The E-2 Visa for Foreign Investors in the United States

May 14, 2019

The US economy is booming and there has never been a better time to invest in business opportunities in the United States. The E-2 visa is an investor visa based on treaties with designated countries that allows nationals of those countries to come invest in companies in the US or to work for a US company that has benefitted from investment from those designated countries. Israel has recently been added to the list of treaty countries whose nationals may benefit from this visa and in response Israel has instituted its own reciprocal investor visa for US citizens. The E-2 visa has many advantages for investors and their employees from qualifying countries, allowing a potentially unlimited stay in the US for the E-2 visa holder and family members, a relatively flexible and expedited application process, and certain tax advantages when compared to US permanent residence.

 

General E-2 Visa Requirements

The E-2 visa requires a substantial investment in the US by a national of the treaty country, or an entity that shares that country’s nationality, usually a company that is majority-owned by nationals of the treaty country. The investment is often in a US subsidiary or affiliate of a parent company in the treaty country, but this is not a requirement. The US investment may be an entirely new, stand-alone US enterprise. The investment must also be “substantial”, and though there is no set minimum amount, the investment must be clearly sufficient to successfully launch the investment enterprise and to justify the investor’s transfer to the US to manage it. The US enterprise must also not be “marginal”, which means it must have the present or future capacity to generate employment beyond supporting the investor and his or her family in the US. The marginality and substantial investment requirements have become more stringent in recent years, and practically speaking usually require an investment of at least 100,000 to 150,000 USD and an existing business or a detailed business plan justifying the employment of several full-time employees in addition to the investor. These requirements are vague and subjective, unfortunately, and when applying, extensive documentation should be provided to show the business’s viability and employment generation. Such documentation can include bank account statements, payroll records, contracts, etc. and/or a detailed, comprehensive business plan, if the business is new. The Trump administration’s adjudication policies have become more stringent and may vary from consulate to consulate. To find out whether or not you qualify for an E-2 visa, consult with an experienced attorney.

 

Substantial Investment, Marginality, and the Business Plan

For investments in established businesses with large payrolls, the substantial investment and marginality criteria should not be difficult to meet if appropriate documentation is provided. For new business ventures, however, the business plan is the key to success. The business plan must be detailed and grounded in objectively verifiable evidence, such as market research, financial projections, existing client contracts, or previous similar successful ventures that provide a clear road map to success for the new US business. Whenever possible the E-2 investor must show that significant funds have already been irrevocably committed to the venture, in the form of receipts, money transfers, and invoices showing the necessary funds have already been spent on laying the groundwork for the business. Some investors may hesitate to spend significant sums of money on a future business in the US without the assurance that their E-2 visa will be approved. Unfortunately, however, current adjudication policies indicate that substantial funds must be committed to back up the intention to execute the business plan before the visa can be approved. Simply showing the funds are available to execute the business plan is generally insufficient. In addition, a professional business plan consultant, preferably one familiar with the requirements of E-2 visas, is also highly recommended, not only to improve the chances of approval of the E-2 visa but also to ensure the investor’s business has the best possible plan for success in the United States.

 

E-2 Visa Application Procedures

The E-2 visa allows for an expedited application process that does not require a prior approved visa petition from the U.S. immigration service (USCIS) before the visa can be obtained at the US consulate abroad. The applicant can file the E-2 visa application directly with the consulate, usually in their home country. Procedures, processing times, and documentation requirements vary widely by consulate, and it is important to check the particular consulate’s requirements. Most consulates require the application to be submitted first and then inform the applicant when they have reviewed the application and when the applicant may schedule the visa interview appointment. The consulate may instruct the applicant to provide additional documentation of visa eligibility before the interview appointment can be scheduled. In rare cases the applicant may schedule the visa interview appointment immediately upon submitting the application as long the required window of time to allow for the review of the application is respected. For help regarding the interview process, it is best to seek the help of an immigration attorney. Spouses and children may apply with the primary investor to obtain dependent E-2 visas to allow them to accompany the primary applicant to the US. Once the first E-2 visa is approved for the qualifying company most consulates allow later E-2 visa applicants who will work at the same company to apply without having to resubmit all the company documentation. Employees who are not the primary investor or director of the company must also be nationals of the treaty country and be either high-level supervisors or employees with key skills that are essential to the US business.

 

Even under the current administration’s stringent adjudication requirements, the E-2 visa remains a valuable and flexible tool for foreign investors, their employees, and their family members. The E-2 visa stamp in the passport is generally valid for up to five years and the E-2 visa holder is generally admitted to the US for two years at a time. The visa holder can continue to extend their E-2 status for an unlimited amount of time, as long as the employment with the qualifying E-2 company lasts. Spouses of the E-2 visa holder are eligible to apply for a work permit. Although it may be extended indefinitely, the E-2 visa does not normally lead to permanent residency (also called a “green card”) and the visa holder may not be subject to US taxes if they are not in the US year-round and do not establish US tax residency.

 

For nationals of countries that benefit from an E-2 visa treaty, the E-2 visa is a flexible and relatively fast visa option for investing in the United States. Please see the updated list of E-2 visa countries and consult with an immigration attorney to determine whether an E-2 visa is the best option for foreign entrepreneurs, businesses, and investors interested in exploiting investment opportunities in the United States.

 

For more information regarding E-2 visas or to request a free consultation, click here

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Contact marketing@jiaesq.com for more information or to seek permission to reproduce content. This blog is intended for general information purposes only. It does not constitute legal advice. The reader should consult with knowledgeable legal counsel to determine how applicable laws apply to specific facts and situations. Blog posts are based on the most current information at the time they are written. Since it is possible that the laws or other circumstances may have changed since publication, please call us to discuss any action you may be considering as a result of reading this blog.  

 

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