L1 vs. EB5
Posted on 12月 26, 2006 by Warren Wen | Category: Immigration
For Wealthy Investors, is EB-5 a Better Choice to Come to the U.S.?
In the previous article, we analyzed the types of business and locations in the United States that is suitable for foreign investors who plan to apply for the L visa. In this article we will discuss which would be a better choice for investors who are rich and have significant amount of money to invest, between the L-1 visa and the EB-5 investment visa.
Mr. Wu asked:
I have a business which is doing very well in Asia and it is also growing fast in the U.S. market. In order to give my child a better opportunity to live and study in the United States and to personally manage my company’s expansion in the U.S., I am thinking about permanently moving to the United States. I’ve read your previous articles and found that I am qualified for both the EB-5 and the L visa. However, I’ve heard that because of the great number of fraud cases found in L visa applications, the U.S. government audits L visa application very strictly. In the meanwhile, I have also heard that increasing number of L-1 applications is reported these days because a lot of people are applying for L-1 visa since more people are qualified for L-1 than for EB-5. In my situation, I have more than few million dollars to invest in the U.S., so the money is not an issue to me. Then, would the EB-5 investment visa be a better choice in my case?
In the end of 1980s and the beginning of 1990s, a lot of people from Asia, especially from Korea and China, applied for the L-1 visa to come to the United States. Among them, many did not have the financial capability to run a real business in the U.S. As a result, it was reported that a lot of fraud scams were involved and the U.S. government got very suspicious about L visa applications from Asia. Applications have been under strict scrutiny and it was not uncommon for the cases to be audited. During that period and the time shortly after that, it was not easy to get L visa applications approved. However, the situation has changed significantly nowadays. The U.S. is running significant deficits with the budget and the international trade. Demand for foreign investment is growing day by day. As the result, the U.S. government’s attitude towards foreign investments, both local and national, has changed dramatically in recent years and has been more open to foreign investors who wish to come to the U.S. with an L visa application.
Meanwhile, the economy of Asian countries, including Korea and China is growing to be more significant. People from Korea and China are no longer regarded poor. It is getting recognized more by the public in the U.S that people from Korea and China have enough financial capabilities to invest in the United States. Consequently, as long as the L-1 applicants could demonstrate their wealth and financial ability to invest in the U.S. by documents, it is not as difficult to get the L visa approved as it had been before.
The same is not true in case of EB-5 applications. Due to many fraud cases and the related comprehensive litigations regarding the EB-5 investor program in previous years, the USCIS has developed a negative view regarding the EB-5 applications. As a result, each year less than 1/3 of the visas allocated to the EB-5 program have been used and the denial rate for the EB-5 visa is reported to be as high as 75%. In theory, the EB-5 program may be a perfect way for the foreign investors with significant wealth to immigrate to the U.S., but in practice, it is very difficult. Partly, it would be due to the negative attitude towards the EB-5 applicants by the USCIS, but may also be due to the fact that Asian investors in general have difficulties in proving their personal wealth and source of their income for the investment.
Thus, summarizing all the factors from above, L-1 proves to be an easier way for the investors with significant wealth to come to the United States.
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.