For individuals who may be interested in working, investing, or starting a business in the United States, two options to consider are the E-2 Treaty Investor Visa and the EB-5 Immigrant Investor Visa. Although the two visas may initially sound similar, they are are substantially different. This article will first briefly cover the basics of each visa before discussing key differences between the two.
The E-2 “Treaty Investor” Visa
The E-2 Visa, or “Treaty Investor Visa,” is a nonimmigrant visa that is awarded to foreign nationals who make a substantial investment into a U.S. business. There are a number of qualifications required to be able to obtain E-2 status, ranging from nationality to the investment itself.
E-2 Visa Requirements
Nationality: The basis of eligibility for any E status, including E-2 treaty investor status, requires the foreign national to be a citizen of a country that possesses a qualifying treaty with the United States. Additionally, the U.S. company must be at least 50 percent owned by nationals of that same treaty country. The Department of State keeps an updated list of treaty countries eligible for E status.
Investment: Individuals who want to qualify for an E-2 visa must intend to come to the U.S. to develop and direct the operation of a business or enterprise. Therefore, passive investments typically do not meet the requirements for an E-2 visa. The foreign national must also intend to play an active role in managing, directing, and developing the business, which generally involves demonstrating involvement in decision-making and having significant control over the business. In addition to the requirements of the individual, the investment itself must also meet several conditions.
For starters, the qualifying investment must be at-risk and irrevocably committed to the prospective enterprise. In other words, the applicant must be close to starting business operations and the enterprise cannot be in a preliminary or speculative stage, so simply having money sitting in a bank account is not sufficient. The investment must be subject to potential gains or partial/total losses.
Interestingly, there is no fixed minimum investment that is required to be eligible for an E-2 visa. Instead, the investment must be substantial, which means that the U.S. government will examine the amount of the investment in relation to the cost of purchasing or creating the business and determine if it is appropriate for the type and scale of the business. This means that, when deciding how much to invest, you should invest an amount that is sufficient to demonstrate that you are financially committed to the successful operation of the enterprise.
Finally, the investment cannot be marginal, meaning that it must have the capacity to make a positive economic impact outside of just earning a living for the foreign national. This typically involves the enterprise eventually employing U.S. workers, creating U.S. jobs, and subsequently benefiting the U.S. economy.
Intent to Depart: Although the E-2 visa is eligible for renewal, since it is a nonimmigrant visa, the applicant must maintain an intent to depart the U.S. upon expiration of the E-2 status. Typically, this intent is communicated through a written statement.
The EB-5 “Immigrant Investor” Visa
The EB-5 Immigrant Investor Program is a program that creates a direct pathway for foreign nationals to obtain a green card (lawful permanent resident status) in the United States. This visa program is targeted toward foreign nationals who invest a significant amount of capital into the U.S., and also comes with its own set of requirements.
EB-5 Visa Requirements
Nationality: There is no nationality requirement for the EB-5 visa. The EB-5 Immigrant Investor Program is available to foreign nationals from any country.
Investment: The minimum investment amount is $1,050,000. For investments in a Targeted Employment Area (TEA), the minimum investment amount is slightly lower, at $800,000. The required minimum investment amount in a TEA is comparatively lower than the amount outside of a TEA, because it represents rural areas or areas with high unemployment rates (at least 150% of the national average). These investment amounts are automatically adjusted by the Department of Homeland Security (DHS) based on inflation every five years starting October 1, 2024.
In addition to the minimum required investment amount, the EB-5 visa program has a job creation requirement. Applicants who wish to obtain an EB-5 visa must demonstrate that their investment will create at least 10 full-time jobs for qualifying U.S. workers within two years of their admission to the United States.
The interesting part of the EB-5 investment scheme is if you invest in a regional center, there are various benefits, Congress created the EB-5 regional center projects to simplify the investment process and thus attract more investors to stimulate economic growth. Under the EB-5 regional center program, multiple EB-5 investors can pool their funds together to invest into a single investment that is managed by a USCIS approved EB-5 regional center. The EB-5 regional center program has been re-authorized by the U.S. Congress and will be available to any new investors who invest in EB-5 projects before 2027.
There are two main types of TEA: rural areas and high unemployment urban areas. EB5AN provides both types of investment projects.
There are several benefits to investing in rural EB-5 projects, including:
- Reduced minimum investment—as mentioned above, projects located in a rural TEA require an investment of $800,000 not $1,050,000.
- Priority processing of Form I-526E means faster Green Card approval.
- 20% reserved visa set aside means you’re less likely to get stuck in a visa backlog; especially important if you were born in India or China.
We have seen approvals from start to finish in a TEA investment in 10 months. That’s amazing when you think of the backlogs for other types of cases. In addition, there are certain regional centers who guarantee approval of the I-526E and offer refunds of your investment if there is a denial. It’s a terrific vehicle for those who would simply wish to live in the United States.
Key Differences Between E-2 and EB-5 Visas
| E-2 Visa | EB-5 Visa | |
| Visa Type | Nonimmigrant/Temporary | Immigrant |
| Investment Amount | No set minimum amount but must be substantial | At least $800,000 in TEAs or $1.05 million elsewhere |
| Job Creation | No explicit requirement but expected to contribute to U.S. economy | At least 10 full-time jobs created within two years of investment. This is taken care of by the regional centers. |
| Nationality Requirement | Must be from qualifying treaty country | No nationality requirement; open to all countries |
| Processing Time | Weeks to months | Months to several years; subject to visa backlogs (except TEA $800k investments where we’ve seen 10 month approvals) |
| Permanent Residency | No permanent residency; must intend to leave the U.S. upon expiration of status | Direct pathway to permanent residency |
| Business Involvement | Must be actively involved in the enterprise | More flexibility in involvement |
Nationality Requirements:
- The E-2 visa is only available to foreign nationals of countries that possess a qualifying treaty with the U.S. The U.S. company must also be at least 50% owned by nationals of that country.
- The EB-5 visa is open to investors from all countries, although processing times may vary based on country of origin.
Pathway to Permanent Residency:
- The E-2 visa is a nonimmigrant visa that only grants temporary status with no direct pathway to citizenship. An E-2 visa is generally granted for 3-5 years, depending on the treaty country, and is eligible for indefinite renewals contingent upon continued successful operation of the business.
- The EB-5 visa is classified as an immigrant visa, and thus provides a direct pathway to a green card that grants permanent residency to the investor.
Minimum Investment:
- There is no minimum investment amount for the E-2 visa. We generally see investments of a minimum of $300-$500k. Most importantly, the investment amount must be enough to demonstrate a commitment to the successful operation of the business.
- For the EB-5 visa, the minimum required investment is $1.05 million for investments outside of a TEA, and $800,000 for those inside of a TEA.
Active Involvement in Business:
- An E-2 visa holder must be actively involved in the management and operation of the U.S. business that is tied to their investment. This often means that the E-2 visa holder is limited to living in a location close to their business.
- An EB-5 investor does not have the same requirement of active involvement, and is thus free to live and work anywhere in the U.S.
Basic FAQs About E-2 vs. EB-5
Am I eligible for both E-2 and EB-5 visas?
It depends. The E-2 visa requires you to be a citizen of a treaty country with the United States. However, the EB-5 visa has no nationality requirements, so it is open to citizens of all countries, regardless of whether they have a treaty with the United States. Citizens of common countries that can qualify for the EB-5 visa but not the E-2 include citizens of China and India.
What types of businesses qualify under each visa?
An E-2 visa requires investment in a bona fide, operational, for-profit business. The enterprise can be a startup, franchise, or existing company, but it cannot be nonprofit institution or association. In contrast, EB-5 investments simply must meet the job creation requirement.
Do I have to start my own enterprise, or can I invest in an existing one?
Either option is possible for both visas. For the E-2 visa, many investors choose to open franchises or subsidiaries of existing businesses.
Do I have to be actively involved in the business?
You are required to be actively involved in overseeing the operations of the business for an E-2 visa. However, for the EB-5, active involvement in the business is not required, and more passive involvement is permissible.
Are there restrictions on where I can live or work in the U.S. under each visa?
For the E-2 visa, you should live near the location of your business in order to maintain the required active role in its operations.
On the other hand, there is no geographic restriction on where you can live for the EB-5 visa, so you are free to live anywhere in the United States.
Which visa gives me a quicker path to a green card?
The EB-5 visa paves a direct pathway to a green card. However, the E-2 visa is a nonimmigrant visa and does not directly offer a pathway to lawful permanent resident status. Instead, the E-2 visa can eventually be used as a stepping stone to an EB-5 or other immigrant visa.
How long does it take to get each visa approved?
The process to obtain an E-2 visa is generally quicker than that of an EB-5 visa, because it is a nonimmigrant visa. Once the initial requirements are met, the E-2 visa applicant can expect a decision within a few months. However, for the EB-5 visa, the processing time after filing the initial petition can take anywhere from a few months to several years, with an average processing time of 3-5 years. Additionally, the EB-5 visa is subject to visa backlogs, while the E-2 visa is not.
Can I switch from an E-2 to an EB-5 visa later on?
Yes, it is possible to start with an E-2 visa and subsequently pursue an EB-5 visa once you are ready to meet the necessary requirements.
What if I have been denied a nonimmigrant visa in the past?
You are still eligible for both an E-2 and EB-5 visa, even if you have been denied a nonimmigrant visa in the past. However, it is important to address the reasons for the previous denial and demonstrate eligibility in your application.
What if I want to bring my family with me to the U.S.?
Both visas allow you to bring a spouse and any unmarried children under the age of 21 with you to the United States.
Will my spouse be able to work in the U.S.?
For the E-2 visa, your spouse will enter the U.S. with an E-2S status, meaning that they are automatically granted work authorization. For the EB-5 visa, your spouse will be able apply for and obtain work authorization while waiting for the EB-5 Green Card application to be processed, and eventually without restriction once they become a derivative green card holder./div>