HOW MUCH DOES IT TAKE TO QUALIFY FOR AN E2 INVESTOR VISA?
As a foreign investor, before filing a petition to establish a new business venture, or purchase a pre-existing business in the U.S., you must first consider your E2 visa investment amount along with other requirements. E-2 treaty investor visas are nonimmigrant visas reserved for foreign entrepreneurs of countries that have a Treaty of Trade and Commerce with the U.S. This visa enables the foreign investor to be self-employed and develop or carry out the investment/ trade activities of the business. The only question is, how much should one invest for an E-2 visa?
Your E-2 visa investment amount is required to be substantial and irrevocably committed to the enterprise. “Irrevocably committed” means you’d be at risk for loss if your business venture was unsuccessful. Many E-2 holders have their capital tied to the physical premises of the enterprise or in an escrow in order to prove that they and their funds are committed to the endeavor.
The U.S. government regulations do not quantify what is considered substantial for an E-2 visa investment amount, so there is neither an official minimum nor a maximum. However, the E-2 visa minimum investment is unofficially recognized as $100,000 or more. Anything below $100,000 is difficult to get approved, and you must show that your making progress towards operational readiness at the time of the application. Moreover, the percentage of investment for a low-cost business enterprise must be higher than the percentage of investment in a high-cost enterprise.
Even though an E-2 visa investment amount isn’t quantified, USCIS does define both an investment and a substantial amount of capital.
According to the USCIS, an investment is “the treaty investor’s placing of capital, including funds and/or other assets, at risk in the commercial sense with the objective of generating a profit. The capital must be subject to partial or total loss if the investment fails. The treaty investor must show that the funds have not been obtained, directly or indirectly, from criminal activity.”
The term substantial capital can be defined as an investment that is:
Significant as it relates to the entire purchasing price of a business that has already been established or the price of establishing a new business.
Enough to ensure that the investor is irrevocably committed to the success of the business.
Enough to substantiate the idea that the investor will be able to enhance and operate the business so that it will be a positive impact on the U.S. economy. The amount of investment should correlate to the cost of the endeavor. This means that the higher the price of the business, the more capital must be invested in order to qualify.
To qualify as an E-2 investor, you must show that you will develop and direct the investment enterprise by demonstrating ownership of at least 50 percent of the enterprise. Also, the E-2 visa investment amount cannot be marginal and must be projected to make an economic impact. The return on your investment can’t simply provide for yourself and family, it must make a meaningful contribution to the American economy. The economic impact usually measures changes in business revenue, business profits, personal wages, and/or jobs.
Many E-2 visa applicants choose to invest in a business that has already been established by purchasing the business. Generally, in these cases, the required investment amount would be the price of purchasing the business. However, because many businesses are worth a considerable amount, a certain amount of financing may be allowed.
When it comes to financing your investment, it usually comes down to the Consular Officer’s discretion. There aren’t official guidelines to how much of your investment can be financed, but it tends to scale with the size of the investment.
Under normal circumstances, if you are purchasing a multi-million dollar business, you may be permitted to finance up to 50% of the investment purchasing price. However, in most cases where investors are purchasing smaller businesses, 30% may be considered too much financing.
It is also important that you present an active investment plan to the Consular Officer. This means that you must be actively managing and working within the business soon after you enter the U.S. in order for your application to be accepted.
The enterprise should also be almost operational when you file your application. Many applicants buy land in hopes of developing it under E-2 status. Unfortunately, many of these are denied because the enterprise is not close to being operational. Therefore the investment may be considered passive.
Again, $100,000 is not the official benchmark for the E-2 visa investment amount. The E-2 application guidelines from USCIS are somewhat vague and have no specific minimum amount. However, going by what we’ve seen in E-2 visa adjudication, investing anything less than $100,000 may reduce your chances of acquiring the visa, as that may be viewed as not enough to make a substantial impact on the U.S. economy.
However, you may still qualify with a lower amount provided the proposed capital can meet all the financial needs for starting and maintaining the business. For instance, while a manufacturing company may need hundreds of thousands of dollars, an I.T. startup firm may need substantially less capital. There have been some instances where applications have been approved with as little as $70,000.
The most important thing is to provide enough evidence to demonstrate that the proposed amount is sufficient for the enterprise.
The U.S. government will ask about the source of the money you want to invest in its economy. It is not enough to show you have the funds. You must be able to demonstrate that the funds are yours. These could be your savings, a gift from a relative, or even a commercial loan. The most important thing is being able to trace it to a legitimate source.
The enterprise you are investing in or purchasing needs to create employment for U.S. citizens. Although the E-2 business is not required to create a particular number of jobs like the requirement for the EB-5 green card, you will still need to show that the business is or will be viable enough to create jobs for Americans.
This is because every E-2 enterprise owner must demonstrate that their business is not “marginal.” In other words, the enterprise is not being operated solely to provide for the needs of the owner and his or her relatives.
One of the ways to prove this is job creation. Keep in mind that the E-2 visa does not have dual intent, meaning it doesn’t lead to a green card. To maintain your visa and continue running your business, you need to file for renewals as often as you want to continue living in the U.S. And one critical requirement for getting your status renewed is to demonstrate your business growth with evidence of job creation. From the onset, it is recommended, but not necessarily required, that your E-2 business idea fulfills the following:
It can create and sustain a minimum of five jobs within five years.
It will be viable enough to make an income that is enough to pay workers’ salaries and also meet your personal needs.
It will grow within the next five years and be able to generate profits based on industry standards.
During your initial application, providing a comprehensive plan that demonstrates those projections should suffice. However, when it is time to renew your status in the future, you will need more than just projections, you will need concrete proof.
This is why all these questions must be solved at the outset. You can also improve your chances of initial visa approval by showing evidence of your intent to hire workers. A good way of demonstrating this is to have already hired an American worker or have verifiable job advertisements online for one or two important positions the business needs in the initial stage.
Having a comprehensive business plan is crucial to your E-2 visa approval. In fact, after your investment amount, this is the next most important thing to take seriously. The recommended business plan for the E-2 visa should be different from the generic ones. It must follow a particular format that will help prove your eligibility for the visa. So, the best thing is to work with a professional to help you with this. A well-prepared E-2 business plan will not only boost your chances of approval significantly, but it will also reduce the chances of being issued an RFE.
If you’re going to be investing $900,000 or $1.8 million or more, you may want to consider becoming a permanent resident in order to better manage your investment in the long term. AnEB-5 investor green card grants permanent residency to a foreign investor that invests either $1,000,000 in any U.S. enterprise or $500,000 in a U.S. enterprise in a rural or underemployed area and also grants residency to immediate family.