E2 Visa: the EB5 alternative

image of United States Visa with E2

E2 and EB5 Visas

The Securities and Exchange Commission announced recently that it intends to prioritize review of the EB5 program in 2016. While this will eventually strengthen the EB5 program, in the immediate future it is likely to further slow down adjudication of EB5 applications; right now, without the SEC’s enhanced review, it takes 15.5 months to adjudicate an EB5 petition. For some foreign nationals, an E2 visa may be a viable bridge to a delayed EB5 visa.

E2s are only available for nationals of certain countries

Before you continue reading, please know E2s are only available for nationals of certain countries. E2 visas are referred to as “treaty investor” visas. If the United States has a qualifying treaty with a particular country, then an E2 is available. If there is no such treaty, then no E2 will be available. Most notably, the United States does not have a qualifying treaty with China, a country that has produced thousands of EB5 investors. To determine whether a particular country qualifies for E2 visas, check the list here.
Assuming the foreign national is from a qualifying country, to qualify for an E2, an investor must intend to develop and direct a real commercial entity and invest a substantial amount.

First, generally, the primary applicant must direct the company. To strengthen an application, the investor should have the authority and right to control the company.

Second, the business must be real and active. This requires an investment to be more than a paper organization or speculative investment held for potential appreciation.

Third, the investor must invest a “substantial amount.” Technically, there is no minimum investment; rather, the investment must be substantial in proportion to the needs of the business. An investment is “substantial” if the amount invested is a significant percentage of the amount necessary to buy or begin a particular business.

Finally, the investment must be intended to achieve more than a “marginal” return. A marginal return is one that does no more than provide a living for the investor and his or her family. Thus, the enterprise must demonstrate a present or future capacity to generate more than a job for the investor over its first five years.

In light of the EB5 program’s delays, an E2 can be a great transitional visa:

  1. they generally take only three to four months to process.
  2. they last up to five years and can be renewed in perpetuity.
  3. the spouse of a primary E2 applicant can acquire general work authorization.

Finally, if the E2 investment is designed to satisfy the EB5 requirements, an E2 investor can be admitted to the United States, file an EB5 application, and wait for approval inside the United States.

BRADLEY B. BANIAS, a former attorney with DOJ’s Office of Immigration Litigation, is developing a nationwide, federal court immigration litigation practice at Barnwell, Whaley, Patterson and Helms in Charleston, SC. The author’s views do not constitute legal advice or representation.  Terms of use-disclaimer.