Investors hoping to establish a future in the U.S. may find it difficult to understand the different immigration processes. The United States Citizenship and Immigration Services (USCIS) offers specific pathways to foreign nationals. The E-2 and EB-5 visas are two common options for foreign investors planning to live in the U.S.

While both programs have benefits, they also have different requirements. One such distinction is the issue of proving source-of-funds. Applications often get delayed or denied due to a lack of understanding of these requirements.

In this article, we will provide an overview of the EB-5 and E-2 visas. We’ll also compare the source-of-funds requirements for both pathways.

Immigrant vs. Nonimmigrant Investor Visas

Foreign investors have different options that enable them to live in the U.S. legally. Selecting the right route for you and your family can help you make precise and timely decisions about your immigration goals.

An immigrant investor visa, namely the EB-5 visa, provides a pathway to permanent residency, commonly known as a Green Card. This means that investors and their immediate family members can live and work in the U.S. indefinitely, enjoy most of the rights and benefits of U.S. citizens (except for voting), and eventually apply for citizenship.

On the other hand, a nonimmigrant visa is a type of visa issued to foreign nationals who wish to enter the United States temporarily for a specific purpose, such as tourism, business, study, or temporary work. Unlike immigrant visas, nonimmigrant visas are designed for those who plan to stay for a limited period of time. Visa holders are expected to return to their home country once their visa expires. Among all U.S. nonimmigrant visas—which include tourist visas, student visas, and others—the only investment visa category is the E-2 visa.

Let’s consider these two popular investor visa options below.

EB-5 Immigrant Investor Program

Introduced by the Immigration Act of 1990, the EB-5 Immigrant Investor Program offers foreign nationals who invest in a new commercial enterprise an avenue to obtain a U.S. Green Card. The program’s aim is to boost the U.S. economy by attracting foreign investors and creating jobs for Americans.

EB-5 applicants can either invest $1,050,000, or a reduced rate of $800,000 in a targeted employment area (TEA).

The investor typically submits an application to USCIS using Form I-526E (Immigrant Petition by Regional Center Investor). To approve this petition, USCIS requires documentation of the investment, a business plan, and source-of-funds evidence that shows the capital investment is based on lawful sources—among other requirements and supporting documents. After approval, investors and their eligible families can become conditional Green Card holders and enjoy several benefits. They can later apply to remove the conditions on their Green Cards and become lawful permanent residents of the United States.

E-2 Nonimmigrant Treaty Investor Program

The E-2 visa allows investors to enter and work in the U.S. temporarily. These visas are for nationals of countries that have a treaty of navigation or commerce with the U.S. Unlike the EB-5, the E-2 visa does not have a set minimum investment amount but requires a substantial investment in a U.S. business.

E-2 visa holders can renew their visas indefinitely if they continue to meet the requirements, but this visa does not lead to permanent residency. Foreign investors cannot apply for a Green Card directly through the E-2 visa.

Individuals interested in this visa must submit Form DS-160, the Online Nonimmigrant Visa Application, and the DS-156E (Nonimmigrant Treaty Trader/Investor Application). Applicants must provide other documents such as passports and marriage certificates, as well as business-related paperwork like proof of ownership and a comprehensive business plan.

EB-5 vs. E-2: Comparing the Source-of-Funds Requirements

Both EB-5 and E-2 visa applicants are required to provide proof of lawful source of funds.

EB-5 investors must submit detailed records that trace their investments from the source to the point of investment in the U.S. There are several sources of funds accepted, including earnings, gifts, loans, property sales, inheritances, and personal savings. However, both the source and the path of the investment funds need to be thoroughly documented.

In contrast, E-2 visas do not require as much source-of-funds information. E-2 application documents must show that the money will go to the E-2 business and that it was obtained lawfully, but the path of funds and supporting evidence are less scrutinized.

While E-2 applicants do not need to conduct the same thorough tracing and paperwork, consular officers or adjudicators must still guarantee that the funds are legitimately obtained and adequate for the business entity.

Given that the EB-5 visa leads to permanent residency, it’s only natural that its source-of-funds processes are more closely scrutinized compared to the nonimmigrant E-2 visa. Because this is such a crucial aspect of the EB-5 process, it can directly impact the success of an application. This is why investors must pay close attention to their source-of-funds package and work with the best immigration attorneys and EB-5 experts to ensure their documentation is comprehensive and accurate.

Transitioning From E-2 to EB-5

E-2 visa holders may opt to transition to EB-5 status, provided they fulfill all requirements, including presenting evidence for a lawful source of funds. Therefore, E-2 applicants should be careful about keeping a detailed paper trail of their source and path of funds from the start. This precaution is important in case they eventually choose to switch to a long-term permanent residency option in the U.S. Proper documentation from the beginning can help E-2 investors make a smoother transition to EB-5 status and ensure compliance with USCIS requirements.

Compile Your Source-of-Funds Documentation With EB5AN

EB-5 applicants finance their investments in a number of ways. Since every investor’s situation is unique, there isn’t a comprehensive collection of standard source-of-funds documentation.

Instead, EB-5 investors can collaborate with industry experts to determine the necessary documents to meet USCIS’s requirements and increase their chances of financial and immigration success.

EB5AN has helped more than 2,300 families from 60 countries relocate to the U.S. as lawful permanent residents. Schedule a free call with our expert team today to answer any questions about your source-of-funds package or any other EB-5 visa details.