Introduction: The E-2 Investor Visa offers a pathway for foreign nationals to live and work in the U.S. by owning and operating a business. A critical aspect often misunderstood is the requirement for investment funds to be "irrevocably committed" to the U.S. business, meaning they must be spent on the business and at risk of loss. This is a crucial step, as the U.S. Consular officer will not approve the E-2 visa without it. Below is a summary of the other visa eligibility requirements.
Eligibility Requirements:
Treaty Nationality: Applicants must be nationals of a country with which the U.S. maintains a treaty of commerce and navigation. Check here if your country of nationality is on the list.
Substantial Investment: A significant investment in a bona fide enterprise in the U.S. is required. There is no set threshold dollar amount but the investment must be sufficient to ensure the successful operation of the business.
Business Development and Direction: The investor must have the capacity to develop and direct the business, so you must have the skills and track record to instill confidence that you can run your business successfully.
Real Operating Enterprise: The enterprise must be a real, operating commercial venture. Passive investments do not work here. For instance, simply renting out a vacation home in the U.S. does not fulfill the requirement of an active business enterprise necessary for the E-2 visa application.
Marginality: The business must not be marginal, meaning it must have the capacity to generate more than enough income to provide a minimal living for the investor and their family (aka create jobs and contribute to the U.S. economy).
Return to Home Country: The investor is required to demonstrate an intention to leave the United States upon the expiration or termination of their E-2 visa status. However, maintaining a foreign residence is not a mandatory condition. Compliance with this requirement can be fulfilled by signing a declaration affirming their intent to depart the U.S. at the end of their visa period.
Pros of the E-2 Visa:
Flexibility in Business Choice: Investors have the freedom to choose or establish their type of business.
Family Inclusion: Spouses and unmarried children under 21 can accompany the investor.
Potential for Renewal: The visa can be renewed indefinitely as long as the business remains operational.
Faster Processing Times: Compared to other visa categories, the E-2 often has quicker processing times.
Cons of the E-2 Visa:
No Direct Path to Green Card: The E-2 visa is a non-immigrant visa and does not directly lead to permanent residency.
Investment Risk: Investment Risk: For the E-2 visa, the capital invested must genuinely be at risk. This means the investor needs to show that their funds are actively committed to the enterprise and are subject to loss if the business fails. Merely transferring funds into a U.S. business account does not meet this criterion. The investor is required to make tangible investments in the business, such as securing an office space, purchasing supplies and equipment essential for the business operations, and investing in marketing materials.
Country-Specific Restrictions: Only nationals from treaty countries are eligible. There's over 80 eligible countries but this list changes so it's important to check. Israel was recently added and it's important to note that Ecuador was removed from the list of E-2 treaty countries in 2018. Additionally, some big countries including India, China, Russia and Brazil are not treaty countries. Another important note is that it's nationality that counts here, not country of birth. So an individual born in Brazil but who obtained Canadian citizenship, would be eligible for an E-2 visa as a Canadian national.
Ongoing Compliance: For the duration of its operation under an E-2 visa, the business must consistently adhere to the E-2 visa requirements, which calls for ongoing management and investment. A critical aspect to monitor as the business evolves is maintaining the nationality of the E-2 qualifying business in alignment with the treaty country. This means that if the ownership structure changes in a way that shifts the nationality of the business - such as selling the company to U.S. citizens or Green Card holders - it could jeopardize the E-2 investor's status, as well as that of their family. Therefore, it's essential for E-2 investors to ensure that the business remains majority-owned by nationals of the treaty country to comply with the visa's regulations and safeguard their and their family's immigration status.
Conclusion: The E-2 Visa category offers significant opportunities for foreign investors to enter the U.S. market. However, it requires careful planning, substantial investment, and compliance with specific regulations. Prospective applicants should consult with immigration experts to navigate this complex process successfully.
If you think you qualify for an E-2 visa or you’d like to strategize your U.S. visa options, please be schedule a consultation today. We'd love to help guide you through this process.
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