E2 vs. L1 1/2

Posted on November 14, 2006 by Warren Wen | Category: Immigration

In the last article, we talked about Mr. Kim, a Korean client who wanted to invest in the U.S. market, but he was not sure how he should approach it. Besides Mr. Kim, many other foreign investors also wanted to know how they could jump into the U.S. market and make an opportunity.

In general, there are three ways to enter the U.S. market. They are: investment immigration (EB-5), L-1A visa for managers or executives in multinationals companies and E-2 visa for treaty investors. For EB-5, it requires an investor to invest at least $1 million ($500,000 in economically depressed area), so its risk is relatively greater than the L visa or the E-2 visa. For investors with abundant fund, EB-5 could be a possibility.  For majority of the investors whose capital is limited, however, it is not possible for them to get into the U.S. with the EB-5 visa.  Fort them, the only choices would be L and E.

As for the L visa, it is for qualified multinational companies to transfer its managers or executives or employees with specialized knowledge from abroad to work in the U.S. If the multinationals have a branch, a subsidiary, an affiliate or a joint venture in the United States, the investors can apply for L visa as a manager or an executive of the company. If no branch, subsidiary or affiliate exists, it is relatively easy to incorporate or purchase a company because there is no minimum investment amount required for the L visa according to the U.S. immigration law. Thus, the risk would be relatively smaller than EB-5 as well.

L visa holders can work in a U.S. company and travel in and out of the U.S. freely. It is convenient for foreign investors. Meanwhile, the spouse and unmarried children under 21 years of age of an L visa holder can accompany the investor to the U.S. and work or study legally in the U.S., which is one of the greatest advantages for the L visa.

Additionally, another great advantage of the L visa would be that the L-1A visa holder could be on a faster track if he or she wants to get a green card. This is because L-1A holders are considered the first preference of the employment-based immigration. As a result, in applying for green card, he or she would not have to go through the Labor Certification process. Additionally, the waiting period for this category would be much shorter than other employment-based categories, so the L-1A holder could obtain a green card much faster than other employment-based immigrants could.

Enough for the L visa, and what about the advantages for the E-2 visa?

The E-2 visa is geared towards principal owners, supervisors, executives or key employees of U.S. businesses that have 50% or more ownership by the nationals of foreign investment treaty countries. Only citizens of those countries that have investment treaties with the U.S. could apply for this type of visa. This would be one of the biggest advantages of the E-2 visa.

There is also no minimum investment amount required for the E-2 visa according to the U.S. immigration law. And furthermore, as long as the investor has taken significant steps towards establishing business in the U.S., he or she would be qualified for this category, although the business may not be completely established yet. This would be another advantage for the E-2 visa.

And thirdly, there is no restriction on the extension of the E-2 visa, so the investors could stay in the U.S. for a very long time as long as they continued to maintain their E-2 qualifications. The spouse and unmarried children of 21 years of age or younger of the E-2 visa holders could also accompany to the U.S., and the spouse could legally work in the U.S. as well.

Therefore, both L visa and E-2 visa could make a good choice for foreign investors. Then, how do we decide which one is better for you? Using some specific situations as an example, we will try to give the readers a more detailed analysis in the next article.

This article is only for your reference. Please do not apply mechanically to any exact cases. You are welcome to consult our attorneys at Liu & Associates, P.C. For contact information, please click here.