The United States has a Gross Domestic Product (GDP) of estimated 18.57 trillion USD as of 2016 and growing between 1-2% per year, which is the largest economy in the world. Moreover, the American dream is to open your own business, grow it, and then exit and retire as a millionaire or even a billionaire. Millions of companies open every year, but this is dream is not just for Americans, foreigner investors are also looking at how to successfully invest in the United States. Many of have been very successful, but the investment immigration laws are very tricky and diverse, so choosing the right one is important.
There are three main investment/employment visas which a foreign investor can use to invest in the U.S. – with some conferring immediate citizenship and others may lead to citizenship indirectly. Those three are: 1) EB-5 investor visa program, 2) E-2 treaty investment visa, and 3) L1-A executive intra-company transfer (for purposes of establishing or operating a U.S. subsidiary). We will examine each one, their minimum requirements and the advantages and disadvantages of using each visa option to fit the foreign investor’s needs.
BASIC VISA REQUIREMENTS
First, the basic minimum requirements for each visa are:
- E-2: investment treaty between the U.S. and foreign country, the operation of a substantial business in the U.S., and foreigner must have controlling interest in the business.
- L1-A: there is a foreign parent company looking to establish a subsidiary in the U.S. to transfer an executive manager to operate the U.S. subsidiary. The executive manager must have worked for the parent company for at least one year in a managerial capacity. The U.S. investment must be substantial.
- EB-5 direct: The EB-5 direct investment program requires a minimum investment of $500,000 USD for targeted employment areas (TEA) and $1,000,000 USD for any other areas (subject to changes in the law) and job creation of at least 10 full-time employees in the U.S.
IMMIGRATION BENEFIT
Second, from an immigrant-based standpoint, the EB-5 direct investment leads directly to a green card after 2 years and then to citizenship after 5 years. However, the E-2 and L1-A are non-immigrant visas, which do not lead to green cards directly. With consistent and competent planning, these two visas are paths of U.S. citizenship if structured properly. For example, an initial E-2 investment of $150,000 USD and consistent investment of $150,000 USD per year over 7 years and job creation of 10 full-time positions will lead to conversion to an EB-5 and the foreign investor has over 20 years to do convert. For the L1-A, the foreign investor/employee manager can be sponsored by the company on an EB-1, which requires at least two levels of management and 6 employees in the U.S. subsidiary to qualify. Depending on your immigration needs in the long-term, one option is the best for you.
CAPITAL REQUIREMENTS
Third, for capital requirements, only the EB-5 program has a minimum requirement of $500,000 USD. The L1-A and E-2 do not have capital requirements, but it is suggested that you invest at least $150,000 USD and it goes up depending on the type of company and business operating.
PROCESSING TIME
Fourth, regarding processing time, each depends on the efficiency of the United States Citizenship and Immigration Services, the volume of petitions, and any quotas, retrogressions, or limits on a particular country, but typically processing times are: EB-5 about 18 – 24 months, L1-A about 90 – 180 days, and E-2s about 90 – 120 days, with the two latter options having expedited processing.
STUDENT COLLEGE TUITION
Fifth, regarding in-state college tuition, the E-2 and L1-A programs still require international rates, but the EB-5 program, subject to state residency requirements, allows the student to study at the local in-state tuition. This is a large determining factor and substantial savings for the foreign investor.
FREEDOM OF TRAVEL
Finally, with respect to freedom to travel internationally or back to the home country, all visas have a manage and control requirement for the foreign investor, but does not require that the investor physically be in the business every single day. Therefore, the foreign investor can travel, but for the EB-5 direct investment visas, the investor must spend a substantial part of the time in the U.S. for the conditional period of first 2 years.
There are other comparison points for the foreign investor to consider and they are laid out in this simple-to-follow chart:
