by on Dear Sophie,
We co-founded a startup in Colombia, and we’re looking ahead to our goals for the new year and thinking about opening a sales office in Austin for our U.S. market expansion! 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
Image Credits: Joanna Buniak / Sophie Alcorn
TLDR: No, your startup does not need to work with an immigration attorney to apply for an H-1B visa for your employee—your startup can submit the filing and pay the fees directly to U.S. Citizenship and Immigration Services (USCIS). But I highly recommend consulting an immigration attorney, particularly since USCIS tends to heavily scrutinize startups. An attorney can help you through the process, avoid missteps, and submit a strong visa application on behalf of your employee while staying within your budget—possibly even saving you time and money in the long run. Get our handout, All About H-1Bs, and subscribe to our newsletter for the latest immigration news and our upcoming informational webinars.
Full Ask Sophie™ article:
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, and we have podcasts covering both the E-2 and the L-1A.
Let me start by giving an overview of both the E-2 visa for treaty investors and the L-1A for intracompany transferee executives and managers. The E-2 and L-1A visa applications are heavily scrutinized by immigration officials, so I definitely recommend working with an immigration attorney to present a strong case whatever route you decide to take.
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 these 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 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 any particular minimum capital amount that must be invested into the U.S. entity so you can qualify for a visa, immigration officers look for large, upfront investments in office space, equipment, and inventory, usually in the $100,000 range. Having already received 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, and 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 specifically require any future job creation, immigration officials may consider your U.S. business to be marginal without job creation, which would not bode well for E-2 approval. So, already having U.S. employees or having a business plan that includes hiring them can aid in the approval of your E-2.
Although there’s no limit on the number of times that 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 immigration officials will want to see that you have that and 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 nonimmigrant category, and 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; 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 approval of the L-1A visa. Even though the work has changed with more and 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. After that, 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 7 years in total.
L-1 visas are specifically 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 an E-2, the L-1A approval notice from USCIS can easily be used for a “stamping” appointment at a U.S. consulate (which perhaps doesn’t even have to be in your home country).
Pros and cons
To make it easier for you to weigh the advantages and disadvantages of both the E-2 and the L-1A based on your situation, here’s a side-by-side comparison:
| E-2 Visa for Treaty Investors | L-1A Visa for Executive Transferees |
| The Advantages | |
| • You can bring your spouse and children under the age of 21 with you.
• A dependent spouse is eligible for an employment authorization document (EAD). • You can apply for an E-2 at any time. • Eligible for premium processing if filed through a change of status in the United States, which means that for a fee, U.S. Citizenship and Immigration Services (USCIS) will make a decision on your application or issue a request for evidence within 15 days. • Although the E-2 is granted in 2-year increments, there is no maximum on the number of extensions. • Employees who are citizens of the same treaty country as you are also eligible for an E-2 visa without prior work experience at your company abroad. • The E-2 does not require you to have an existing company outside of the U.S. • There is no requirement of having worked at least 1 year out of the last 3 years at an entity abroad. |
• You can bring your spouse and children under the age of 21 with you.
• A dependent spouse is eligible for an employment authorization document (EAD). • You can apply for an L-1A at any time. • Eligible for premium processing, which means that for a fee, U.S. Citizenship and Immigration Services (USCIS) will make a decision on your application or issue a request for evidence within 15 days. • Your country of citizenship does not impact the L-1A visa. • You can raise capital in the U.S. for your startup without worrying about maintaining majority ownership by citizens of your home country. • Does not require a minimum investment when opening an office in the U.S. • L-1A is a dual intent visa, which means that even though it’s a non-immigrant (temporary) visa, L-1A holders can pursue permanent residency (green card) in the U.S. and do not have to demonstrate to immigration officials that they will eventually return to their home country. • You might also qualify for an EB-1C green card for multinational managers and executives. |
| The Disadvantages | |
| • You can only work for your startup.
• Heightened scrutiny of E-2 applications. • Retaining the E-2 will be difficult if you are seeking U.S. investors for your startup because the E-2 requires that at least half of your U.S. business be owned by people or companies that share your country of citizenship. • Requires a “substantial” investment, usually around at least $100,000. • If your business is struggling, an E-2 renewal is usually denied. |
• You can only work for your startup.
• Heightened scrutiny of L-1A applications. • You must have worked for your company in your home country for at least one year out of the last 3 years. • The maximum stay is 7 years. |
There are many options: Please do also consider the O-1A for extraordinary ability for startup founders. Best wishes for a fruitful outcome for your U.S. immigration journey and market expansion!
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