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What are the advantages and disadvantages of the E-2 and L-1A visas? • InNewCL

What are the advantages and disadvantages of the E-2 and L-1A visas? • InNewCL

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Sophie Alcorn Contributor

Sophie Alkorn is the founder of Alcorn Immigration Law in Silicon Valley and recognized as 2019 Law Firm of the Year in California for Entrepreneur Immigration Services by the Global Law Experts Awards. It connects people to the businesses and opportunities that expand their lives. More posts from this contributor Dear Sophie, When can I register my employee for the H-1B lottery? Dear Sophie, How do tech layoffs affect PERM and the green card process?

Here’s another installment of Dear Sophie, the advice column that answers immigration-related questions about working in tech companies.

“Your questions are critical to spreading knowledge that enables people around the world to rise above borders and achieve their dreams,” says Sophie Alcorn, a Silicon Valley-based immigration attorney. “Whether you’re in HR, a founder, or looking for a job in Silicon Valley, I’d love to answer your questions in my next column.”

InNewCL+ members get access to weekly Dear Sophie columns; Use promo code ALCORN to purchase a 1-year or 2-year subscription at 50% off.

Dear Sophie,

We co-founded a startup in Colombia and are thinking about opening a sales office in the US! I would be relocating and my co-founder will continue to lead our engineering team from Colombia.

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

— Brave Colombian

Dear brave ones,

What an exciting time and opportunity for you and your team! Congratulations on your US expansion and all the growth that has brought you to this stage. These visas are two great options for startup founders to move to the United States to grow their business.

First, let me provide an overview of the E-2 visa for contract investors and the L-1A visa for corporate executives and managers. Visa applications for both are rigorously reviewed by immigration officials, so I recommend working with an immigration attorney to present a strong case.

E-2 visa

The E-2 visa offers a great option for international founders whose home country has a trade agreement with the United States. The US 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 like China and India do not currently have the necessary contracts. The E-2 allows international founders to live and work in the United States while investing significant capital to build a business here.

A composite image of immigration attorney Sophie Alcorn against a background with a InNewCL logo.

Photo credit: Joanna Buniak / Sophie Alcorn (opens in new window)

For a founder to qualify for an E-2 visa as an investor or key employee, at least half of the US business must be owned by individuals or corporations from your country of citizenship. That can get complicated for startups after multiple rounds of dilution by US investors. However, if you are forming a subsidiary of an already profitable Colombian company and have no plans to raise VC capital in the US, it might not be a big deal for you. Speak to an attorney to confirm your global corporate structure and fundraising plans.

Although the E-2 requirements do not specify a specific minimum amount of capital that must be invested in the US entity, immigration officers seek large upfront investments in office space, equipment, and inventory, usually in the $100,000 range. Obtaining a pre-seed or Series A round in the US or another country may help streamline this part of your case, but is not essential. Some founders have managed to qualify for an E-2, even with the transfer of valuable intellectual property to their US company.

While the E-2 does not require a US company to create jobs in the future, immigration officials might consider it marginal without job creation, which would not bode well for an E-2 approval. If you already have US employees or have a business plan that involves hiring in the US, this may help in approving your E-2.

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