This article will explore what makes an investment acceptable for the purposes of the E-2 visa.
General Qualifications of a Treaty Investor
Requirements to be able to qualify for an E-2 visa:
- Be a national of a country with which the United States maintains a treaty of commerce and navigation
- Have invested, or be in the process of investing, a substantial amount of capital in a bona fide company in the United States
- Looking forward to enter the United States exclusively to develop and direct the company. This is accepted by showing at least 50% ownership of the company or possession of operational control (managerial position or other corporate scheme).A substantial amount of capital is:
- An investment is the placing of capital from the national of the country part of the treaty, including funds and/or other assets, at risk (in the commercial sense) with the objective of generating profit. Of course that 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, from criminal activity. See 8 CFR 214.2(e)(12) for more information.
- Substantial in relationship to the total cost of either purchasing an established company or establishing a new one
- Sufficient to ensure the successful operation of the company
- Of an importance to support the probability that the treaty investor will successfully develop and direct the company. A real, active and operating commercial or entrepreneurial undertaking which produces services or goods for profit. It must meet applicable legal requirements for doing business within its jurisdiction.
- A bona fide enterprise is:
Investment: The central point of the E-2 visa
Most of the requirements for an E-2 are relatively self-explanatory, but the focal point is usually the investment. The E-2 has no set investment number, it requires a “substantial investment,” which is open to wide interpretation. It is suggested to show an investment of at least $100,000 to be generally acceptable, but this number doesn’t always make sense for all businesses.
The typical E-2 investment amount will be between $100,000 – $150,000, but recent cases with lesser amounts include: real estate development and construction consulting ($65,000); software application development ($70,000); hair and nail salon shop ($85,000); a bakery ($80,000). The amount of money that needs to be invested is not determined, but it is recommend to invest at least $100,000. The law permits the investment into a new company, but investment and purchase of an existing business has a better chance of passing muster with the US embassy.
Marginal Enterprises
The investment of the company may not be “marginal.” A marginal business is one that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. Depending on the facts, a new business might not be considered marginal even if it lacks the current capacity to generate such income. However, the enterprise should have the capacity to generate such income within five years from the date that the treaty investor’s E-2 classification begins. See 8 CFR 214.2(e)(15).
Conclusion:
A common ingredient to all successful E-2 cases is a detailed Business Plan and explanatory Cover Letter. They will be the immigration officers’ road map, explaining how the investment funds will be used and why they are substantial.
A lawyer specializing in E-2 visas will be able to give the potential investor an understanding if the investment will satisfy immigration regulations. Before investing in and relocating to the U.S., discuss your business plans, professional background, financial situation and immigration goals with an experienced attorney.
All said and explained in this article does not constitute a legal opinion and does not replace legal advice. Responsibility for using the wordings and opinions conveyed in this article relies solely and entirely on the reader.
This article was written by Dotan Cohen Law Offices, working in the field of immigration law in the United States, Canada, Australia and England.
