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Opening a Business in the United States? Comparing the L Visa and E Visa Categories

While most visa categories for businesses require “sponsorship” by U.S. businesses or institutions, two visa categories allow business investors and entrepreneurs to open a business in the United States – the L visa and E visa. While these two visas can be used separately, together, they can be the cornerstone of a robust immigration plan for multinational companies.

Both visa categories require the business is ready to open – the visa application should be one of the last considerations. For these visas, care should be taken that office space is procured and plans are in place to open the business (if you are thinking of opening a business in the United States, but are still in the planning phase, read our business primer for foreign investors here). In both cases, spouses and dependent children under 21 can accompany the visa holders to the United States. Beyond that, L visas and E visas share other similarities but also many differences. For even more information, download our free, comprehensive L Visa Guide and E Visa Guide.

E-2 Visa – the Entrepreneur’s Visa

The E-2 visa is a well-established avenue for foreign entrepreneurs to live and work in the United States. With a concrete business plan and a substantial personal investment, foreign entrepreneurs can open a business anywhere in the United States, in practically any field.

Because investment visas require so much groundwork to be laid before consideration, many foreign investors choose to open franchises or purchase existing businesses. Other entrepreneurs choose to build on their experiences as business owners in their own country to start their business. It is important to make sure you have a passport from an E Visa Treaty Country, and to keep in mind that all employees hired on an E visa must also hail from the country of the E visa business owner.

E Visa Limitations:

Perhaps the most limiting factor associated with the E-2 visa is that it is a non-immigrant visa and does not provide a path to permanent residence to the United States. The E-2 visa expires as soon as the business is no longer functional in the United States. In some cases, an investment can become so large that an investor qualifies for an EB-5 Visa. Investors who can show they invest $500,000 in targeted employment areas, or $1,000,000 in other areas, can become eligible for U.S. Green Cards under the EB-5 visa program.

While this limitation can be a major impediment, it is important to note the E visa can be renewed in perpetuity, for as long as the business is open.

L Visa – to Expand an Existing Company into the United States

L visas allow foreign companies to open a new office in the United States and transfer foreign employees to work in executive or management capacity for the company, or as employees with specialized knowledge of the company. Employees transferred on an L visa should be previously employed by the company for at least one year of the previous three-year period.

Additionally, both the foreign company and the US company must have a qualifying relationship (parent company, subsidiary, affiliate/sister company, branch office). You will have to show the relationship between the two companies. The foreign company can pay for the new US office (the investment does not have to come from applicant’s personal savings). Unlike E visas, the L visa is not limited to treaty countries.

L visa holders can apply for permanent residence in the United States. This path to citizenship is considered an advantage of opening a business in the United States on an L Visa.

L Visa Limitations

The nature of the L visa is that it creates a bond between a foreign business and its United States counterpart. As such, the company must maintain its status as a functional company outside of the United States for L visa holders to maintain their status. If an entrepreneur plans to close their foreign business once their business is open in the United States, the L visa will not work.

Unlike the E visa, L visas also have a limit of stay of seven years for executives/managers (L-1A visa) or five years for specialized knowledge employees (L-1B visa). Initially, employees entering the U.S. to establish a new office can stay one year. Once the office is set up, employees will be allowed a maximum initial stay of three years.  L visa extensions may be granted in increments of up to an additional two years.

Which Investment Visa is Right for You?

L visa and E visas provide unique opportunities for entrepreneurs and foreign investors. It is important to consider the advantages and limitations of each visa, and they impact the future of your business and its employees. We have worked with foreign investors from six continents as they have opened successful businesses in the United States, and we would be happy to help you learn more about your options. Contact us today for free consultation about whether an investment visa could work for you.

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