Enterline and Partners recently obtained an approval for a Philippine client based on his investment of US$70,000 into a new business in the United States. This is a relatively small investment for an E-2 Treaty Investor visa and demonstrates that a “totality of the evidence and the business” is very important in whether an E-2 investor can obtain the visa.
The E-2 Treaty Investor visa is a non-immigrant visa that allows foreign nationals to enter the United States to invest in and manage a business. To qualify for an E-2 visa, the investor must be a citizen of a country that has a treaty of commerce and navigation with the United States, and must make a “substantial investment” in a U.S. enterprise.
Requirements for the E-2 Visa
To be eligible for an E-2 visa, the investor must satisfy the following requirements:
- Citizenship: The investor must be a citizen of a country that has a treaty of commerce and navigation with the United States. A list of eligible countries can be found on the U.S. Department of State website.
- Investment: The investor must have invested or be actively in the process of investing a substantial amount of capital in a U.S. enterprise.
- Marginal Investment: The investment must be more than a marginal investment, meaning that it should be sufficient to ensure the investor’s financial commitment to the success of the enterprise, and it should generate more than just enough income to support the investor and family in the United States.
- Ownership and Control: The investor must own at least 50% of the enterprise and have operational control of the enterprise.
- Business Purpose: The enterprise must be a real and active commercial or entrepreneurial undertaking, producing services or goods for profit. It cannot be a passive investment, such as a stock portfolio or real estate held for investment purposes.
- Ability to Direct and Develop the Business: The investor must be able to demonstrate that he or she has the ability to direct and develop the business to become successful.
- Intent to Depart: The investor must have the intent to depart the U.S. when his or her E-2 visa expires or is terminated.
Substantial Investment Requirement
The “substantial investment” requirement is one of the most important criteria for the E-2 visa. It is intended to ensure that the investor has a significant financial stake in the U.S. enterprise and is committed to its success.
The amount of capital required to make a “substantial investment” varies depending on the nature, size, and location of the enterprise. There is no minimum investment amount set by the U.S. law. The investment must be substantial in relation to the total cost of the enterprise if purchased, or the cost to open and develop a new business. The geographic location of the business is also an important factor as costs may vary considerably from one location to another. Generally, the investment should be large enough to create a viable business that will provide employment and contribute to the U.S. economy within just a few years.
The investment can take many forms, including cash, equipment, inventory, and other tangible assets. It can also include the value of intangible assets such as patents, trademarks, and copyrights. However, the investment cannot be speculative, and it must be at risk, meaning that there is a real possibility of loss if the enterprise fails.
The investor must also demonstrate that the funds used for the investment were obtained from a legitimate source. This can be done by providing financial documents such as tax returns, bank statements, and business records. The investor must also demonstrate that the investment funds were not obtained through illegal means, such as money laundering or the sale of illegal drugs.
The Enterline and Partner’s Client
Many prospective E-2 investors want to set up a business in the U.S. with the intent of going to the U.S. immediately to begin operations. Such a “start-up” business can qualify an E-2 investor for the visa, but will have much higher scrutiny by the interviewing consular officer who will want to ensure that the investor meets the requirements, has made a substantial enough investment, and has the ability to direct and develop a successful business.
In this case, our client had invested US$70,000 with a partner who contributed US$30,000, and with the help of the local partner, began operating the business remotely in the fall of 2020. By the time of his interview, the business had been operating for 15 months and had generated over $200,000 in gross income and employed two U.S. workers. The viability of the business was already proven; it had income to cover its expenses and payroll and even provided some net income to the client. He was eager to be in the U.S. on the E-2 visa to further develop and grow the business.
It is important to note that an E-2 investor is unlikely to be approved for such a low investment in a start-up business, although every situation is different. This example demonstrates the value of operating a business for a period of time before applying for the E-2 visa.
The E-2 Treaty Investor visa is a popular option for foreign nationals who wish to invest in and manage a business in the United States. If you are considering applying for an E-2 visa, it is important to consult with an experienced immigration attorney to determine whether you meet the eligibility criteria and to guide you through the application process.
For more information, contact us at info@enterlinepartners.com and speak with an experienced U.S. immigration lawyer in Ho Chi Minh City, Manila and Taipei.
ENTERLINE & PARTNERS CONSULTING
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Manila, Philippines Office
Tel: +63 917 543 7926
Email: info@enterlinepartners.com
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Copyright 2023. This article is for information purposes only and does not constitute legal advice. This article may be changed with or without notice. The opinions expressed in this article are those of Enterline and Partners only.
