By: Lisette Lavergne, Esq.
Do I need $1 million to Invest in the U.S. as an E2 visa Investor?
No! If you want to establish a small business or purchase a franchise in the U.S. with less than $1 million dollars then you might want to consider the E2 investor visa as an excellent option. E2 visas are based on bilateral commercial treaties between the U.S. and over 75 treaty countries. Foreign investors from the designated treaty countries are able to operate a business of their choosing in the U.S. without a set minimum investment requirement. E2 visa holders have an exceptional growth opportunity to expand their business into the U.S. market without having to create a set number of jobs.
What are the Requirements to obtain an E2 Visa?
The E2 visa investor must be a national of a treaty country that maintains treaties of navigation and commerce with the U.S. It is possible to satisfy the nationality requirement as a dual citizen, so long as the E2 investor chooses to apply for the E2 visa with his or her nationality from the treaty country. For example, E2 visa dual citizen investors from Brazil and Venezuela choose their Italian or Spanish nationality for their E2 visa investment.
The E2 visa investor may be an individual, a corporation, joint venture, or partnership. If the foreign investor is the principal investor rather than an employee of the business, then he or she must enter the U.S. solely to “develop and direct” the enterprise. The principal investor, either an individual or business entity must control the business as demonstrated by ownership of at least 50% of the business. Control of the business may also be shown by “possessing operational control through a managerial position or other corporate device, or by other means” showing the principal investor controls the enterprise. If the applicant is not the principal investor, he or she must be employed in a supervisory, executive, or highly specialized skill capacity. Additionally, the foreign investor must make a substantial investment in a bona fide enterprise in the United States.
What qualifies as a Substantial Investment?
A substantial investment is an investment that is not marginal. The marginality requirement is a subjective test assessing whether the business has the present or future capacity to generate significantly greater income than the income necessary to support the foreign investor and his or her family. Further, the investment must be sufficient to ensure the viability and successful operation of the business. The E2 visa holder must have control of the funds and an investment that is at risk in the commercial sense. It is important to analyze the legitimate source of the funds, including whether the business has secured or unsecured loans.
What type of business qualifies as an E2 investment?
Many different types of businesses qualify as E2 visa investments depending on the foreign investor’s particular industry and must be analyzed on a case by case basis. E2 visa investors may invest in an existing business, a small business start-up or a franchise. Investing in a franchise is an excellent option for E2 visa investors. Franchises tend to be well established business operations that provide training and support for the investor. Franchises tend to be familiar brands and business models for immigration purposes. Regardless of the type of investment, it is essential to make a viable investment with earning potential. The investment must be proportional to the amount required to establish the business. Foreign investors must provide strong evidence of financial records, business plans that display the organization’s projected growth for 5 years and projected income while accepting the risk of the new venture.
What are some advantages of the E2 Visa?
A major advantage of the E2 visa is that the Foreign Investor may be accompanied by his or her spouse and child under under 21 years of age. Spouses of E2 visa holders may obtain work authorization and children may attend U.S. schools. E2 visas are generally granted for an initial two or five-year period with the possibility of obtaining unlimited two year extensions. This can lead to a significant impact on economic growth.
Partnerships are forged between treaty countries and the U.S. with the inclusion of professional service providers such as business plan writers, immigration and corporate lawyers, financial advisors, and tax accountants to develop a viable business venture inside the U.S. Expansion and stimulating the economy are at the heart of the advantages of globalization for organizations with Treaty Investor (E2) visa holders.