E-2 Visa Denied | Reasons, Options, Extension Denial

For foreign investors, the E-2 visa is one of the best ways to work in the U.S. through your investment. It’s non-competitive, has a relatively short processing time, and can be extended indefinitely under the right circumstances. However, due to the complicated nature of immigration law, effectively demonstrating your case can be difficult. If you have had your E-2 visa denied or are looking to prevent a denial, here are some common reasons why it happens and how you can avoid it.

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What to Do After Your E-2 Visa is Denied

While having your E-2 visa denied can be a major setback in your immigration plans, there are a few options you can take once you receive that denial letter.

Reapply After Making Significant Changes

This will require you to file a new Form DS-160 petition and make another appointment with the consulate in your home country.

Because the E-2 visa denial letter will tell you why your visa was denied, you will have the opportunity to rectify any issues and reapply once you have made significant changes to your circumstances.

The key takeaway is “significant changes.” While there is no period you should wait before reapplying, you must demonstrate a significant change in circumstances or provide substantial new evidence that directly overcomes the previous refusal. Simply submitting the same application a second time will result in the same denial.

 File an Appeal with the AAO

If you believe that the adjudicating officer’s decision was incorrect and you did not go through consular processing, it may be possible to appeal the decision to a third party called the Administrative Appeals Office (AAO).

While this may seem like a second chance, the AAO has a long history of upholding the decisions of the adjudicating officers. A very small percentage of decisions are overturned or even remanded.

However, if you went through consular processing, your denial letter will most likely state that the consulate’s decision cannot be appealed. The letter will also explain the reason for the denial and guide you on what to fix if you choose the next logical step: reapplying.

Respond to a 221(g) Request for Evidence

If you had your E-2 visa denied through an administrative processing refusal under section 221(g) of the Immigration and Nationality Act, you may still have hope. This kind of refusal is not a complete denial, but rather more of a request for evidence. These are typically issued due to these reasons:

• The documents or information were insufficient
• The officer needs to re-examine the case more closely
• You need to go through more background checks

The consulate will present you with a list of documents or information that needs to be submitted in order to avoid a denial. Think of this refusal as a buffer step before outright denial. Be sure to work with your immigration attorney to take advantage of this step within the given time frame.

Common Reasons for E-2 Visa Denial

If you have already had your E-2 visa denied, then USCIS will enclose the details and reasons for your denial in the letter they sent you. If you are in the process of petitioning for an E-2, here are a few of the top reasons why you may receive a denial.

1. Misunderstanding “Substantial Investment”

There is no magic number for an E-2 investment (for example, $100,000). Rather, the investment is judged by a “proportionality test,” which can be confusing for many applicants.

Proportionality states that your investment must:

1. Be substantial compared to the value of the enterprise or the cost of starting it.
2. Demonstrate that you are committed to the enterprise’s success.
3. Be enough so that it is apparent that you are likely to successfully advance the enterprise.

Example:
Hans wants to invest $150,000 in a convenience store worth $150,000. This is a 100% investment and is considered substantial.

In contrast, if he invested the same $150,000 in a restaurant chain worth $3 million, that $150,000 percentage only constitutes a 5% investment, substantially lower and unlikely to meet the substantial investment requriement.

Applicants often fail because they invest what they think is a lot of money without demonstrating that it represents a very large percentage of the total value or startup cost of their specific enterprise.

2. Business Plan Is Marginal

Many applicants focus on creating a business that can support them and their family. However, this is the very definition of a marginal enterprise, which is grounds for denial.

According to 9 FAM 402.9-6(E), the business must have the “present or future capacity to generate enough income to provide more than a minimal living for the treaty investor and their family.”  It must also show the capacity to make a “significant economic contribution.”

In practice, this means your business plan must aim to hire U.S. workers within a five-year timeframe.

A plan that only shows enough profit to pay your own salary will be seen as you simply buying yourself a job, not making a real investment in the U.S. economy.

Shilpa Malik, VisaNation Managing Attorney

3. Your Investment Isn’t Truly “At Risk”

The risk element is one of the most technical and frequently misunderstood pitfalls. For your investment to count, your money must be subject to partial or total loss if the business fails. Loans and not having your funds are two of the biggest reasons for in this category:

• Not Irrevocably Committed: Simply having funds in a bank account, even a business account, is not enough. You must have spent a significant portion of the money on things like equipment and inventory, or have the funds in an escrow account. A mere intention to invest is a guaranteed denial.
• Loans: The text in 9 FAM 402.9-6(B)(c) is very specific. If you get a loan to fund your business, it only counts as an investment if it’s secured by your own personal assets, like a second mortgage on your home. A loan secured by the business’s assets (e.g., its equipment or property) does not count. Many applicants assume any business loan is part of their investment, leading to denials

4. Lack of “Develop and Direct” Control

The best way to show that you are committed to the successful development of the enterprise is by having at least 50% ownership in the business. Owning 50% or more of the company is the standard for showing control, but the details can trip you up.

As noted in 9 FAM 402.9-6(F)(b), a 50/50 partnership between two people generally works but an equal partnership with more than two partners (such as three partners with 33.3% each) would likely fail because an applicant in this situation would not be seen as having the power to develop and direct the business.

In lieu of this, according to the USCIS, you can also have “operational control through a managerial position or other corporate device.” However, it’s not enough to claim you have control of the business. You must back it up with solid legal documents. This paperwork has to prove, without a doubt, that you are the one running the show. Many applications are rejected because the proof isn’t strong or clear enough.

5. The Business Model Resembles a “Job Shop”

This denial reason is related to the type of business you operate, especially common in consulting and IT staffing. If your business model is to support your employees to fill staff shortages at other U.S. companies, it can be viewed as a “job shop” and denied.

The E-2 enterprise must be providing a unique, project-oriented service or commodity to the U.S. company, not just filling its employee vacancies. The distinction can be blurry, and applicants who don’t clearly define their unique service offering are at risk.

6. The Enterprise is Not Bona Fide

USCIS is interested in making sure that no one takes advantage of the system. If the enterprise does not appear to be a legitimate entity engaged in the trade of goods and/or services under the local law, then you will likely have your E-2 visa denied.

7. Employee Position Does Not Qualify

This requirement is specifically for the employees of E-2 treaty investors. Since an employee would apply to receive an E-2 as well, they are also vulnerable to having their E-2 visa denied. According to the regulations, the employee of an E-2 treaty investor must either:

A. Be in An Executive or Supervisory Role

A “supervisor” or “manager” must primarily manage other employees, make strategic decisions, and have real authority. They shouldn’t be spending most of their time doing the same day-to-day tasks as the people they supposedly manage.

Example Denial:
An applicant is listed as the “Store Manager” for a new retail shop. However, the job description shows they will spend 80% of their time operating the cash register and stocking shelves, and only 20% managing one part-time cashier. This role would be denied because it’s not truly supervisory in nature; it’s a regular worker with a fancy title.

B. Have Special Qualifications That Warrant U.S. Presence

Having special qualifications means that you are essential to the successful operation of the enterprise. You must prove that the employee’s skills are highly unique, not readily available in the U.S. workforce, and crucial for the business’s success. The company must explain why they can’t just hire an American for the job.

Example Denial:
A Japanese robotics company wants to bring over a technician to service its machines, but the visa will likely be denied because a U.S. worker could be trained to do the job.

However, the visa would be approved for the lead engineer who designed the robot’s unique, patented core technology. This is because the engineer’s foundational and proprietary knowledge is considered irreplaceable and essential for overseeing the initial U.S. launch and training the new team.

What is the Denial rate for the E-2 Visa?

The latest E-2 denial data from the U.S. Department of State (FY 2024) reveals a refusal rate is 9.94%. Out of 61,432 visas, 55,324 were approved and 6,108 were denied.

The rate varies year to year depending on the U.S. consulate processing the application and, most importantly, the quality of the business plan and supporting documents.

A well-prepared case has a high chance of success, while a poorly documented or marginal business is very likely to be denied.

Why Would an E-2 Visa Be Denied?

The biggest reason for an E-2 visa denial is failing to demonstrate to USCIS that you or your business meet all of the E-2 eligibility criteria. In short, these include:

1. Being a national from a country that holds a treaty of commerce and navigation with the United States. You do not necessarily need to be currently living there.
2. Investing a substantial amount in a U.S. enterprise. This applies whether you are purchasing an existing business or starting a new one.
3. Your enterprise must not be marginal, meaning that it must be able to support you and your family now or within five years from the date of visa issuance, or have a significant economic impact in the United States.
4. You must be coming to the U.S. with the sole purpose of developing this enterprise. You can demonstrate this by showing that you hold 50% ownership in the enterprise or possession of operational control through a managerial position or other corporate device.
5. You must intend to depart the U.S. when your E-2 status expires.

E-2 Visa Alternatives to Consider

Aside from reapplying, you may want to take a look at some other common pathways to work in the U.S. Work with your immigration attorney to learn if these or any other alternatives would be appropriate for your situation.

H-1B

This visa requires that you have a job offer for a specialty position from a U.S. employer. The main benefit of this visa is that it is a dual intent visa that allows holders to maintain an intent to immigrate to the U.S. through a green card.

EB-5

If getting a green card is your goal, you may want to consider bypassing the nonimmigrant visa step altogether. With an EB-5 green card, your investment can allow you to live permanently in the U.S.

This investment program, however, does have quantified investment requirements. If you are investing in a Targeted Employment Area, you need to invest at least $800,000. For all other cases, the investment amount must be $1,050,000

Why Was My Extension Denied?

If you have had your E-2 extension denied, chances are that you were unable to maintain one of the above requirements. For the most part, the USCIS denies E-2 extensions if they deem that the enterprise has become marginal. You must not only prove that your enterprise has the potential to succeed, but you must also make it succeed in order to remain in the country under E-2 status.

Frequently Asked Questions

Is an E-2 visa hard to get?

Yes, the E-2 visa, relative to other visas, requires the applicant to have significant funding and experience to be able to purchase or launch a business enterprise. Additionally, it requires experience in immigration law to successfully navigate the strict legal requirements. However, if all the requirements are met, the application process is fairly straightforward.

What are the disadvantages of an E2 visa?

Disadvantages of the E-2 Visa includeL

1. No dual intent: the E-2 visa does not have “dual intent,” meaning you must always prove that you intend to return to your home country when your business activities in the U.S. end. This can complicate attempts to apply for a green card later, as you cannot simultaneously have temporary intent and permanent intent
2. Requires substantial risk: Your investment must be “irrevocably committed” and “at risk,” meaning you have to spend a significant amount of money on the business before you are guaranteed to get the visa. If the business fails, you could lose your entire investment.
3. No Direct Path to a Green Card: The E-2 visa itself never turns into a green card. You can renew it as long as the business is running, but you will always be on a temporary status.
4. Country Specific: It is only available to citizens of countries that have a treaty of commerce and navigation with the United States.
5. Tied to the Business: Your legal status in the U.S. is directly tied to the success of your business. If the business fails and closes, you lose your visa status and must leave the country.