In this article I propose to provide a visual summary of the difference between the E-2 work visa and the EB5 green card to explain why the E-2 visa may be a better choice for you as an investor immigrant. (For those unfamiliar with these immigration options, see my previous article here and requirements here for the E-2 visa. See my previous article here and the requirements here for the EB-5 program.)
|E-2 work visa Advantages||EB-5 green card Disadvantages|
|1. Quick processing times – a few months||1. Slow processing time – two years or as many as seven or eight for backlog applicants eg. Chinese.|
|2. Investment – perhaps $200,000 U.S. or even less, depending on business involved.||2. Investment – $500,000 U.S. for regional center projects, $ 1 million for direct investment option.|
|3. Control of Funds in investor’s business – less stringent “due diligence” required.||3. No control of funds invested in third-party project if regional center – heavy “due diligence” required, risk of loss required.|
|4. Travel flexibility – less concern about maintaining domicile and physical presence.||4. Need to maintain “domicile” and rigid enforcement of residence rules|
|5. Immediate permission to work in the USA, spouse can work anywhere, children can go to school and college at internal resident tuition rates.||5. Waiting abroad for approval from Immigration – two plus years and as much as seven or eight if in the backlog.|
|6. Low legal Cost – Roughly $10,000 – $20,000 U.S.||6. High cost approximately – $50,000 – $ 70,000 or more in fees|
|7. Possible tax advantages – as an nonimmigrant resident if principal resident stays in USA not more than 122 days per year no tax on worldwide income (seek advice).||7. Possible clouded judgment of promoters and advisors due to considerable financial rewards for finding EB-5 investors. Taxation on worldwide income of investor.|
|8. Less paperwork- more flexible treatment of investor on compliance with rules||8. More paperwork – severe enforcement of rules|
|E-2 Disadvantages||EB-5 Advantages|
|1. Must work – passive investment not enough. Therefore must speak at least some English.||1. Permanent resident status|
|2. The immigrant investor’s U.S. presence is tied to the business success – must work.||2. No work requirement|
|3. Must renew the visa every 5 years or so.||3. Renewal of permanent residence cards every ten years.|
|4. No clear route to green card/ U.S. citizenship||4. Long term certainty. Path to citizenship.|
What if you are a citizen of a country that does not have an investment treaty with the United States to make you eligible to apply for a E-2 work visa? What if you live in countries like China, Nigeria, Lebanon, Saudi Arabia, Dubai, UAE, Iraq, Syria or Afghanistan? What can you do? You can consider applying for Citizenship by Investment in Grenada, a country in the Caribbean that could help you because it has an investment treaty with the U.S. You could qualify for an E-2 visa indirectly through that country.
Visual summary of benefit of Grenada Citizenship by Investment Option for Investors from non-treaty countries:
Let’s consider China as a typical example.
Chinese citizen -> Three years + more wait, for EB-5 -> USA permanent residence.
Chinese citizen -> EB-5 Status = Tax on worldwide income
Chinese citizen -> CANNOT get an E-2 visa -> USA (No treaty).
Work Around Through Grenada:
Chinese citizen -> $200,000 USD + 12 weeks -> Grenada citizen.
Grenada (Chinese) citizen –> $ 200,000 USD + 2 months => US E-2 visa holder for 5 years.
Chinese citizen –> Grenada citizen -> USA in E-2 status- all in less than six months.
- Live and work anywhere in the United States.;
- Children go to school at in-state local tuition rates.
- Flexibility re: time required for principal applicant in the USA unlike EB-5 permanent resident six month maximum away time requirement.
Key extra benefit:
If principal E-2 visa holder not physically in USA > 122 days/ year = no U.S. tax on worldwide income. (Seek independent tax advice about this).
As for legal fees, costs and disbursements, about $ 75,000 USD in total.
China does not allow dual citizenship.
However, consider this posted internet comment below, regarding an analogous country:
Lyth Basem, Lived in Saudi Arabia for 10 years … I have a lot of Saudi friends who are secretly dual-citizens, when they want to travel on their second passport, they catch a plane to a different gulf country, and then they use their other passport to get to wherever they want to go from there. If they’re ever caught by the authorities, then the government forces them to pick between both citizenships. (Posted here. Please note, this is NOT my advice, it is included here simply as an observation of what is happening related to this area.)
Conclusion: With Congressional changes coming to the EB-5 program that likely will increase the investment amount required and make it more difficult for an investor to apply, the E-2 visa may make a lot of sense. Careful consideration of the tax and citizenship questions need to be involved, however. Hopefully these visual summaries will help you in that regard.