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. E2 treaty investor visas are non-immigrant 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 E2 visa?
In this article, we’ll explore specific E2 visa investment amounts as well as other fundamental elements in the visa process. If you have additional questions it’s best to consult a qualified immigration attorney who can examine the details of your individual case and then help direct you as to the most appropriate course of action.
How Much to Invest for an E2 Visa Investment Amount?
Your E2 visa investment amount is required to be substantial and irrevocably committed to the enterprise. Irrevocably committed means that you’d be at a risk for loss if your business venture was unsuccessful. Many E2 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 E2 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 the 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.
Some of the evidence you may submit to demonstrate that your investment is substantial and irrevocably committed to the enterprise includes:
- Canceled money orders and/or checks
- Corresponding personal and/or business bank statements
- Itemized list of goods and materials purchased for the start-up
- Corresponding financial accounting documentation
- Lease agreement
- Term Sheet, Letter of Intent, or Memorandum of Understanding
- Bill of sale
- Escrow documents
- Loan and/or mortgage agreements
- Capitalization table
- Valuation analysis of business assets
- Purchase agreement for business assets
- Valuation analysis of stock
- Stock purchase agreement, accompanied by:
- Meeting minutes
- Stock ledger
- Stock certificate
- Corresponding forms of payment for stock
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 E2 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.
Financing Your Investment
Many E2 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.
Here is a hypothetical example. Harold is interested in buying a successful chain of local restaurants worth $1.5 million, but only has an E2 investment amount of $500,000. He chooses to purchase the business by obtaining a financed loan of $1 million. In this case, the Consular Officer will likely choose to reject Harold’s E2 application because his investment amount was too small and the financing amount was 66%.
Active vs Passive Investment
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.
Here is another illustrative example. Hector wants to buy a gas station that has two attendants and a janitor with no real room or potential for growth. Hector’s application has a high probability of being denied because he will not be actively involved with the activity of the gas station.
The enterprise should also be almost operational when you file your application. Many applicants who buy land in hopes of developing it under E2 status. Unfortunately, many of these are denied because the enterprise is not close to being operational and therefore the investment may be considered passive.
E-2 Treaty Investor Conditions of Status
It’s noteworthy to point out that as part of the terms and conditions of E-2 status, a treaty investor can only work in the activity that they were approved to at the time of classification. On the other hand, an E-2 employee has the added benefit of being able to work for the treaty organization’s parent company or subsidiary. For this to occur there must be:
- A formal relationship established between the organizations
- The subsidiary employment must require executive, supervisory or other essential skills
- The conditions of employment must remain the same (unchanged)
Want to Become a Permanent Resident?
If you’re going to be investing $500,000 or more in capital, you may want to consider becoming a permanent resident in order to better manage your investment in the long term. Fortunately, the E2 visa is considered a “dual intent” visa, meaning that you can seek permanent residency while under E2 status.
An EB-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.
In order to qualify under the EB-5 category, foreign investors must:
- Invest $1 million in either a new or existing U.S. business or commercial enterprise that will create at least 10 full-time U.S. jobs, or
- Invest $500,000 in a new or existing U.S. business or commercial enterprise that is in either a rural area or an area with a high unemployment rate, or
- Invest in a U.S. government designated Regional Center, and
- Prove that the investment will somehow benefit the U.S. economy
Recap: E2 Visa Investment Amount
To summarize, there are some key requirements that must be met in order to qualify and apply for an E2 Visa. One of the most significant of these requirements is that your investment must be for a bona fide enterprise and not marginal, meaning that it will create “more than enough income to provide a minimal living for you and your family” or “to make a significant economic contribution”. Review the aforementioned points once more and if you have additional questions please feel free to contact our E2 Visa lawyers.
How an E2 Attorney Can Help
No matter what course of action you take in immigration law, it is always a good idea to have a qualified attorney helping you along the way. This can help you avoid delays and costly mistakes.
Our experienced E2 immigration attorneys have been helping investors come to the U.S. under the E2 visa for years. We will help you file your petition according to the regulations set by the USCIS and Department of State. To get in touch with one of our expert lawyers, you can complete this contact form to schedule your comprehensive consultation.