Which Visa is the Best Choice When Starting a Business in the US?


When coming to the US to open a business, foreign nationals face a choice of which type of visa will best serve their needs, the E-2 visa (for investors from Treaty Countries) or the L-1A visa (for transfers of managers and executives from a company abroad to a US company). This article compares and contrasts these two visas as first step in helping you understand the issues and key points to consider when making the decision.


E-2 visas can be used only if a treaty of commerce and navigation or a bilateral investment treaty exists between the U.S. and the country of nationality of the foreign company or investor. Treaty countries include (among others): Argentina, Armenia, Australia, Austria, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Canada, Chile, China (Taiwan), Colombia, Costa Rica, Croatia, Czech Republic, Ecuador, Egypt, Finland, France, Georgia, Germany, Grenada, Honduras, Ireland, Italy, Jamaica, Japan, Jordan, South Korea, Lithuania, Luxembourg, Mexico, Mongolia, Morocco, the Netherlands, Norway, Panama, Paraguay, Philippines, Poland, Romania, Senegal, Singapore, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom, and Yugoslavia.

If the foreign national does not belong to a treaty country, then the choice is generally limited to the L-1A visa.


E-2 visa can be used to set-up an entity in the U.S. if the investment involved is substantial. It must be sufficient to ensure the successful operation of the enterprise. The percentage of investment required for a low-cost enterprise is generally higher than the percentage of investment required for a high-cost enterprise. Investment must be in a real operating commercial enterprise. Speculative or passive investment does not qualify. Uncommitted funds in a bank account or similar security are not considered an investment. Your investment may not be marginal, i.e. it must have the capacity to generate significantly more income than just to provide a living for you and your family, or it must have a significant economic impact in the U.S. You must have control of the funds, and the investment must be at risk in the commercial sense. Loans secured with the assets of the investment enterprise only are not considered to be at risk.

The L-1A visa does not have the requirement of substantial investment in the U.S. It can be used for any venture by international companies to set-up a branch, subsidiary or affiliate company in the U.S.


E-2 visas do not require that the foreign national have been employed in a related foreign entity. A treaty national with no foreign employer intending to make an investment or set up a business entity in the U.S. does not have much of a choice other than the E visa, assuming the rest of the conditions are satisfied. Keep in mind that here is also an E-1 visa based on trade of goods between a treaty country and the US, but that falls outside the scope of this article.

To qualify for an L-1 visa the applicant must be an executive or manager who has been an employee of the related foreign company for at least one continuous year within the last three years.


For using the E-2 visa, the company or the individual engaging in trade or investment in the U.S. must have the same nationality as the treaty country. (more than 50% owned by national of the treaty county)

The L-1 visa can be used to transfer an employee of a foreign entity to set-up, manage or work for a related organization in the U.S. The qualifying relationship may be in the form of a parent, subsidiary, branch or an affiliate company.


An E-2 visa may be granted initially for a period of up to five years (depending on the treaty country). Companies that anticipate a “slower start” to get established in the U.S. may prefer the E visa option that gives them a longer initial period to set-up their operations. An E-2 visa can be extended indefinitely for up to five years at a time provided that the stay of the applicant remains temporary and that the qualifying activity continues.

An L-1 for a new company is granted initially for a period of one year. After the expiry of the first year on L-1 status, the applicant has to show that the new U.S. company has been doing business during the past year, and continues to require the services of the applicant as a manager/ executive. An applicant in L-1 status in the U.S. cannot extend his/her L-1 stay beyond a period of 7 years. Once the employee has spent one full year outside the U.S. they can start their time in L-1 status again.


E-2 visas, though they can be extended for an indefinite period of time, still require the applicant to maintain nonimmigrant intent. Starting the permanent residency process may affect the applicant’s ability to maintain or extend E-2 status; however the USCIS and the consular officers generally will accept the statement of the applicant with respect to his or her nonimmigrant intent. Additionally the Geencard process is substantially longer as there is no direct path to residency from the E-2 visa and generally the company that the E-2 holder has started will not be able to be the sponsoring employer for the Geencard.

The L-1 may be the best route in cases where the intention of the applicant is to ultimately apply for a green card during his/her stay in the U.S. An L-1 visa holder may pursue permanent residency and still maintain L-1 status and apply for extension of stay. This may not be possible for E-2 nonimmigrants. Additionally L-1 holders are generally not required to get a labor certification approval before applying for residency. The process is much less time consuming and less expensive.


Which visa will best suit your needs is a decision that the particular applicant must make by weighing the options and considering their specific set of circumstances. A qualified immigration attorney will be able to help you decide which method is right for you and your business.

This article is intended for informational purposes only, and is neither intended to be complete nor exhaustive. It is not intended as legal advice. Each case is different and you should consult an attorney for more information.