An E-2 or “treaty investor” visa is a non-immigrant visa that allows a foreign investor to live and work in the United States through a relatively quick process. The investor must be from a country with an established treaty agreement with the United States and must intend to come to the United States to manage and develop their business venture. The bona fide business must be viable and the visa recipient must have an active role in the venture. This visa is an excellent opportunity for investors seeking to capitalize on a United States enterprise.
The visa allows the investor and their family to live in the United States so it is also an excellent opportunity for investors with family members who wish to study and work in the U.S.. Spouses of a visa holder may apply for employment authorization and attain gainful employment in the United States in any field -this is a great advantage other non-immigrant (H1-B and TN visas) visas don’t have. In addition, children who enroll in school do not need to apply for a separate student visa and within two years living within a state, students at a college or university can benefit from in-state tuition.
Flexibility to travel abroad and readmission to the United States
Unlimited 2-5 years visa extensions
Family visa and permissions to work and attend to US schools
Relatively quick approval time
No exact investment amount required
Possibility to sponsor employees from the same nationality
May avoid worldwide income taxation
LCR works with business plan writers, trusted immigration attorneys and companies that can help you identify the right franchise depending on your need. These are the steps:
Submit application and apply for interview
In Person interview & application directly at a US consulate
Visa issuance and travel to the US
E-2 investors are required to create a highly detailed business plan. The plan should include a detailed financial summary of the investment funds and how they will be allocated. The investor should include actionable goals and steps to attain those goals. A detailed plan will show the officer the business is being set up for success. Other components of the business plan may include a 5-year business plan, an analysis of competitors, and a timeline for hiring employees.
Purchase a Franchise
Many foreign investors find franchises an excellent option for an E-2 visa business venture. Franchises provide the training and framework needed for the business’s success and this support is crucial when moving to the United States: one caveat of the E-2 visa is that it is contingent on having a viable business. If the business fails, the E-2 investor and his/her family may lose their status and have to leave the United States. Franchises are excellent for this reason. A franchise already reached a certain level of stability and has a clearer path towards success. They also have a strong business plan and marketing strategies in place.
The tax obligation for E-2 investors depends largely on the “substantial presence test.” This test determines if the investor is considered a resident or a non-resident of the United States; it has no consequence on the investor’s immigration status and only determines their tax status and it. Generally, the substantial presence test calculates residency based on the number of days the visa holder was present in the United States. It calculates whether the E-2 visa holder was present for at least 30 days in the current year and a minimum of 183 days over three years.
If the investor passes the substantial presence test, the investor is considered a resident and is subject to tax on worldwide income. If the test determines the E-2 visa holder is a non-tax resident, they will only be taxed on United States sourced income and not on worldwide income. The substantial presence test is complex and should be calculated by a professional.
Grenada is a Caribbean island that has an E-2 treaty signed with the U.S. and offers a Citizenship by Investment Program. It also allows dual citizenship and it can be an option for citizens interested in applying for the E-2 visa but do not hold a passport from an E-2 country. In less than one year, you can apply for the Grenada Citizenship By Investment (CBI) program and then purchase or start a business in the US, taking residency in America.
Know more about the Grenada Citizenship By Investment program here.
The applicant must be a citizen or national of a country the United States maintains a treaty of commerce and navigation with (Birth citizenship from the treaty country is not a requirement). For a complete list of the U.S. Department of State Treaty Countries click here.
E-2 applicants must intend to come to the United States solely to “develop and direct the operations of an enterprise.” Meeting this requirement is extremely important and it is also relatively easy. It is sufficient to simply state your intention to the immigration officer at the visa interview. For some countries, a signed letter may be required but this is not the norm. An oral statement should be enough to satisfy this requirement.
Unlike other non-immigrant visas, treaty investors are not required to have a residence or home in the country of citizenship as proof you will not abandon the country. E-2 applicants may sell their assets in their treaty country and move all personal property to the United States.
E-2 investors with pending immigration petitions must tell the officer they do not intend to adjust in the United States. They must state their intention to return to the United States when their E-2 authorization expires. They must intend to complete their adjustment processing in their home country.
The nature and source of the funds is an important consideration for E-2 eligibility. The source of the funds used for the investment must come from a legal and legitimate avenue. The funds may be from an inheritance, gifts, or winnings. The inheritance of a business does not qualify as an investment for E-2 eligibility. Instead, selling the inherited business and using those funds to start another business may be a legitimate source of funds for an E-2 visa.
A substantial monetary investment is required for E-2 visa eligibility. An E-2 visa applicant must have invested or is in the process of investing a substantial amount of capital in a viable and legitimate enterprise. A non-profit organization does not qualify. A “substantial amount of capital” is not clearly defined but the amount must be substantial in relation to the total cost of the business venture. A bona fide investment of as low as $50,000-$100,000 may be enough to qualify for an E-2 visa. The higher the investment, the better probability of having the visa granted. Unlike the EB-5 that requires 500K in investment, there is no set amount needed to invest in an E-2 visa.
An E-2 investor must be in control of the funds and of the process of investing. The investment must be valid and “irrevocable.” The investor cannot get the investment back and the funds are to be already irrevocably committed to the business venture. Having the funds in the bank or having a signed contract alone is not sufficient to prove irrevocability. Allocating the funds in an escrow account may be enough to show irrevocable commitment. Although the release of funds from escrow can not be encumbered with contingencies. The release of funds from escrow after E-2 approval may be acceptable for visa eligibility and may still satisfy the irrevocability standard.
Examples of irrevocable investments include:
The applicant must also be entering the United States with the sole intent to develop and operate the business venture. The applicant must show a 50% ownership or control of the venture. An investor can show this in 2 ways
Proving 50% of operational control can be more challenging than proving 50% ownership. The applicant will need to detail all duties and explain the nature of their control and role in the venture. A job title will not suffice. Applicants will have the task of detailing all job duties in order to prove they partake in 50% or more of operational duties. The applicant will be responsible for providing the evidence needed to prove 50% ownership or control.
The funds used for investment in the E-2 business venture should implicate a risk to the investor. An investor must use legal and properly sourced funds that can potentially put the investor at a financial loss. The investor must be using these personal funds at a risk with the hope of gaining a financial return.
For example, using a loan secured by the business or assets of the business cannot be counted towards the investment. On the other hand, using a loan collateralized by the investor’s personal assets may be used. The funds of a second mortgage on a home may be used because they entail the personal financial loss of the investor. In this scenario, the investor is risking a loss at the expense of his personal assets. The funds must be at risk of “partial or total loss.” The investor will be asked to provide evidence proving the risk of financial loss.