By Attorneys Robert L. Reeves and Joseph I. Elias
When discussing investor visas to the United States, one must understand that they fall into two general categories known as immigrant or nonimmigrant visas. Immigrant visas are commonly known as the green card and allow investors and their family to live permanently in the US. Nonimmigrant investor visas are generally for temporary admission into the US to manage the investment. They also can include the right for the investors’ immediate family members to reside in the US. Some even grant the investor’s spouse the right to work in the US. Both categories are plagued with myths, misrepresentations and inaccuracies that tend to scare off investors. This article will address the most common investor visa myths.
The first myth common to both categories is that these visas are impossibly difficult to obtain. This is untrue and literally thousands of investors per year are granted immigrant and nonimmigrant visas to the United States. A good common sense approach with a well developed business plan is a central element to getting these visas approved. The US government requires a clear explanation of the nature of the investment and the business goals that are expected to be achieved supported by documentation of each assertion. With careful review, planning and thorough documentation, foreign investors find the US government is open to issuing investment visas.
This brings us to the next common myth that the investment must be $1 million or more. This myth stems from confusing one of the requirements for one type of immigrant investor visa and applying it broadly to all investor visas. The EB-5 immigrant visa is the source of this myth.
The EB-5 is known as the employment creation visa, or, the $1 million green card visa. This immigrant visa is available for investors whose investment company can create 10 new jobs in the United States within 2 years. There is a minimum fixed investment amount of either $1 million or $500,000 depending on the location of the investment. Rural areas and targeted employment areas (areas with unemployment rate twice that of the national average) qualify for $500,000 investments. Within the EB-5 category is a subset of investments known as Pilot Projects. Pilot Projects are investment companies that have established to the satisfaction of the Immigration Service that, for each investor in the company, 10 new jobs will be created directly or indirectly. Many of these qualify for the $500,000 investment and are involved in a variety of industries such as real estate development, manufacturing, dairy farms, ski resorts and even to major motion picture studio productions.
Pilot projects typically have a dedicated management team responsible for the day-to-day operations of the investment. The investor is usually involved in decision making as a limited partner or limited liability shareholder. The pilot project is therefore a very useful investment vehicle for investors who need to devote the bulk of their time to other endeavors such as running other businesses.
If an investor wishes to maintain greater control in the management of the company, he or she may establish a new company or even buy into an existing company. This investor must directly create 10 new full time jobs, and if the business is not in a Targeted Employment or Rural area, will need to invest $1 million.
On the nonimmigrant side, there are two general investment visa categories known as L-1 and E visa. The L-1 is for intercompany transferees who are being transferred in an executive, management, or specialized knowledge capacity to the parent, subsidiary or affiliate company located in the US. The E visa is similar to the L-1 but is limited to citizens of countries that have a treaty of trade or commerce with the US such as the Philippines, Taiwan, Japan, England, Korea, Germany, and many other countries. There is no threshold minimum amount required for these investor visas, but the startup costs must make business fiscal sense.
The E visa category is broader because it allows an individual to set up his own company in the US that will generate substantial revenues. It also can be renewed continuously without limit. The L-1 visa in contrast is limited to 7 years maximum for managers and executives and 5 years for specialized knowledge personnel. The E-2 investment must be able to show that the business can generate revenues greater than that needed to support the E-2 investor in the US. Examples of successful E-2 investments include snack shops and restaurants, gas stations, accounting firms, RV park, nail salons, and major corporations. They come in all shapes and sizes as long as the investor can show that the company will generate substantial revenues. Both the L and the E visa allow the spouse of the investor to obtain work authorization while in the US.
For more information on investor visas, be sure to catch Episode 2 of “The Immigration Experts” which will cover investor visas to the US. Investor visas are not impossible to obtain and do not require $1 million in investment funds. They come in many shapes and sizes and are obtainable with straightforward preparation and documentation.