Can’t Afford a Green Card Just Yet? How to Obtain Permanent Residency Through the E-2 Visa
The E-2 treaty investor visa can be a great way for a foreign entrepreneur to open a business and live and work in the United States legally. What’s more, it is relatively affordable in that it only requires a “substantial” capital investment in a bona fide U.S. enterprise (usually in the amount of $100,000 to $250,000). The investor must be seeking to enter the United States solely to develop and direct the investment enterprise. This is established by showing at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.
The E-2 visa allows the status holder from a treaty country, and his or her family, to come to the United States to open and operate a personal business; the spouse and unmarried children under the age of 21 are able to attend school and work as dependents of the visa. Unfortunately, however, the E-2 treaty investor status does not offer a direct path to Permanent Residence. This means that unless the status holder, or the status holder’s immediate family, has a separate path to Permanent Residence, the visa holder and family will not be able to obtain Permanent Residence status, regardless of how long they maintain their E-2 status. This is further complicated by the fact that the E-2 status is temporary and must be regularly renewed with no guarantee of success.
Furthermore, because the E-2 visa is only available to member of treaty countries, it is not available to everyone. For example, citizens of mainland China, India, Russia, and Brazil are ineligible for the E-2 visa.
For someone who has invested a substantial amount of money and established a business and life in the United States, the uncertainty of perpetual renewals can be extremely frustrating. Fortunately, for some investors, U.S. Immigration law offers an option to increase their investment and change to an investment-based Permanent Resident status known as the EB-5.
What is the E-2 Visa?
The E-2 treaty investor visa permits nationals of certain “treaty countries” to enter the United States for the purposes of investing in and operating a business. For the purposes of this classification, “treaty countries” are countries that maintain treaties of commerce and navigation with the United States.
Qualified treaty investors and employees will be allowed a maximum initial stay of two years. Requests for extension of stay may be granted in increments of up to two years each, and there is no maximum limit to the number of extensions an E-2 non-immigrant may be granted. All E-2 non-immigrants, however, must maintain an intention to depart the United States when their status expires or is terminated.
To qualify for E-2 status, the applicant must be able to show he or she has invested, or is in the process of investing, a “substantial amount of capital” in the creation or purchase of a United States-based enterprise. The investment must be put “at risk”, meaning the assets invested must be committed and for the most part non-refundable.
To maintain E-2 status through consecutive renewal applications, the applicant must be able to show the business has remained solvent and has continued to show profit. For a more detailed explanation of the E-2 status and how to qualify, please see our previous article “The E-2 ‘Entrepreneur Investor’ Visa Provides a Path for Small Business Owners to Live and Work in the US”.
What is the EB-5 Program?
In contrast to the temporary E-2 investor status, the EB-5 program offers Permanent Resident status to nationals of foreign countries who invest $1 million dollars (or $500,000 in certain areas targeted for economic revitalization) into the creation of a new United States-based enterprise, or the revitalization of an existing enterprise.
Unlike the E-2 program, the EB-5 program is available to nationals of any country. Along with the investment, the EB-5 program also requires that the investor create at least 10 jobs for United States citizens. For investors who do not wish to operate their own enterprise, the EB-5 program also permits foreign investors to invest in Regional Centers.
A Regional Center is an investment company certified by United States Citizenship and Immigration Services (USCIS) to take pools of foreign capital for the purposes of investing in real estate projects in the United States. In return for proper investment in a Regional Center, the foreign investor is permitted to obtain Permanent Resident status through the EB-5 program. As most Regional Centers invest in areas targeted for economic revitalization, the investment requirement is generally $500,000, rather than $1 million. For more details on the EB-5 program, see our previous article “Looking for Path to a Green Card? Try the EB-5 Investor Visa”.
Transitioning from an E-2 to the EB-5
For an E-2 investor currently residing in the United States, the first step in making the change to Permanent Resident status is to determine whether he or she can meet the requirements of the EB-5 program.
At minimum, the investor will have to invest $500,000. Note, the money already invested as part of the E-2 investor process cannot be counted toward this investment.
The investor cannot sell or liquidate the E-2 enterprise prior to creating the EB-5 investment. Attempting to obtain Permanent Resident status this way will leave the investor out of any legal status.
However, the investor can make the required investment, obtain an EB-5 status, and then sell or liquidate the E-2 enterprise and use the funds to recoup some of the EB-5 investment.
The investor can invest an additional $1 million into the investor’s existing E-2 enterprise (or $500,000 if the existing enterprise is in an area targeting for economic revitalization). It should be cautioned however, that this strategy will only work if the existing business can utilize that large of an investment.
The investor must be able to show that the money is actually being invested (as opposed to sitting in a bank account).
Furthermore, the investor will also need to show the he or she created at least ten new US jobs on top of any jobs created under the E-2 investment.
Once an E-2 investor has made the required investment, the next step is to apply for EB-5 status. The application process for those requesting a change of status while in the United States (which is different from applicants applying from abroad) is a two-step process.
The first step is to submit a petition to USCIS requesting approval of the investment and permission to obtain Permanent Resident status. This step requires the applicant investor to demonstrate that the investment has been properly made and the investment enterprise (personal enterprise or regional center) is solvent, has created the required jobs, and is profitable. Once the petition is approved, the next step is to apply for an adjustment of status to that of a Permanent Resident.
How to Adjust Status from E-2 to EB-5
The opportunity to change from a temporary E-2 status to that of a permanent EB-5 status is the result of a provision of the United States immigration law called “adjustment of status”. By utilizing this provision, the applicant can move from one status to the other without having to leave the United States. To adjust status from an E-2, to that of an EB-5, requires the applicant to show the following:
1. The applicant is currently in a valid, unexpired status in the United States, 2. The applicant has not violated any immigration laws or certain other laws of the United States, 3. The applicant has obtained an approved alien entrepreneur petition, and 4. An immigrant visa is immediately available to the applicant.
The requirement that an immigrant visa be immediately available to the applicant is of particular importance here. The United States government puts caps on the number of Permanent Resident statuses that it offers each year. These cap numbers are specific to different categories of Permanent Residence and countries of applicant origin and reset every year. If the cap has not been filled for a particular status and country of origin in a particular year, then an immigrant visa will be immediately available.
The Last Step: Adjustment of Status and Removing Conditions on Permanent Residency
Once an immigrant visa is available, the applicant investor files for an adjustment of status. This applicant is generally less complex and requires less documentation than the previously filed petition. Once the adjustment of status application has been filed, the applicant and applicant’s family will generally be required to attend an interview in the United States. If approved, the applicant and applicant’s family will receive their 2 year provisional Permanent Resident status.
After two years, the visa holder will have to show that he or she met the visa requirements, and the conditions on his or her Permanent Residency can be removed. The Green Card holder can apply for citizenship within five (5) years after the conditional Green Card is issued.
Due to the increasing demand for Permanent Resident status in the United States, the number of applications far exceed the number of available immigrant visas. When this occurs, the particular immigrant status goes into “retrogression”. This means that applicants who apply after the cap is filled are put on a waiting list until those who applied before them receive their status. In some cases the waiting list can be years long.
Retrogression Implications for citizens of Mainland China
Traditionally, the EB-5 immigrant status has not had an issue with retrogression as the cap has never been filled in any given year. This has changed recently for citizens from Mainland China. Last year, for the first time, EB-5 applicants from Mainland China were put into retrogression and currently must wait several years before applying for Permanent Resident status. When a specific group of applicants are put into retrogression, an immigrant visa is not immediately available and thus the nationals of that country cannot apply for adjustment of status until the visa becomes available.
In such cases, the applicant must find a different status to remain in the United States while awaiting immigrant visa availability. If the applicant cannot find another status, he or she will be required to leave the United States, wait for an immigrant visa to become available, and apply for entry to the United States at an embassy or consulate in their home country. Currently for nationals of all countries other than Mainland China, immigrant visas based on the EB-5 category are now immediately available.
The process of adjusting from an E-2 investor status to that of an EB-5 Permanent Resident status is highly complicated. It requires an understanding of accounting, real estate, investments, securities, and immigration law. We highly recommend that anyone considering adjusting status, or applying for EB-5 status in general, seek the advice and counsel of a team of experienced experts.
Think you might qualify for an E-2 or EB-5 visa?
The Grady Firm works with dynamic employers and employees across the country to prepare successful employment-based visa and Green Card applications. In addition, we help individuals, families, employees, business owners, and investors obtain non-immigrant and immigrant visas (B-1/B2, H-1B, H-2B, L-1A, L-1B, O-1, TN, E-2, E-3), as well and Green Cards and citizenship based on family relationships, investment, or employment.
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Don’t have $500,000 to $1 million to invest just yet? Learn about the E-2 visa.
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