E2 Visa – Investing in a Franchise (Rupert Law)

Visa Franchise

E2 Visa – Investing in a Franchise (Rupert Law)

Introduction

Welcome. Thank you so much for joining us. Let’s get started. About my law firm, we really focus on E2 Visas. So this is what we do, we work with people all over the world and help them figure out the best way to invest in a business here in the United States. So, one of the main questions that I get is, which comes first? Do I get a business first or do I get the E2 Visa first? And the answer is, you can get a business without an E2, but you cannot get an E2 without a business. So, you’ve got to get the business first. This is key, because they expect the investment to come before you go to the interview.

What is the best business for an E2 visa?

So, which business works best for an E2? Another question I get a lot. Anything that is legal and is for profit. So, no nonprofits, and unfortunately for many, no pot businesses. Because although that is legal in California, it is not legal on a federal level. So, for immigration purposes, it’s not gonna work. But, one thing to consider when choosing a business that is legal and for profit, is your previous work experience, the location and cost, of course, and what are you interested in, and what can you run successfully. Think about those things. It’s much more of an individual choice than what immigration has to say. They are really neutral on that subject.

What is the E2 visa?

E2 Visas are wonderful. As many of you may know, there are a lot of pros to them. They are relatively quick. Sixty to 120 days, I would say, would be a very average time frame for you and your family to get E2 Visas and come and start living in the United States. Smaller investment than the EB5, no minimum number of employees, any industry, as we discussed, is eligible. Spouses and children under 21 can come with the investor, and spouses can work. And you have an indefinite stay in the United States as long as the business keeps running. But there are some cons, unfortunately. Only citizens of certain countries are eligible, children age out at 21, meaning you’re gonna have to either get another type of visa or return to their home country when they turn 21 years old. It will never become a green card and you need to apply every few years, depending on what country you’re from. And the change in ownership or the change in business can be an issue. So, if you used to own 51% and now you own 48%, that could be a problem.

What are the E2 visa requirements?

So, let’s talk briefly about the requirements. You must be from a treaty country. You can look all of those up online, there are about 60 of them. You must have invested or be in the process of investing a substantial amount. The enterprise must be real and operating. It cannot be marginal and you must be able to develop and direct the enterprise, and you must intend to depart the United States after the visa ends, whenever that is.

So, nationality, treaty country. As we mentioned, the United States does not recognize dual citizen. So if you are a dual citizen, you need to come in on the passport from the treaty country you’d like to use and be that citizen during your entire E2 stay. So, you can’t come back and forth if you are, you know…for example, I know Brazilians have dual citizenship a lot, but you can’t come in on a Brazil passport. You need to come in on your Italian passport, what have you.

Size of the E2 visa investment

So, the investment. This is the biggest issue for immigration and it’s the biggest issue for E2 investors, as you may imagine. Immigration is looking at the following aspects. Is the money in your possession? Meaning, is it yours? They want to make sure that risk’s involved. So, if something goes awry with this business, you’re out the money. They want to see that. The capital must be irrevocably committed. Essentially, that means it needs to be spent. There are a couple of minor exceptions, but for the purposes of your thinking and how the E2 works, basically all your money needs to be spent before you can get the E2. And that the investment is substantial. That really has to do with what business you have and the value of the business.

Need to spend the money

We talked a little bit about this, but having money in American bank account and having contracts signed is not gonna work. That’s not enough. They want it further than that. They want those contracts, but they want the money spent. So they want to see canceled checks, they want to see your credit card statement with the charges there, that type of thing. That’s really what they’re looking for. Investment, the money in your possession and control. You need to show the source of money. Where did you get it? The great news is you can it get from any place that’s legal. So almost all of my clients, I would say, have had at least part of it as a gift, meaning their parents gave them money. I actually have a couple of clients now wherein one, their ex wife gave them money, and one, their ex husband gave them money. So, you know, it just needs to be a gift. So, it’s not necessarily a loan. They’re really looking for that. You can get a loan, but it needs to be based on your personal property or collateral. It cannot be based on the business.

What is a substantial investment?

So what is substantial? As we mentioned, there are no mandatory minimums. And substantiality is a very kind of frustrating term because there’s really no definition. But they do a proportionality test. So you really are looking at what you’ve invested and what the value of that business with the cost to run that business is. So, the closer you are to 100, the better. But many people do not get to 100%. So, for instance, if you are running a very small, you know, like, soul cycle in Nebraska, for instance, and it’s $125,000, you probably need to be in 100% there. But if you’re buying a car manufacturing plant and it’s $30 million, you could probably be at $10 million. You’re only at 30%. But it’s a significant amount of money and they will likely see that as substantial. So, it really depends on the business and the location.

How do you prove the investment?

Evidence, this is what they’re looking for. Receipts, contracts, cancelled checks, money coming out of your bank account, your credit card statement with all the charges already there, those are the types of thing they’re looking for. The business must be real and active. So, they want to see that you’re creating a good or service or the business will be creating a good or a service or providing a service. So keep that in mind, just kind of mere investments aren’t going to work. Can I buy a duplex in Nebraska and rent one out, and live in the other? No, that’s not what’s going to work for an E2. Evidence for real and active. They want to see business licenses, they want to see utility bills, they want to see invoices, marketing materials, you know, websites, that type of thing. They want to see, “Hey, this is a real business. It’s going to be up and running as soon as his E2 comes through.”

Marginal Investment

More than marginal. This is where they’re looking to see that you have some employees. There is no minimum number that you need to be at, but they do expect you to hire U.S. citizens or green card holders during the course of the E2 Visa before you renew. And that will be shown, usually, in the business plan. Sometimes you already have employees, which is great.

Direct and develop

They want to make sure that you’re the one in charge of this business. You can have a 50% owner that is a U.S. citizen or some other type of citizen. However, 51% is better because it’s just so easy to show you’re a majority owner, you’re in control.

Procedure, another big question. So, I try to keep the E2 Visa as simple for you as possible. I usually set up Dropboxes online. You put the documents in for each category we just discussed. I send a checklist, you just drop those in. As soon as you get them, I prepare the packet, we send it to the consulate in your home country. You will go there to do a short interview. And then usually at the window, you are either approved or denied. And if you are approved, they take your passport, they stick a U.S. Visa in it, and in about three days later it comes to you in the mail, and on your way to the U.S. you are.

E2 Visa Interview

The interview is a very important part of this process. I train everyone, we do mock interviews, we talk about different issues that may come up, that type of thing. Although the interviews are typically very short, under 10 minutes, they are very important. Sometimes it’s the only time the consular officer really look at your evidence. They will be asking questions that come to them, common sense type questions about your business, and they expect very ready and short answers. So that’s something to really consider.

Change of Status for E2 Visa

Can I go through the USCIS and just change my status? The answer is yes, but I don’t recommend it. I won’t get into all of the craziness of U.S. immigration law, but I will say that if you do that, you do not ever have permission to come back to the U.S. Meaning if you’re here on a B1, B2, you go through USCIS and change your status to an E2 investor and someone, unfortunately, in your family passes away and you need to attend a funeral in any country, leaving the United States, you don’t have permission to come back because you don’t have a visa to enter. So, you have to go through the entire process again at the consulate in whatever country you’re from. So, I always recommend just get that visa the first time and then you don’t have to worry about that.

Family benefits of E2 visa

Family and E2. E2s are great for people with families. Your spouse can come over, get a work permit, and work anywhere he or she wishes. It can be in the business, it can be in another business, it doesn’t matter. Children cannot work, but obviously they can attend school. When they turn 21 though, you will have to find another visa for them. An F1, student visa, is common. And then at the end of that, you’re either going to have to find another type of visa or return to their home country. So, something really to think about in the planning of this E2 if you have children of any age because the day will come, they will turn 21. So, it’s really worth some long term planning now.

Common questions.

Can money be in the bank account while I’m waiting for E2 approval?

No. Having money in a U.S. account is not enough. You need to spend the money before you go to the E2 interview.

What is the minimum I can invest?

Unsatisfyingly, it is only a substantial amount. I always tell people, you’ve got to know that it’s gonna be $100,000 minimum. From there, it really depends on what type of business, the location, the cost, etc. Can I have a U.S. business partner? Of course, as long as they are 50% owner or less. I prefer less, for reasons stated earlier. It’s just easier to show that you have control if you have a 51% ownership.

How can I show the investment?

I actually have one client right now getting ready for his interview next week, and he has an IT consulting business. And that was his question, “How am I going to spend $100,000? I need a computer and internet.” And I said, “I get that, but immigration doesn’t. They expect you to invest the same that you would for any other type of business.” So, you know, getting an office is one. Pay up front for the whole year, your legal fees count. You can build a website, you can put marketing material together, you can advertise for your company, those types of things. So get creative, but understand that even if you have a very cheap business, you still have to do some pretty serious investing. And I just got a lease in an office and I paid a month.

Can I count that, because I have a contract and I’ve already paid?

You can only count what you’ve paid before the interview. So, it’s best to just pay for the whole year, and you can count all of that money toward your investment.

Conclusion

So, this is my contact information. It was also at the bottom of all the slides. And I believe, Patrick, correct me if I’m wrong, that we will have this information available on YouTube and elsewhere afterwards. So, please feel free to reach out, call, e-mail, etc. Happy to answer any questions.

About us


Visa Franchise guides investors in identifying and analyzing the best investment opportunities tailored to their specific objectives.

We are the trusted advisor for foreign nationals who qualify for the E-2, L-1 or EB-5 visa and would like to own a U.S. franchise, with a minimum investment amount of $150,000.

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