L-1 Visa vs. E-2 Visa: The Key Differences

The L-1 and E-2 visas are powerful options for investors and entrepreneurs. Both of these options allow someone to live and work in the United States.

While the L-1 visa and the E-2 visa have many similarities, they are very different in many ways. In this guide, I will compare these 2 visa options to help you determine whether the L-1 visa or E-2 visa is the right option for you.

Overview

1. Quick Introduction to L-1 Visa and E-2 Visa

2. Non-Immigrant Visas

3. Position-Based vs. Investment-Based Visa

4. Availability Based on Nationality

5. Work Authorization

6. Work Authorization for Spouse

7. Visa Duration

8. Ability to Convert to Green Card

9. New Offices and Existing Offices

10. Conclusion

1. Quick Introduction to L-1 Visa and E-2 Visa

The L-1 visa and the E-2 visa have different requirements. In this section, I will cover the basics of both of these visas.

L-1 Visa

The L-1 visa is a non-immigrant visa which allows a foreign company to send an employee to work for a related U.S. company. To qualify for an L-1 visa, there are several requirements to fulfill.

L-1 Visa Requirements

• The foreign company and U.S. company must be parent/subsidiary, branch offices, or affiliates.

• In the last three years, the transferred employee must have worked full-time continuously for one year for the foreign company.

• The employee's role in the foreign company must have been managerial, executive, or for specialized knowledge.

• The employee's new role in the U.S. company must be managerial, executive, or for specialized knowledge.

E-2 Visa

The E-2 visa is a non-immigrant visa for investors, entrepreneurs, and people looking to run a business in the United States. With an E-2 visa, you can start a new US business or invest in an existing business.

E-2 Visa Requirements

• You must be a national of an E-2 treat country.

• You must intend to depart the US once your E-2 status ends.

• You must make a substantial investment in a U.S. company.

• Your E-2 business must be an active, for-profit business.

• Your E-2 business must not be a marginal enterprise.

• You must be entering the U.S. to direct and develop your E-2 business.

• Your investment funds' source must be lawful.

• Your investment must be irrevocably committed to the E-2 business and must be at-risk.

2. Non-Immigrant Visas

The key similarity between the L-1 and E-2 visas is that they are both non-immigrant visas. They both are temporary and do not lead directly to a green card. While both of these visas are temporary, they can both be renewed. Later in this guide, I will talk about the duration of each of these visas.

Additionally, while the L-1 and E-2 visa do not directly lead to a green card, there are ways to convert both of these visas into a green card (permanent residence). Later in this article, I will discuss how to do this.

3. Position-Based vs. Investment-Based Visa

One of the fundamental differences between the L-1 visa and E-2 visa has to do with the focus of the visa.

L-1 Visa

For the L-1 visa, the main focus is on the L-1 visa beneficiary’s job duties. Specifically, the L-1 visa requires that the L-1 visa beneficiary (the person applying for the L-1 visa) must have worked in a managerial, executive, or specialized knowledge position with the foreign company. The L-1 visa also requires that the L-1 visa beneficiary will work in a managerial, executive, or specialized knowledge position with the US company. The L-1 visa has 2 categories: L-1A and L-1B. The L-1A category is for workers working in a managerial or executive capacity. The L-1B category is for workers working in a specialized knowledge capacity. The job description forms the basis for which visa category to apply under.

Basically, the main focus of the L-1 visa is to make sure that the L-1 worker’s job duties are truly managerial, executive, or specialized knowledge in nature.

E2 Visa

For the E-2 visa, the main focus has to do with making an investment in a US business. Specifically, the E-2 visa requires that you make a substantial investment in a US business.

The Foreign Affairs Manual states: “No set dollar figural constitutes a minimum amount of investment to be considered ‘substantial’ for E-2 visa purposes” [9 FAM 402.9-6(D)].

Instead, USCIS conducts a proportionality test. The proportion is the amount of money invested versus the value of the business.

As a general rule of thumb, at my firm, I like to see that at least $100,000 invested in the business and put at risk. The higher the investment, the better the chance for your investment to be considered substantial.

4. Availability Based on Nationality

One of the main differences between the L-1 visa and the E-2 visa has to do with the availability of the visa.

E-2 Visa

The E-2 visa is based on a treaty and is only available to people from certain countries. In order to be eligible for an E-2 visa, you must have the nationality of a country that has an E-2 treaty with the United States. Here is a list of the E-2 treaty countries. While there are many E-2 treaty countries, there are also many countries that do not have an E-2 treaty. Some major countries that do not have an E-2 treaty with the U.S. include China, Russia, India, and Brazil.

L-1 Visa

The L-1 visa is not based on a treaty. People with all nationalities are eligible to apply for the L-1 visa (excluding travel ban issues).

5. Work Authorization

Both the L-1 visa and the E-2 visa authorize you to work in the United States.

With an L-1 visa, you can only work for your U.S. company petitioner.

With an E-2 visa, you must work for your E-2 business. You cannot be a passive investor. As an E-2 investor, you must be direct and develop the E-2 business (meaning that you are actively involved in the business). You may not work for other businesses that are not your E-2 business.

6. Work Authorization for Spouse

Both the L-1 visa and the E-2 visa allow your spouse to obtain work authorization.

The spouse of an L-1 visa holder may apply for an L-2 visa which is eligible for work authorization.

The spouse of an E-2 visa holder, may also apply for an E-2 visa. The spouse would also be eligible for work authorization as the dependent of the principal E-2 investor.

7. Visa Duration

The E-2 and L-1 visas have different maximum durations of stay.

L-1 Visa

For a new office, the initial visa is granted for a 1-year period and can be extended. For an existing office, the L-1 visa is granted for a 3-year period and can be extended.

For an L-1A visa, the maximum duration is 7 years. For an L-1B visa, the max has a maximum duration is 5 years.

E-2 Visa

The E-2 visa’s validity period depends on the country issuing the visa. Most E-2 visas range from 1 year to 5 years.

The E-2 visa can be renewed as long as your E-2 company continues to satisfy all the E-2 visa requirements. There is no limit to the number of times an E-2 visa can be renewed.

Important Point:

If your E-2 visa is valid for 5 years, this does not mean that you may remain inside the US for 5 years straight. The E-2 visa gives 2 years of status every time you enter the US. As long as your E-2 visa is still valid, you may exit and re-enter the US for another 2 years of status. This concept can be confusing to understand, so if you have any questions about this, please email me at contact@ashoorilaw.com.

8. Ability to Convert to Green Card

Both the E2 visa and the L-1 visa are non-immigrant visas. This means that they do not directly lead to a green card. However, both the L-1 and the E-2 visa can be converted to a green card.

L-1 Visa to Green Card

There are multiple ways to go from an L-1 visa to green card. One of the most common ways to go from an L-1 visa to green card is through the EB1C immigrant visa category. The EB1C in an immigrant visa category which very closely resembles the L-1A visa with some key differences.

In addition to the EB1C option, another way to go from L-1 visa to green card is through an employer sponsored green card. To learn more about how to go from an L-1 visa to green card, please see my article on this subject here.

E-2 Visa to Green Card

There are multiple ways to go from an E-2 visa to green card. One option to do this is through the EB-5 visa. The EB-5 visa is an investment-based immigrant visa. Through the EB-5 visa someone can apply for a green card based on making an investment in a U.S. company. As of the time this article is being written, the minimum EB-5 investment amount is $800,000. One of the benefits of going from an E-2 visa to an EB-5 visa is that you may be able to credit the amount you’ve already invested in your E-2 business toward your required EB-5 investment. This is a complex area of immigration law, so if you have any questions about this, feel free to email me directly at contact@ashoorilaw.com.

Another way to go from an E-2 visa to green card is through an employer sponsored green card. To learn more about how to go from an E-2 visa to green card, please take a look at my article on how to do this.

9. Availability for New Businesses and Existing Businesses

Both new businesses and existing businesses are eligible to apply for an E-2 or an L-1 visa, assuming all requirements are met.

Under the L-1 visa, you may apply for a “new office” L-1 if your U.S. business has been operational for less than 1 year. Basically, the L-1 visa has a special option for new offices. Through the L-1 visa, a foreign company can transfer an employee to come to the U.S. to work for a brand-new office. If the U.S. business has been operating for longer than a year, the foreign company can also transfer the L-1 beneficiary to the U.S. company (this would be an existing office L-1 visa).

To qualify for the E2 visa, you can either start a new business or invest in an existing business. These two visas present excellent opportunities for people to create new businesses in the U.S.

10. Conclusion

The L-1 visa and E-2 visa are both great options for coming to the U.S. if you are an entrepreneur, investor, or high-level manager/executive. These visas have many benefits and similarities. Simultaneously, the L-1 visa and E-2 visa have several key differences.

You should now have a much better understanding of the similarities and differences between these two visas.

If you would like further help in choosing between these two visa categories or if you have any questions, please email me at contact@ashoorilaw.com.  I would be happy to help you.