Dear Sophie: What are the pros and cons of the E-2 and L-1A visas?

Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

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Dear Sophie,

We co-founded a startup in Colombia, and we’re thinking about opening a sales office in the U.S.! I would be moving, and my co-founder will continue to run our engineering team from Colombia.

I’m currently considering both the E-2 investor and L-1A executive visas. What are the pros and cons of each?

— Courageous Colombian

Dear Courageous,

What an exciting time and opportunity for you and your team! Congratulations on your U.S. expansion and for all the growth that got you to this stage. These visas are two great options for startup founders to move to the United States to expand their businesses.

Let me start by giving an overview of both the E-2 visa for treaty investors and the L-1A visa for intracompany transferee executives and managers. The visa applications for both are heavily scrutinized by immigration officials, so I recommend working with an immigration attorney to present a strong case.

E-2 visa

The E-2 visa provides a great option for international founders whose home country has a trade and commerce treaty with the U.S. The U.S. Department of State maintains a list of treaty countries. Colombia and more than 75 countries, including Pakistan and Taiwan, are on the list, but other countries such as China and India do not currently have the requisite treaties in place. The E-2 enables international founders to live and work in the United States while investing substantial capital to build a business here.

For a founder to qualify for an E-2 visa as an investor or essential employee, at least half of the U.S. business must be owned by people or companies from your country of citizenship. This can get complicated for startups after several rounds of dilution from U.S. investors. However, if you are forming a subsidiary of an already-profitable Colombian business and not planning to raise VC capital in the U.S., that might not be a big deal for you. Talk to a lawyer about your global corporate structure and your fundraising plans to confirm.

Although the E-2 requirements don’t specify a particular minimum amount of capital that must be invested into the U.S. entity, immigration officers look for large, upfront investments in office space, equipment and inventory, usually in the $100,000 range. Receiving a pre-seed or Series A round in the U.S. or another country can help streamline this portion of your case, but it’s not absolutely necessary. Some founders have succeeded in qualifying for an E-2 with even a transfer of valued intellectual property to their U.S. company.

While the E-2 does not require a U.S. business to create jobs in the future, immigration officials may consider it to be marginal without job creation, which would not bode well for E-2 approval. Already having U.S. employees or having a business plan that includes hiring in the U.S. can aid in the approval of your E-2.

Although there’s no limit on the number of times your E-2 visa can be extended, immigration officials will often want you to demonstrate that you still maintain a residence and ties to your home country and intend to eventually return there. This is called non-immigrant intent, and officials will want to see that you do not intend to or are hopeful of remaining in the U.S. permanently. Despite this, many E-2 founders have successfully found ways to navigate the green card process to stay in the U.S. permanently.

If you are already in the U.S., you can file for a change of status to E-2 from another non-immigrant category (premium processing for a 15-day decision is available). However, if you plan to travel abroad, a USCIS petition approval does not qualify you for an E-2 visa at a consulate abroad, and you will have to reapply at a U.S. embassy or consulate in your home country, which is often a 3- to 10-month process culminating in an E-2 visa interview.

L-1A visa

The L-1A visa provides a great option for international founders who have been working for their startup abroad for at least one year in the past three years and want to open an office in the U.S. or work at an existing U.S. office of their startup.

You will need to show that you have secured an office in the U.S. and that the U.S. office will support your position within one year of the L-1A visa being approved. Even though the work has changed with more people working remotely, U.S. Citizenship and Immigration Services (USCIS) is far more likely to approve a petition for a company that still has a physical office, which immigration officers consider a sign of growth and that your company is serious and viable. We’ve been successful in getting L-1 visas approved for companies situated in a co-working space, assuming certain requirements can be demonstrated.

Like the E-2 visa, the L-1A visa application process will require you to submit business plans, growth models and organization charts. If you’re setting up a new office in the U.S. and are approved for an L-1A, that visa will be valid initially for one year only. To extend the L-1A, you will need to show your U.S. business has met your growth models and is viable. L-1As for managers and executives are usually valid for up to seven years.

L-1 visas are dual-intent, and it’s very easy to apply for a green card in parallel. The L-1A offers a green card corollary for multinational managers and executives, called an EB-1C, which is one possible path to permanent residence for startup founders.

Unlike the E-2 visa, the L-1A approval notice from USCIS can easily be used for a “stamping” appointment at a U.S. consulate.

Pros and cons

To make it easier for you to weigh the advantages and disadvantages of both the E-2 and the L-1A visas, here’s a side-by-side comparison:

There are many options: Please do also consider the O-1A visa for extraordinary ability for startup founders. Best wishes for a fruitful outcome for your U.S. immigration journey and market expansion!

— Sophie

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