[HOT] Pros and cons of Regional Center EB-5 vs. E-2 investment

* Note that extensive information on E-2/E-1 visas can be obtained by going to www.e-2california.com site.

The advantages of Regional Center EB-5 (the "RC EB-5") case over E-2 visa are:

1. Since E-2 is a nonimmigrant visa/status, obtaining E-2 does not lessen the need to obtain permanent resident status.

2. With RC EB-5 case, you can reside anywhere in the U.S., whereas with E-2 visa, you have to reside near the location of your E-2 business.

3. With E-2 dependent children, once they become 21 years old, they automatically fall out of E-2 status. This means they have to, on their own, apply for a change of status (or visa) to other NIV status -- usually F-1 student status. With RC EB-5 case, as long as the I-526 petition was submitted prior to their reaching 21 years of age, the dependent children's ability to obtain LPR status will not be adversely affected.

4. RC EB-5 Investor does not need to exert energy towards the day-to-day or even primary managerial control over the new commercial enterprise. Specifically, the RC EB-5 Investor can be a limited partner in a limited partnership formed pursuant to relevant Uniform Limited Partnership Act of the applicable state.

5. RC EB-5 Investor can pursue other jobs and/or activities, whereas for E-2 Investor, that is pretty difficult in practice.

6. In many cases, the amount of investment for a RC EB-5 case is not that much higher. Many E-2 business investment requires more than $300,000 USD and even close to $500,000 USD, which is the same amount that RC EB-5 case that also combines TEA feature.

7. With RC EB-5, there is rarely a need to contribute additional capital infusion, but with E-2 investment, additional capital infusion may be required depending on the business situation.

8. There is a greater chance to fail in E-2 investment than with RC EB-5, at least from our perspective.

9. You can invest and acquire a minority interest in the commercial enterprise.

However, E-2 visa has the following advantages over a RC EB-5 case:

1. It can be obtained more quickly -- within 3 or 4 months -- as long as you purchased and made your investment.

2. You can sell and take a loss if something goes wrong. Of course, you will lose your E-2 status unless you purchase another E-2 business.

3. Usually, the amount of investment required to obtain E-2 visa is lower.

4. You will have a controlling interest in your business.

In conclusion, for relatively rich investors, E-2 may not be the best option: If the business turns sour, or the owner is not daily involved in giving all his time and effort into making the E-2 business successful, the business dream of owning a successful E-2 Investor may turn into a nightmare. In fact, former E-2 visa holders who just couldn't continue to lose money and sleep over owning an E-2 business were very motivated to do Regional Center EB-5 cases.

Of course, there may be a reasonable difference of opinion, but any E-2 investor who does not plan on giving most hours of her day into running and managing the E-2 business is advised not pursue E-2 visa unless you have an absolute trust in your business partner.