There are many options for those who wish to relocate to the U.S. for the purposes of starting a business. However, two of the most commonly used business visas are the L-1 visa and the E-2 visa. This blog article compares the two visa classifications.
L-1 Visa – Advantages
No Minimum Investment Required
To qualify for an L-1, you must have worked for a company outside of the U.S. for at least one year within the last three years in a managerial or “specialized knowledge” capacity, and you must be entering the U.S. to work for an affiliated company (i.e. a parent, subsidiary, affiliate, branch office, or joint venture partner).
To qualify for an E-2, you must be a citizen of a “treaty country” (i.e. a country that has a treaty of commerce with the U.S.), you must be entering the U.S. to manage or work for a business that is at least 50% owned by you and/or other citizens of your country, and you, or the U.S. business itself, must make a substantial investment in the business (we recommend at least USD$150,000).
Unlike with the E-2 visa, the L-1 does not require the visa applicant to make a “substantial investment” into a business in the United States
L-1 Visa – Disadvantages
Company Must be Operational During the Initial One Year Period
If you are obtaining an L-1 to open a new U.S. office, your initial L-1 petition will only be approved for a period of one year. Prior to the expiration of your initial L-1 petition, you will need to file an extension petition. Upon approval of your extension petition, your status will be granted in 2 to 3 year increments for a maximum of 7 years. However, for your initial extension petition to be approved, you will need to show that the U.S. company was actually operational during the initial one year period.
To show that the U.S. company was in fact operational during the initial one year period, the U.S. company should show sales. Also, although not required, the chances of your extension petition being approved increase dramatically if the U.S. company hires employees within the first year of operations. These recommendations can be seen as disadvantages because not all startup companies are able to incur sales, or hire employees, within the first year of operations.
Must have Existing Foreign Company
To qualify for an L-1, you must have worked for a company located outside of the U.S. for at least one year within the threes prior to filing your L-1 petition, and you must be entering the U.S. to work for an existing affiliated company in the U.S. or to open an affiliated company in the U.S.
Whether or not you own the non-U.S. company is not relevant; however, for you to maintain your L-1 status, the non-U.S. company must remain operational. This requirement may be a disadvantage for those who do not work for or own a company outside of the U.S., or those who do not wish to maintain their home-country business, as such individuals would not qualify for an L-1.
Should Start Company that is Related to Non-U.S. Company
Nothing in the regulations require the U.S. and non-U.S. company to operate within similar line of business or provide services or products in the same industry. However, based on our experience, the likelihood of your L-1 petition being denied increases when the two companies are operating within different industries and are not related in terms of service/product offerings. This may be a disadvantage for those who wish to start or purchase a business that is unrelated to their home-country company.
E-2 Visa – Advantages
Once you have held an L-1A for seven years, you and your family will be prohibited from obtaining an L visa for a period of one year. However, the E-2 can be approved for a period of five years, and extended in five year increments indefinitely. Do note, however, that the time period restriction on the L-1 can be avoided by obtaining a green card.
No Restrictions on the Type of Business You can Pursue
The E-2 visa is not an intracompany transfer visa like the L-1. Therefore, the E-2 does not rely on the existence of a foreign company. For this reason, you can obtain an E-2 by starting and/or purchasing any business you wish, regardless of whether or not you are employed by or own a company in your home country.
E-2 Visa – Disadvantages
As noted, to obtain an E-2 visa, you must make a substantial investment in the U.S. business. The investment may come in the form of purchasing an existing U.S. business, or allocating funds towards your own startup. We recommend that the investment be in the amount of at least $150,000. This may be a disadvantage for those who are not able to obtain capital.
If you are interested in obtaining an E-2 or L-1 visa, allow our Calgary U.S. immigration lawyer, or any one of our U.S. immigration lawyers within our Canadian offices, to assist you with the process.