Which One Should I Choose? A Comparison of EB-5 and L-1A/EB-1C

By Charlie Cai

With the current EB-5 visa backlog dating back to September 2013, Chinese investors and entrepreneurs have begun looking for the most suitable avenue to obtain permanent residence in the United States. Although EB-5 is still the preferred program for Chinese investors, more and more are considering alternative choices. A popular alternative to the EB-5 is to obtain an L-1A work visa first, and then attempt to obtain an EB-1C green card. However, the EB-5 Program still remains the leading choice because of the benefits the program can provide to its applicants. The purpose of this article is to strengthen Chinese investors’ understanding of EB-5 and L-1A/EB-1C by comparing key factors of each, and presenting the advantages of the EB-5 Program.

Understanding the Core Elements of EB-5 and L-1A/EB-1C

Core Elements of EB-5

 EB-5 is based on the three following core elements:

  1. The immigrant’s investment of $500,000 to one million USD;
  2. A new commercial enterprise established as the direct investment or as a project within the regional center model;
  3. The creation of at least ten full-time jobs for a period of at least two years.[1]

The EB-5 Program is procedurally structured into two stages: the Form I-526 petition for conditional permanent residence, and the Form I-829 petition to remove conditions.

As most Chinese EB-5 applicants invest in regional center projects, they are expected to submit evidence of the following two critical requirements to the U.S. Citizenship and Immigration Services (USCIS) at the I-526 stage:

  1. As an immigrant investor, the Chinese investor has invested lawfully obtained capital in a new commercial enterprise associated with the regional center that will create at least ten direct or indirect full-time jobs; and
  2. The regional center has been approved by the USCIS.

Within 90 days prior to the two-year mark of the investor obtaining conditional permanent residence, the Chinese investor will need to satisfy the following two requirements in order to receive his or her green card:

  1. The Chinese’s investor’s $500,000 investment was sustained in the new commercial enterprise associated with the regional center and its project; and
  2. The new commercial enterprise or the regional center project that the Chinese investor invested in created ten full-time jobs.

Core Elements of L-1A and EB-1C

L-1A is based on two core elements. The U.S. employer must have a qualifying relationship with a foreign company and currently be, or will be, conducting business as an employer in the United States and in at least one other country directly for the duration of the L-1A executive or manager’s stay in the United States.

The L-1A beneficiary must have been working for the qualifying employer outside the United States for one continuous year, within the three years directly before his or her admission to the United States. The beneficiary should be seeking to enter the United States to work in an executive or managerial capacity for the U.S. employer.

If the Chinese investor who applies for L-1A plans to be an executive or manager for a new office or branch of the U.S. employer, the U.S. employer must prove they can ensure an adequate place of business to accommodate the new office.

The requirements for EB-1C are very similar to L-1A with one critical difference. Unlike L-1A, in which the executive or manager may come to the United States to work in a newly-established office, the Chinese investor may only qualify as an EB-1C executive or manager if he or she will be employed by a U.S. Petitioner/employer that has already been doing business for at least one year preceding the petition.

Immigration Benefits of EB-5 vs. L-1A/EB-1C

Both EB-5 and L-1A/EB-1C visas have appealing benefits. In order for the Chinese investor to make an informed decision on whether to obtain a green card through EB-5 or L-1A/EB-1C, they should first understand the costs and benefits of each option. It is important to note that, as an EB-5 investor, the Chinese investor will receive immigrant status and benefits (albeit with conditions) upon approval of the I-526 and completion of consular processing or adjustment of status. On the other hand, prior to being approved by USCIS as an EB-1C executive or manager and obtaining permanent resident status, the Chinese investor will only be admitted in the United States on a non-immigrant work visa. This is because most Chinese investors who choose to obtain a green card through EB-1C first arrive in the United States using an L-1A non-immigrant status before filing their EB-1C petitions; and EB-5 investors arrive in the United States with legal immigrant status. This article will compare benefits conferred between EB-5 and L-1A.

Advantages of EB-5:

  1. EB-5 investors and their family members may enter and leave the United States more freely than L-1A beneficiaries.
  2. EB-5 investors and their family members may stay in the United States indefinitely, and are not limited by the term of a non-immigrant visa.
  3. EB-5 investors may travel to foreign countries more easily.
  4. EB-5 investors and their family members are eligible to work for any company and receive the benefits of that company within the United States or abroad.
  5. EB-5 investors and their family members may freely relocate and change employment without any visa restrictions.
  6. EB-5 investors’ children may attend free public schools at all grade levels.
  7. EB-5 investors and their family members may apply for U.S. citizenship.
    1. EB-5 investors and their family members may petition for close relatives to become U.S. permanent residents.

Advantages of L-1A:

  1. The L-1A U.S. Petitioners are not required to meet the minimum investment amount or job creation requirements.
  2. The U.S. Petitioners and the L-1A beneficiaries are not required to prove lawful source of funds.
  3. Average processing time of the L-1A Petition is shorter than that of the EB-5.
  4. L-1A beneficiaries and their family members may enter the United States within a month after the approval of the L-1A Petition.
  5. L-1A beneficiaries and their family members may enter and leave the United States freely during the term of the L-1A visa.
  6. L-1A beneficiaries may legally work in the United States, but only if they are employed by U.S. petitioners.
  7. Spouses of L-1A beneficiaries may lawfully work in the United States during the term of the L-1A visa.
  8. Children of L-1A beneficiaries may lawfully attend U.S. public schools for primary and secondary education during the term of the L-1A visa.
  9. L-1A beneficiaries may petition for a green card through EB-1C, and if approved, the green card   will be immediately available to the L-1A beneficiaries and their family members.

EB-5 benefits likely outweigh L-1A benefits for those who are looking to permanently reside and work in the United States for many investors. Specifically, EB-5 benefits are better in terms of travel, education, employment, and long-term opportunities. Firstly, as permanent residents, EB-5 investors may travel to several other countries, including Canada and Mexico, without requiring any additional travel visas. Unlike L-1A beneficiaries, who may only enter the United States with a valid L-1A visa, EB-5 investors may also travel back and forth between the United States and China as long as they hold a valid green card. EB-5 investors are not subject to temporary one to three year visa terms like L-1A beneficiaries.

Secondly, long-term education benefits for EB-5 investors exceed benefits received by L-1A beneficiaries. At the primary and secondary levels, children of EB-5 investors may receive free public education (they may also attend for-profit private schools).  Many families apply for immigration when their children are very young in order to provide good education and better opportunities for them, and the benefits of permanent residency may extend from kindergarten to high school graduation. Children of L-1A beneficiaries are limited to a maximum of seven years of educational benefits deriving from L-2 status. If the L-1A beneficiary fails to extend the L-1A visa or fails to obtain an EB-1C green card, their children are no longer eligible to receive public education in the United States. The child’s status can indeed be replaced by F-1 student status, but L-1A beneficiaries and their children will be subject to substantial costs and burden. Tuition costs for F-1 high school students may well-exceed $120,000 per year in the United States. Additionally, being away from the love and care of family by remaining in the United States could substantially harm the well-being of the children and put them at unnecessary risk. This may however depend on the dynamics of individual families, and the cases cited here may not necessarily be representative of the norm. However, in a traditional Chinese sense, family involvement in a student’s life remains a crucial, powerful, and positive influence. One study shows that, of the surveyed mainland Chinese parents, 96.7 percent checked their children’s homework on a daily basis, 36.7 percent communicated daily with their children on school-related issues, and all of them signed their children up for extracurricular education[2]. This data indicates that the family often plays a very intimate and important role in the growth of the children in China.

Additionally, children of EB-5 investors save big on tuition money as in-state students of prestigious public universities. For example, if EB-5 investors and their families are California residents, his or her children will have a higher chance of being accepted into the University of California – Berkeley, the No. 1 ranked public university in the United States[3] and the University of California, Los Angeles, the No. 2 ranked public university in the United States [4] and they will qualify for in-state tuition. Upon graduation, in-state students at UC-Berkeley save at least $24,024[5] annually or $96,096 USD over four years, and in-state students at UCLA save at least $24,708[6]  annually or $98,832 over four years. If these children decide to pursue graduate or Ph.D degrees, the tuition savings will skyrocket. Furthermore, graduating from such world-famous universities will provide them with incredible employment opportunities and the potential for a brighter future.

EB-5 investors and their family members also have more employment opportunities than L-1A beneficiaries, since they have job market mobility. On the other hand, L-1A beneficiaries must work for the U.S. Petitioner in order to maintain lawful status in the United States for themselves and their family members. In addition, as permanent residents, children of EB-5 investors who later graduate from college do not need to worry about competing in the H-1B lottery for employment opportunities after graduation. For example, USCIS selected only 85,000 H-1B applications out of 233,000 (a mere 36.5 percent acceptance rate) in April 2015[7].

Finally, the EB-5 program provides broad long-term immigration benefits for its investors. To put it simply, the $500,000 EB-5 investment is a key that opens up opportunities for the EB-5 investor and his or her spouse and children, but it also opens up opportunities for the EB-5 investor’s extended family. As permanent residents or U.S. citizens, the EB-5 investors may petition for parents, fiancé(e)s, spouses, children, and siblings to immigrate to the United States[8].

Reasons why EB-5 is the Better Choice for Most Chinese Investors  

Now that we know EB-5 benefits greatly outweigh L-1A benefits for those seeking a permanent home in the United States, let us analyze the risks of each in obtaining a green card. In this section, we will analyze seven factors: (1) intent; (2) success rate; (3) consistency and predictability; (4) amount of investment and return of investment; (5) qualifications of Chinese investors; (6) personal and business realities of Chinese investors; and (7) the program timeline. Through an analysis and balancing of these factors, we discover that EB-5 is a more reliable and secure avenue towards permanent residency.

Intent is Critical

Whether EB-5 or L-1A/EB-1C is more suitable for Chinese investors largely depends on their intent. For most Chinese investors the primary intent is driven by personal desires, including providing their family members with education, living, and employment opportunities in the United States. As evidenced from USCIS’s May 2013 Policy Memorandum, the “EB-5 Program is based on our nation’s interest in promoting the immigration of people who invest their capital….” That is, the focus of EB-5 is to help Chinese investors contribute in their own way to the United States.

Unlike EB-5, L-1A and EB-1C are mainly used to “help eliminate problems now faced by American companies having offices abroad in transferring key personnel freely within the organization.”[9] Therefore, the original intent of the statute was to help U.S. businesses. Depending upon the company, it is fairly easy for an American company within the United States to provide the individual executive or manager with a U.S. work visa or green card. If Chinese investors cannot prove that they are needed in the United States to help oversee or manage a U.S. company’s ongoing business, then they will most likely not qualify for L-1A or EB-1C. Provided that most Chinese investors’ primary intent to immigrate to the U.S. is not to abandon their successful ventures in China, EB-5 is a perfect fit.

EB-5 has a Higher Success Rate

During the 2015 fiscal year, EB-5 continued to maintain a high I-526 and I-829 success rate. From October 2014 to June 2015, USCIS approved 6,498 I-526 petitions and only denied 663 petitions[10]. During the same period, USCIS approved 606 I-829 petitions and only denied 5 petitions[11]. The I-526’s approval rate was 90.7 percent  and I-829’s approval rate was 99.2 percent.

Unlike EB-5 data, USCIS has not publicly disclosed L-1A and EB-1C data. However, it may be inferred from the number of non-precedent decisions published by USCIS Administrative Appeals Office (“AAO”) and from the low approval rates of L-1B petitions from October 2014 to March 2015 that L-1A and EB-1C approval rates are most likely lower than EB-5 approval rates. In 2015, there were 151 AAO non-precedent decisions related to L-1A and L-1B[12], and there were 70 AAO non-precedent decisions related to EB-1C[13]. From October 2014 to March 2015, USCIS approved 4,706 L-1B petitions and denied 1912 petitions[14], such that approval rate is only at 71.1 percent.

EB-5 Adjudications have Greater Consistency and Predictability

EB-5 adjudication has matured over the years and possesses consistency. This is evidenced by EB-5’s high approval rate, substantial number of new and pending I-526 and I-829 petitions (to the point of causing visa retrogression), and USCIS’s numerous stakeholder meetings and policy memoranda. In addition to the aforementioned approval rate, data shows 2,473 new and 13,117 pending I-526 petitions[15], as well as 765 new and 4,007 pending I-829 petitions[16] between April and June 2015. As a result of this continuous overflow of immigrant investors, USCIS has a plentiful amount of petitions to refine its EB-5 adjudicatory standards. In contrast, the above information demonstrates that there are comparatively less L-1A and EB-1C petitions and contain greater unpredictability in adjudication, increasing the possibility of disputes over legal materials and/or presented facts.

Additionally, the scope of EB-5 adjudication review is much more focused than L-1A and EB-1C adjudications. I-526 adjudications concentrate on (1) lawful source and path of Chinese investors’ funds, and (2) compliance of regional center and project documents with law and policy. If the project proves to be exemplar, then that greatly reduces the risk in the I-526 adjudication by eliminating any regional center or project-related issues.

On the contrary, L-1A and EB-1C cases are reviewed based on the totality of the circumstances. In short, USCIS will review documents related to the U.S. petitioner, the Chinese parent, subsidiary, or affiliate company, and the individual qualifications of the L-1A or EB-1C executive or manager. There is a higher chance that USCIS may request for evidence or deny the petition given the broad scope of such review and the substantial volume of evidence provided.

Amount of Investment and Return of Investment

A common argument in support of L-1A and EB-1C is that initial investment may be less than $500,000. To be sure, L-1A and EB-1C petitions involving less than $500,000 in initial capital have been approved; however, there is no guarantee that every Chinese investor may obtain a green card through EB-1C when the start-up or acquisition cost is less than that. In fact, if the U.S. company is not self-sustaining, it may very well require regular capital infusion from its Chinese counterpart or individual owners. Such capital amount may quickly exceed $500,000. If the Chinese investor is contributing such capital to his or her L-1A or EB-1C related company, there is a high risk that such capital will not be returned to the Chinese investor. In EB-5, the risks on return of investment, including when and how much of the Chinese investor’s principal may be returned, is much easier to predict, control, and mitigate.

EB-5 Qualifications are Easier for Chinese Investors to Satisfy

More Chinese investors are able to qualify for EB-5 than L-1A or EB-1C. As previously mentioned, EB-5 focuses on the lawful source and path of the Chinese investor’s funds. As long as the Chinese investor can prove that his or her funds are lawful; the investment capital was sustained; and ten full-time jobs were created, then the Chinese investor will most likely obtain a green card[17]. Unlike L-1A and EB-1C, EB-5 does not require that the Chinese investor be employed. This means that students, mothers and fathers who stay at home to take care of their children, retired persons, and other Chinese investors who would not qualify under L-1A and EB-1C would still be able to obtain green cards using EB-5.

EB-5 Better Suits the Personal and Business Realities of Chinese Investors

Even if a Chinese investor meets the executive or manager legal requirements of L-1A and EB-1C, he or she may still prefer EB-5 because it is convenient and less risky. By investing in a regional center project, Chinese investors take passive and limited roles in the oversight and management of the project, delegating and relying on the expertise of the regional center and its affiliates. Operational and managerial risks are reduced to a minimum as long as Chinese investors invest in the right projects.

In contrast, L-1A and EB-1C executives or managers are expected to oversee the overall or day-to-day business of the U.S. Petitioner. As a result, the Chinese investor assumes greater risk and responsibility. Furthermore, by dedicating substantial time and efforts in the United States, the Chinese investor will incur substantial costs and risks in ensuring that his or her businesses in China continue to run smoothly and profitably. Therefore, EB-5 remains the more solid option for Chinese investors.

Naturally, L-1A and EB-1C may be more advantageous for a small number of Chinese investors. For Chinese investors who oversee or manage a successful foreign company and are genuinely committed to the growth of the related U.S. company, L-1A and EB-1C may be more attuned to the Chinese investor’s personal and business objectives.

EB-5 May Be a Faster Route to Permanent Residency

Generally, it will take less time to obtain a green card through EB-5 than EB-1C. Currently, it takes approximately two years to receive a conditional green card through EB-5 starting from the I-526 date of approval. Normally, it will take longer than two years to obtain a green card through EB-1C, detailed as follows:

  • Month 1: File L-1A Petition.
  • Month 3: Enter the United States as an L-1A executive or manager.
  • Month 15: File L-1A extension.
  • Month 16: L-1A is extended.
  • Month 18: File EB-1C Petition.
  • Month 26-30: Receive EB-1C approval.

Therefore, EB-5 is slightly quicker than EB-1C, and as mentioned, contains far less risk.


In conclusion, EB-5 inherently possesses more benefits and less risk than L-1A or EB-1C and is much better positioned to serve the personal and entrepreneurial needs of Chinese investors. With that being said, Chinese investors who filed their EB-5 petitions or are waiting for visa quota to open up may consider coming to the United States in L-1A status in the interim. For more information, please consult an immigration attorney.

As the co-founder of the Cai and Cai Law Firm, Charlie Cai is licensed to practice in both Washington and New York State, and he obtained his Doctorate in Law at the Emory University. He specializes in immigrant and non-immigrant legal affairs, including EB-5 immigrant investors, green card applications for EB-1C multinational company managers, and H-1B vocational visa application. Fluent in Chinese and English, Attorney Cai has provided high-quality legal services for many clients.

[3] California residents make up 65.6% of the students offered freshman admission at UC Berkeley. See http://news.berkeley.edu/2015/07/02/berkeley-admits-more-than-13000-prospective-freshmen/. 

[4] California residents make up 69.1% of the students offered freshman admission at UCLA. See http://www.admissions.ucla.edu/prospect/adm_fr/Frosh_Prof14.htm.

[7] http://www.uscis.gov/news/alerts/uscis-completes-h-1b-cap-random-selection-process-fy-2016.

[8] Please note, U.S. citizens may petition for certain family members to receive a green card that permanent residents may not petition for. For details on who you may petition for, see http://www.uscis.gov/family/family-us-citizens and http://www.uscis.gov/family/family-green-card-holders-permanent-residents

[9] H.R. Rep. No. 91-851 (1970), reprinted in 1970 U.S.C.C.A.N. 2750, 2754, 1970 WL 5815 (Leg. Hist.).

[15] See Footnote 11.

[16] See Footnote 12.

[17] To be sure, the Chinese investor and family members will also need to satisfy other relevant laws and requirements, such as Securities Law, Immigration Law, Criminal Law, etc.

Charlie Cai

Charlie Cai