unfortunately, your only option would be the L-1 visa. Even if you are eligible to apply for either visa, however, your choice will depend on the requirements involved and your intentions.
Money is not everything, but let me begin with the financial aspects. The U.S. Citizenship and Immigration Service defines an investment as placing capital, or other assets at risk to make a profit. The capital must be subject to loss if the investment fails. The treaty investor must show that the funds have not been obtained from criminal activity.
The requirements of the E-2 investor visa do not establish a minimum amount of investment. However, the amount must be “substantial” relative to the total cost of either purchasing an established company or creating a new one. It must also be sufficient to ensure the investor’s financial commitment to the success of the company. My working rule is that the minimum amount should be $ 150,000 U.S. to start in most instances.
In the L-1 visa scenario, if you open a new office in the U.S., you will need to prove that it is adequately funded so that you will be able to maintain its operation and pay employees. I use $ 175,000 U.S. per employee as my working rule. Moreover, you will be asked to show that you have physical premises for your new office so a lease agreement should be obtained.
As for how long you can stay, an L-1 intra-company transferee can initially stay for up to three years, while setting up a new office allows a maximum initial stay of one year. An extension of stay may be granted in increments of up to an additional two years until the employee has reached the maximum limit of seven years.
While the E-2 visa is usually granted by the U.S. Consulate for five years, holders of the visa can only count on the U.S. Customs and Border Protection officers at a port of entry to grant them a maximum initial stay of two years, subject to renewal. Further extensions of stay are granted in increments of up to two years on each entry, provided the visa in the passport is current. There is no maximum limit to the number of extensions for E-2 visas granted by the Consulate. Nevertheless, you need to keep in mind that extensions are not automatic.
L-1 and E-2 visas require the applicant to be involved in the business. They were not created for passive investors. In both cases, the investor will have to demonstrate that his U.S. company is an active, thriving, for-profit business. For L-1 holders it is important for their non-U.S. entity to remain in operation – it is, after all, called an intra-corporate transfer.
Holding E-2 status demands a lower level of commitment since there is no need for the investor to participate in day-to-day management. On the other hand, active management is required from an L-1 investor, and a more active presence in the U.S. is expected. L-1 visa holders must have worked abroad for the foreign company for at least one year within the last three years. In the E-2 case, no previous experience is required from the applicant. In both instances, however, proof of English language proficiency is required.
Both L-1 and E-2 visas, allow your spouse and dependent children under 21 years of age to accompany you into the United States. The L-1 visa also gives you an opportunity to apply for a green card through the EB-1 category. On the other hand, E-2 investors must demonstrate and maintain their intention to depart the U.S. when their business is completed. No green card is available that way.
The E-2 application process is generally considered to be easier than L-1, but if you have a viable foreign entity, getting an L-1 approval is not that great a challenge.
Hopefully the chart and this explanation will help you to better understand the two visas.
Andy Semotiuk - Forbes