Increasing popularity of E-2 visa.
Nationals of E2 Treaty Investor visa countries who have made a significant investment in the United States may qualify for E-2 Visa status. US Department of State’s statistics show that E-2 visa issuance was gradually increasing within last 4 years. This category noted a sharp rise from about 35,000 in 2013, to more than 44,000 in 2016. Unquestionable leaders of E-2 visa approved applications are nationals of Japan (13,609), while Germany is the greatest recipient of E-2 (4,329) visas in Europe. A high approval rate (over 90%) makes E-2 visa category very attractive for potential investors. Please visit https://partovilawllc.com/e-2-visas/ to check the general eligibility criteria for E-2 visa.
President Trump’s immigration reform plans bring uncertainty to many nonimmigrant visa categories, like H-1B and J-1, however E-2 visa is very beneficial to the US economy and we predict that as such it should remain intact. Under supported by the president “merit based” immigration bill, foreign nationals who are financially self-sufficient and who will invest a significant amount of money in a new enterprise, would be among most welcome visitors. As this visa category has big chances to become more and more popular among foreign nationals who want to live and earn money in the US, we would like to explain what are advantages of this particular visa category, and how to prepare a successful visa application.
First of all, the processing is very short in comparison with other employment based nonimmigrant visa procedures. You apply for a visa directly at the US Consulate in your home country, without filing any petition with the USCIS. Accordingly, the cost is much lower because no USCIS filing fees are required.
Second, once you are in the US in E-2 status, you may extend it in increments of two years – as long as you run the established business in the US. There is no limit on how many times an E-2 investor can extend his stay, so theoretically you could legally remain in the U.S. under E-2 status indefinitely. On the other hand, E-2 visa is not a “dual intent” visa (like H-1B or L-1), so it does not provide any path to legal permanent residence in the US.
Third, spouses and children of E-2 investor may obtain derivative E-2 visa classification, and spouses are eligible for work authorization in the US.
Fourth, there is no set minimum level of investment which may qualify you for E2 Visa Treaty Investor status, so there is a certain room for flexibility depending on type of business you want to run in the US. It is important to keep in mind that E-2 regulations do not require the E-2 enterprise to be a large business that hires dozens of workers. This visa is also available for small businesses that have only a few employees and do not plan on growing beyond that.
However, your investment must be “substantial”, with investment funds or assets committed and irrevocable. Most E-2 visa denials are based on the fact that the investment 1) is not substantial, 2) is not active, or 3) is marginal. Let’s examine these criteria and present how to avoid unfavorable findings.
1) The consular officers apply proportionality test in making their decision about substantiality of investment. The amount already invested in the enterprise must be compared to the cost (value) of the business. The lower is the cost of the business, the higher a percentage of investment is required. Just the opposite, a highly expensive business (like opening a factory) would require a lower percentage of qualifying investment. While it is true that it is generally difficult to obtain an E-2 visa with an investment of less than $50,000- $100,000, some forms of investment like services-based business (for example, a travel agency) require less money to commence its operations. In such cases, investor should commit almost entire sum at the very beginning to show that he will be able to start the operations.
If the investor has a strong background of prior successful business operations, even a small numerical investment can qualify him for E-2. To succeed, the applicant should present a solid business plan explaining why this small amount of money is enough to get his/her business up and running, and why a given amount of dollars is "substantial" in relation to the particular type of business he is starting.
2) The investment must be a real operating enterprise, an active commercial or entrepreneurial undertaking, and the investor must be in charge of managing it. If the consular officer comes to the conclusion that investment is not active (for example, buying real estate for rental income), the visa most likely would be denied. The applicant must show that enterprise is producing some service or commodity for profit. Evidence can include sales receipts or invoices, client lists, letters from clients, signed contracts with clients, and photographs of the enterprise. Investing in US franchises that have a strong track record of success is usually safer than creating a new business from scratch and has better chance to meet the requirement of active and real enterprise.
3) Investment is marginal if it does not have the present or future capacity to generate more than a minimal living for the investor and his or her family. In other words, investment cannot be solely to earn a living. An enterprise that does not have the capacity to generate such income can still be approved for E-2 purposes if it has a present or future capacity to make a significant economic contribution. To make a decision about non-marginality, the consular officer will first examine whether income from investment exceeds what is necessary to support the applicant and his family; if the test is not met, he must evaluate applicant’s capacity to make significant economic contribution in the near future.
The simplest way to show the enterprise is not just going to provide household income for the foreign investor, is hiring US workers. While the E-2 regulations do not specifically mention the creation of jobs, the purpose of this visa is to allow an investor to start a business that will have a positive economic impact and expand job opportunities in the U.S. As such, the investor must be able to demonstrate that the proposed enterprise will have the ability to provide places to work for individuals other than the investor’s family members, or will be able to do so in the immediate future.
For investors purchasing an existing business that already has employees and has profit, (or investing in well-known franchise, like UPS store or Baskin-Robbins), non-marginality requirement is easier to establish than in cases where the applicant wants to invest in start-up. An applicant buying the existing enterprise must submit documentation demonstrating company’s profits and expenses, including business tax returns and W-2s issued to employees evidencing their wages. For start-ups, the non-marginality requirement can be satisfied by submitting a credible comprehensive business plan supported by strong evidence that clearly states the projected future earning capacity within five years from the date the foreign national commences business activities of the enterprise. A good business plan should also contain a detailed description of the company’s hiring plan and one, three, and five-year projections for business expenses, sales, gross income and profits or losses.
It is very important to follow the appropriate US Consulate’s guidance in applying for a visa. The paperwork requirements vary from post to post (for example, the US Embassy in Belgium will not accept E visa application that exceeds 40 double sided pages), and while some consulates have special E visa units specializing in processing these applications, at others they are processed together with other nonimmigrant visas which makes the process more time consuming.
If you are interested to know more about E-2 investment-based visa, please give us a call at 703-752-6148 to schedule an appointment and talk about your specific case.
This article is intended solely for information purposes and should in no way be construed as legal advice. If you have any questions or are unclear on any of the subject matters addressed or discussed in this article, please consult a licensed legal professional.