E2 Or EB-5 Visa?

Many families wishing to live in the USA consider the relative advantages and disadvantages of the E2 and EB-5 visas.

In some cases the choice comes down to the funds they have available or wish to utilize. There are two EB-5 programs from which to choose, the Regular Program and the Regional Center Program. The Regular Program has three basic requirements: (1) investment in a “new commercial enterprise” (2) of at least $1,000,000 (or $500,000 in a “TEA” or “rural area”) (3) that results in the creation of at least 10 new full-time jobs. Additionally, the investor is required to take an active enough role in the business that he has at least a policy-making position. The E2 visa is likely to cost much less, indeed many families have paid in the region of $150,000 to $200,000 to purchase a suitable business qualifying for the E2.

However, a key implication that is not always realized is that the E2 visa does not provide the family with permanent residence. A senior American Consular official is reported as saying –

‘I would also like to point out that a non immigrant (E2) visa is not a good option for someone who intends to reside permanently in the United States. If the investor retires or sells their investment, his or her visa status lapses and he or she must leave the US. Only single dependent children under 21 are eligible for visas to accompany their investor parent, and when these children turn 21 they lose their status as a dependent and their visa. The more secure option for those that have the necessary capital is the permanent resident [green card EB5] investor visa. In this case the required investment is one million dollars, or under certain circumstances $500,000.’ John Caulfield, Consul General, US Embassy London.

There have been a number of well reported cases of families and/or their children having to leave the USA due to the E2 visa failing to be renewed. This can still happen even after the family may have lived in America for many years when perhaps their children know no other way of life.

Indeed the situation regarding the limitations has become so notorious that a petition signed by many E2 visa holders, desperate to remain in America, has been drawn up for presentation to Congress.

The New York Times recently reported an unfortunately typical scenario where a family who had been operating a business on an E2 visa for nine years had the renewal of their E2 visa refused. This left them no option other than to return back to the country that had left nearly a decade earlier.

Of course, many do not have the minimum $500,000 required to make the investment for the EB-5 visa. However, for those that do, the fact that it provides permanent residence status is an enormous benefit in many ways.

· Full permanent residency rights apply.

· In certain states you pay lower property tax costs and your children pay lower tuition rates at many Colleges and Universities.

· Children do not have to leave the USA once they turn 21.

Depending upon your circumstances the EB-5 could be seen as an inexpensive option. The one visa covers the entire family, applicant, spouse and all their children under 21. Select either direct investment or the right regional center and not only should you get your $500,000 back at a point in the not too distant future, you may also get a return on your investment. The same cannot be said with confidence about the E2 visa, particularly in the current economic climate.

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