Comparing the United States E2 Treaty Investor and EB5 Immigrant Investor Visas

The fifth preference employment based visa (EB5) was created in 1990 as a way for foreign investors to gain United States permanent residency (and eventual citizenship if desired), through an investment in a new or pre-existing American business that sees the creation of at least 10 new full-time jobs for American workers. The E2 Treaty Investor visa is described by the government's website as being a "nonimmigrant classification (that) allows a national of a treaty country (a country with which the United States maintains a treaty of commerce and navigation) to be admitted to the United States when investing a substantial amount of capital in a U.S. business. Certain employees of such a person or of a qualifying organization may also be eligible for this classification." In this article we will take a closer look at the E2 Treaty Investor and EB5 Immigrant Investor visas to see how the two compare and contrast.



E2 Treaty Investor Visa - As per the government's website:


To qualify for E-2 classification, the treaty investor must:


1) Be a national of a country with which the United States maintains a treaty of commerce and navigation


2) Have invested, or be actively in the process of investing, a substantial amount of capital in a bona fide enterprise in the United States


3) Be seeking to enter the United States solely to develop and direct the investment enterprise. This is established by showing at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.


An "investment" is the treaty investor's placing of capital, including funds and/or other assets, at risk in the commercial sense with the objective of generating a profit. The capital must be subject to partial or total loss if the investment fails. The treaty investor must show that the funds have not been obtained, directly or indirectly, from criminal activity.



A "substantial amount of capital" is:
1) Substantial in relationship to the total cost of either purchasing an established enterprise or establishing a new one
2) Sufficient to ensure the treaty investor's financial commitment to the successful operation of the enterprise
3) Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise. The lower the cost of the enterprise, the higher, proportionately, the investment must be to be considered substantial.

A "bona fide enterprise" refers to a real, active and operating commercial or entrepreneurial undertaking which produces services or goods for profit. It must meet applicable legal requirements for doing business within its jurisdiction.



Marginal Enterprises - The investment enterprise may not be marginal. A marginal enterprise is one that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. Depending on the facts, a new enterprise might not be considered marginal even if it lacks the current capacity to generate such income. In such cases, however, the enterprise should have the capacity to generate such income within five years from the date that the treaty investor's E-2 classification begins.




General Qualifications of the Employee of a Treaty Investor


To qualify for E-2 classification, the employee of a treaty investor must:
1) Be the same nationality of the principal alien employer (who must have the nationality of the treaty country)
2) Meet the definition of "employee" under relevant law
3) Either be engaging in duties of an executive or supervisory character, or if employed in a lesser capacity, have special qualifications.

If the principal alien employer is not an individual, it must be an enterprise or organization at least 50% owned by persons in the United States who have the nationality of the treaty country. These owners must be maintaining nonimmigrant treaty investor status. If the owners are not in the United States, they must be, if they were to seek admission to this country, classifiable as nonimmigrant treaty investors.

Duties which are of an "executive or supervisory character" are those which primarily provide the employee ultimate control and responsibility for the organization's overall operation, or a major component of it.
Special qualifications are skills which make the employee's services essential to the efficient operation of the business. There are several qualities or circumstances which could, depending on the facts, meet this requirement. These include, but are not limited to:
1) The degree of proven expertise in the employee's area of operations
2) Whether others possess the employee's specific skills
3) The salary that the special qualifications can command
4) Whether the skills and qualifications are readily available in the United States.
Knowledge of a foreign language and culture does not, by itself, meet this requirement. Note that in some cases a skill that is essential at one point in time may become commonplace, and therefore no longer qualifying, at a later date.


EB5 Visa - In stark contrast to the E2 visa, lays the eb5 investor visa. According to the government's web page, to qualify for the eb5 visa program you must:

1) Invest or be in the process of investing at least $1,000,000. If your investment is in a designated targeted employment area (A Targeted Employment Area is defined by law as "a rural area or an area that has experienced high unemployment of at least 150 percent of the national average.) then the minimum investment requirement is $500,000.


2) Benefit the U.S. economy by providing goods or services to U.S. markets.

3) Create full-time employment for at least 10 U.S. workers. This includes U.S. citizens, Green Card holders (lawful permanent residents) and other individuals lawfully authorized to work in the U.S. (however it does not include you (the immigrant), or your spouse, sons or daughters).


4) Be involved in the day-to-day management of the new business or directly manage it through formulating business policy - for example as a Limited Partner, corporate officer or board member.



We see in this comparison that despite the E2 Treaty Trader and EB5 immigrant investor visa are very different in nature and offer disparate paths to a green card visa. While the E2 allows a national of a treaty country to come to the United States for the purposes of conducting international trade on their own behalf, the EB5 visa relies on an immigrant's investment to create new full-time jobs for the American workforce.





This article was written by Terry Martin. He recommends you visit http://eb5central.com for more information on the eb5 investor visa, also known as the immigrant investor visa.