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Strategic US Immigration Options for Investors

Did you know that there are US immigration programs specifically designed for foreign investors? Whether you are a foreign investor looking to live in the US temporarily or permanently, or you are a foreign company looking to expand into the US, there are strategic advantages to utilizing the E-2 Treaty Investor Nonimmigrant Visa and EB-5 Immigrant Investor Programs.

What is the E-2 Treaty Investor Nonimmigrant Visa Program?

The E-2 Treaty Investor Nonimmigrant Visa Program permits citizens of treaty countries, companies deemed as “nationals” of treaty countries under the regulations, who have made significant investment in a new or existing US enterprise, to employ the primary E-2 investor (when investor is individual) or Canadian citizens who will be employed by the US enterprise in an executive, managerial, or essential skills capacity.

While the Foreign Affairs Manual (FAM) used to provide a specific monetary threshold for a substantial E-2 investment, the standard now is that a “substantial investment” is an amount sufficient to ensure the successful operation of the US enterprise as measured by a proportionality test. The proportionality test compares and contrasts the amount or value of the funds or other qualifying investment instruments with the cost of establishing a viable enterprise of the nature contemplated.

The E-2 Investor, whether an individual or company investor, must have control of the US entity, including the ability to direct and develop the US enterprise. Furthermore, the US enterprise must be active and operating and investment utilized prior to application for the E-2 visa and E-2 company registration (where applicable).

Generally, E-2 visas are approved in five (5) year increments which are indefinitely renewable as long as the E-2 enterprise and E-2 applicant continue to meet the eligibility requirements for the E-2 Treaty Investor Nonimmigrant Visa Program.

What is the EB-5 Immigrant Investor Program?

Unlike the E-2 Treaty Investor nonimmigrant visa, the aim of the EB-5 Immigrant Investor Program is to obtain US Lawful Permanent Resident (LPR or green card) status for the investor and their qualifying family members.

Created by Congress in 1990, the EB-5 Immigrant Investor Program was intended to stimulate the US economy through job creation and capital investment by foreign investors. Individuals who make a qualifying investment and otherwise meet all eligibility criteria for the EB-5 program are granted Conditional LPR status for a two-year period. After meeting the requirements to remove conditions, the EB-5 investor may file to remove the conditions and gain full LPR status. 

To qualify for the EB-5, Immigrant Investor Program, one must: establish a new business OR invest in an existing business which was created or restructured after November 19, 1990; invest $1,800,000.00 USD (or $900,000.00 USD if investment is in Targeted Employment Area) in EB-5 enterprise; and ensure that the EB-5 enterprise will create the required employment (see FAQs on EB-5).

Pursuant to the EB-5 and related regulations, the qualifying investment (see our FAQs on EB-5) made by the EB-5 investor must prove that the investment funds were “obtained through lawful means” as defined by 8 C.F.R. § 204.6(j). While this requirement is mostly ensuring that the investment funds did not originate through criminal activities, in practice, it places a high bar for which the investor must provide substantial evidentiary documentation to overcome.

Whether an investor utilizes the E-2 or EB-5 investor programs, it is imperative that the investor have competent and strategic immigration and tax legal advice, strategy, and planning.  To learn more about the US EB-5 Immigrant Investor Program, please join us for our upcoming webinar on August 27, 2020 – “The E-2 and EB-5 Investor Programs: US Immigration Options for Investors.”