L-1 Visa vs. E-2 Visa: The Key Differences

The L-1 visa and the E-2 visa have a lot in common, but in many ways they are very different. In this guide I compare these 2 visa options to help you decide whether the L-1 visa or the E-2 visa is the right fit for you.

1A quick introduction to the L-1 visa and the E-2 visa

The L-1 visa and the E-2 visa come with different requirements. In this section I cover the basics of both.

1.1L-1 visa

The L-1 visa is a nonimmigrant visa that lets a foreign company transfer an employee to work for an affiliated US company. To qualify for an L-1 visa, you have to meet several requirements.

1.2L-1 visa requirements

• The foreign company and the US company must be parent and subsidiary, branches or affiliates.

• The transferred employee must have worked full time for the foreign company for one continuous year within the last three years.

• The employee's role at the foreign company must have been executive, managerial or involved specialized knowledge.

• The employee's new role at the US company must be executive, managerial or require specialized knowledge.

1.3E-2 visa

The E-2 visa is a nonimmigrant visa for investors, entrepreneurs and people who want to run a business in the United States. With an E-2 visa you can start a new US company or invest in an existing business.

1.4E-2 visa requirements

• You must be a national of an E-2 treaty country.

• You must intend to leave the US once your E-2 status ends.

• You must make a substantial investment in a US business.

• Your E-2 business must be an active, for-profit enterprise.

• Your E-2 business must not be marginal.

• You must enter the US to direct and develop your E-2 business.

• Your investment funds must come from a lawful source.

• Your investment must be irrevocably committed to the E-2 business and at risk.

2Nonimmigrant visas

The biggest thing the L-1 and E-2 visas have in common is that both are nonimmigrant visas. Both are temporary and neither leads directly to a green card. Although both are time-limited, they can be extended. Later in this guide I cover how long each visa lasts.

Even though the L-1 and E-2 visas don't lead directly to a green card, there are ways to turn both into a green card (permanent residence). Later in this article I explain how.

3Position-based vs. investment-based visa

One of the fundamental differences between the L-1 visa and the E-2 visa is what each visa focuses on.

3.1L-1 visa

With the L-1 visa, the focus is on the job duties of the L-1 beneficiary. In particular, the L-1 visa requires that the L-1 beneficiary (the person applying for the L-1 visa) has worked for a foreign company in an executive, managerial or specialized knowledge position. The L-1 visa also requires that the person applying for the L-1 visa will work for the US company in an executive position or a specialized knowledge position. The L-1 visa has 2 categories: L-1A and L-1B. L-1A is for employees in an executive or managerial position. L-1B is for employees in a specialized knowledge position. The job description determines which visa category you apply for.

At its core, the L-1 visa is about making sure the L-1 employee's duties are genuinely executive or managerial, or involve specialized knowledge.

3.2E-2 visa

The E-2 visa is first and foremost about investing in a US business. Specifically, it requires you to make a substantial investment in a US business.

The Foreign Affairs Manual states: "There is no set dollar figure that constitutes a minimum amount of investment to be considered 'substantial' for E-2 visa purposes" [9 FAM 402.9-6(D)].

Instead, USCIS applies a proportionality test: the amount of money invested compared with the value of the business.

As a general rule of thumb at our firm, at least $100,000 should be invested and at risk in the business. The higher the investment, the better the chance it will be considered substantial.

4Availability by nationality

One of the main differences between the L-1 visa and the E-2 visa is who can get it.

4.1E-2 visa

The E-2 visa is treaty-based and only available to people from certain countries. To qualify, you must be a national of a country that has an E-2 treaty with the United States. Here is a list of E-2 treaty countries. There are many treaty countries, but plenty of countries have no E-2 treaty. Some major countries without one are China, Russia, India and Brazil.

4.2L-1 visa

The L-1 visa is not treaty-based. People of any nationality can apply for the L-1 visa (travel ban issues aside).

5Work authorization

Both the L-1 visa and the E-2 visa allow you to work in the United States.

With an L-1 visa, you can only work for the petitioning company in the US.

With an E-2 visa, you must work for your E-2 business. You can't be a passive investor. As an E-2 investor, you have to be directly involved in building the E-2 business (in other words, actively involved in the company). You may not work for any company other than your E-2 business.

6Work authorization for spouses

With both the L-1 visa and the E-2 visa, your spouse can work in the USA.

The spouse of an L-1 visa holder receives an L-2 visa and, since November 2021, is authorized to work based on L-2 status alone.

The spouse of an E-2 visa holder can also apply for an E-2 visa. Since November 2021, they too are authorized to work based on E-2 status alone and no longer need a separate work permit.

7Visa duration

The E-2 visa and the L-1 visa have different maximum periods of stay.

7.1L-1 visa

For a new office, the first visa is issued for 1 year and can be extended. For an existing office, the L-1 visa is issued for 3 years and can be extended.

For an L-1A visa, the maximum duration is 7 years. For an L-1B visa, the maximum duration is 5 years.

7.2E-2 visa

How long an E-2 visa is valid depends on the treaty between the USA and your country of citizenship. Most E-2 visas are valid for 1 to 5 years.

The E-2 visa can be renewed as long as your E-2 business continues to meet all E-2 requirements. There is no limit on the number of renewals.

7.3Important:

If your E-2 visa is valid for 5 years, that does not mean you can stay in the USA for 5 years without a break. Each time you enter the USA on an E-2 visa, you receive 2 years of status. As long as your E-2 visa is still valid, you can leave the USA and re-enter for another 2 years. This can be confusing, so if you have questions, the best step is to book a consultation.

8Path to a green card

Both the E-2 visa and the L-1 visa are nonimmigrant visas, which means they do not lead directly to a green card. Even so, both the L-1 and the E-2 can be converted into a green card.

8.1From L-1 visa to green card

There are several ways to get from an L-1 visa to a green card. One of the most common routes from the L-1 is the EB-1C immigrant visa category. EB-1C is very similar to the L-1A visa, but differs in a few respects.

Besides EB-1C, another route from the L-1 visa to a green card is an employer-sponsored green card. Read more about the L-1 visa on our L-1 visa page.

8.2From E-2 visa to green card

There are several ways to get from an E-2 visa to a green card. One is the EB-5 visa, an investment-based immigrant visa that lets someone who has invested in a US business apply for a green card. Since March 15, 2022, the minimum EB-5 investment has been $800,000 in targeted employment areas (otherwise $1,050,000). One advantage of moving from an E-2 to an EB-5 is that you may be able to count the amount you have already invested in your E-2 business toward the required EB-5 investment. This is a complex area of immigration law. 

Another route from an E-2 visa to a green card is an employer-sponsored green card. To learn more about moving from an E-2 visa to a green card, read my article on this path.

9New businesses and existing businesses

Both new and existing businesses can apply for an E-2 or L-1 visa, provided all requirements are met.

With the L-1, you can apply for a "new office" L-1 visa if your company has been operating in the USA for less than 1 year. In short, the L-1 visa offers a special option for new offices: it lets a foreign company transfer an employee to the USA to work in a brand-new office. If the US company has been operating for more than a year, the foreign company can also transfer the L-1 beneficiary to the US company (this would then be an L-1 visa for an existing office, the standard L-1 route).

To qualify for the E-2 visa, you can either start a new business or invest in an existing one. Both visas offer excellent opportunities for people who want to start new businesses in the USA.

10What this means for you

The L-1 visa and the E-2 visa are both great ways to come to the USA if you are an entrepreneur, investor or senior manager or executive. They share many advantages and similarities. At the same time, the L-1 and the E-2 differ in some important ways.

You should now have a clearer picture of how these two visas compare. Everything about the E-2 visa is on our E-2 investor visa overview page, and we are happy to work out which option fits your situation in a consultation.

In short

• The L-1 and E-2 are both nonimmigrant visas, temporary and renewable, and both can lead to a green card.
• The L-1 depends on your position and an affiliated company abroad; the E-2 on a substantial investment and a treaty with your country.
• The L-1A lasts seven years at most, the L-1B five; the E-2 can be renewed without limit, with a two-year stay per entry.
• Spouses can work under both visas; the green card route from the L-1 is often EB-1C, from the E-2 frequently EB-5.

How we help you

• Visa Roadmap for Company FormationFormation and visa in one plan, so the company carries the visa.
• Visa RoadmapIn writing: which visa fits you and your family, prepared with the immigration attorney on the firm's team.
• Form a CorporationThe US corporation (Inc) for growth, investors and your visa.
• Visa and Green Card ConsultationWhich route to the USA fits you, settled in one conversation.