Are you an entrepreneur/business looking to expand/move to the United States?
Do you want to start your own business and “set up shop” in the U.S.?
If you answered “yes” to one of these questions, and you’re from a qualifying E-2 country, the E-2 investor visa may be for you. Read on to learn more about the E-2 visa requirements, benefits, and drawbacks, and see if it could be a good fit for you!
At McEntee Law we’ve helped so many clients successfully get E-2 visas. And while not all cases get the same results, and past results are not a guarantee of future success, we can count on 1 hand, maybe even 1 finger, the number of our E-2 visas clients that have been denied in the 12+ years our firm has been in business.
In this blog post, we will discuss:
- What is the E-2 visa?
- What are the E-2 visa requirements?
- How do I show that the U.S. business, and any E-2 applicant, has the nationality of the same treaty country?
- How much of the U.S. business needs to be owned by treaty nationals?
- How much money needs to be invested to get an E-2 visa?
- How do I show the investment is at risk and irrevocably committed to the E-2 business?
- What type of business qualifies for an E-2 visa?
- How do I show that the E-2 business is not “marginal”?
- What role do I need to have if I’m the owner of an E-2 business?
- Can I get an E-2 visa as an employee of an E-2 company?
- How do I apply for an E-2 visa?
- How long is the E-2 visa granted for?
- Can my family come with me on the E-2 visa?
- Can I go from an E-2 visa to a green card?
- What are the advantages of the E-2 visa?
- Are there any disadvantages of the E-2 visa?
- Is the E-2 visa a good option for startups?
- How do I know if the E-2 visa is my best option?
What is the E-2 visa?
The E-2 visa – known as the “investor visa” – allows entrepreneurs (and employees) from treaty countries (like Canada, South Korea, Japan, the Philippines, Ireland, UK, Turkey, Spain, Australia, and many more) to come to the U.S. if there is an investment in a new or pre-existing business.
Assuming all requirements are met, the investor can be an individual, but it could also be another business – e.g. a parent company outside the U.S. sets up a subsidiary in the U.S. and invests into that – and individuals can then apply for E-2 visas as employees of that company.
What are the E-2 visa requirements?
The main requirements of the E-2 visa are as follows:
- The U.S. business, and any E-2 applicant, has the nationality of the same country that has an E-2 treaty with the U.S.
- The business is at least 50% owned, or potentially controlled, by individuals from the treaty country.
- There has been a substantial amount of lawfully gained capital invested into a new or existing business in the U.S.
- The investment is irrevocably committed to the E-2 business and the funds are at-risk.
- The business is an active, for-profit business enterprise.
- The business is not marginal.
- If you’re the owner, you must be coming to direct and develop the business. If you’re an employee, you must be coming as an executive, manager, or someone with essential skills.
We will discuss each of these E-2 visa requirements in detail below.
How do I show that the U.S. business, and any E-2 applicant, has the nationality of the same treaty country?
The U.S. business and any E-2 visa applicant must share the same nationality and the country must be on the E-2 treaty list.
The nationality of a business is determined by the nationality of who owns that business. This means that if the U.S. business is owned by an individual, we look to their nationality. If the U.S. business is owned by a foreign business, we look to see who ultimately owns that business.
We must be able to show that the U.S. business is majority owned/controlled by citizens of the treaty country.
You can see a full list of E-2 countries HERE.
Keep in mind that if you’re not a current citizen of an E-2 country, it may be possible to invest to get citizenship of an E-2 country (like Turkey, Grenada) and use that citizenship to apply for an E-2 visa.
How much of the U.S. business needs to be owned by treaty nationals to get an E-2 visa?
The treaty investor, whether it’s an individual or a company, must own at least 50% of the U.S. business. For simplicity purposes, we encourage the investor to have 51%+ ownership.
It may be possible to get an E-2 visa with the treaty investor having operational control but less than 50% ownership, but this is complicated and would require detailed legal analysis.
How much money do I need to invest to get an E-2 visa? How much is “substantial”?
The law requires the investor to make a “substantial” investment in the U.S. business. However, there is no minimum amount/threshold specified in the law to be considered “substantial”.
With that being said, we generally suggest an investment of least $100,000 – $150,000 USD, depending on the industry/nature of the business.
You also must be able to show that the original source of the funds was lawful so make sure you’re able to explain, and document, where the investment funds came from originally (i.e. income, inheritance, sale of property etc.)
How do I show my investment is at risk and irrevocably committed to the E-2 business?
The investment must be “at risk” meaning subject to either partial or complete loss. If the business fails, how much of the investment would be lost? How much have you already spent and how much has already been committed for future spending (like monthly commitments for a 12-month lease)?
You must have already committed/invested your funds into the business before you apply for your E-2 visa. Intent to invest in the future will not qualify for the E-2 visa. Additionally, just putting the money into the E-2 business bank account will likely not be enough. The U.S. government will want to see that at least some (significant) portion of this has been spent towards legitimate business expenses.
It may be possible to show irrevocable commitment where the investment has been put into an escrow account to be released solely on the approval of the E-2 visa. We would typically see escrow agreements if the E-2 visa applicant is purchasing an existing business and, in this case, the funds/purchase price would be held in escrow and transferred from escrow agent to the seller if/when E-2 visa is approved.
What type of business qualifies for an E-2 visa? How do I show that the E-2 business is an active, for-profit enterprise?
To qualify for an E-2 visa, you must provide evidence that you are investing in a bona fide business. A bona fide business is “a real, active commercial or entrepreneurial undertaking which produces services or goods for profit,” or, in other words, a real functioning business.
We typically contrast the idea of a real, active business against a passive investment like one in real estate- for example, the purchase of a condo that will be rented out. This type of investment is unlikely to qualify for an E-2 visa because, while it is an investment, it is not an active business.
To prove you are investing in a bona fide business, you can submit notice of assignment of an Employer Identification Number from the IRS, tax returns, quarterly wage reports, business organizational charts, business licenses, bank statements, contracts, and lease agreements. This is not an exhaustive list, and your attorney can discuss documentation that would be suitable for your E-2 business.
How do I show that the E-2 business is not “marginal”?
E-2 visas cannot be approved for businesses that are marginal.
A marginal business is one that does not have the present or future capacity to generate enough income to provide more than a minimal living for the E-2 visa holder and their family.
The U.S. will not grant you an E-2 visa just to come here to earn a living for yourself and your family. Essentially this means that you must be able to show that the E-2 business can, or will in the future, have a positive economic impact and create some jobs. This doesn’t mean that you have to create dozens of jobs – there have been many E-2 visas approved for those who have created a handful of jobs in the U.S.
If you’re buying an existing business, you can provide W-2s, tax returns, quarterly reports etc. to show the business has current employees and therefore not marginal.
If you’re setting up a new E-2 business and you have not yet hired anyone, you should be prepared to provide a business plan that outlines the financial and hiring projections over the next few years. The business plan should be detailed, and while of course it outlines future projections, they should be as accurate as possible and supported by strong data and other evidence.
What role do I need to have if I’m the owner of an E-2 business?
If you’re the owner of the business, you must be coming to the U.S. to develop and direct the business.
We generally demonstrate this by showing that you own at least 50% of the business or you have operational control through a managerial position or other mechanism.
It’s also important to show that you will be able to run the business and to illustrate this, we outline your experience and qualifications that will set you up for success in running the business in the U.S.
Can I get an E-2 visa as an employee of an E-2 company?
Yes, employees with nationality of the same treaty country can potentially apply for an E-2 visa if the business meets the E-2 requirements.
Unlike the L-1 visa, there is no requirement that the individual have worked with the investor, or a related business, outside the U.S. before but we must be able to show that they are coming into the U.S. to work in an executive or managerial role or that they have skills that are essential to the U.S. business. Executive or managerial roles can be documented with job descriptions and organizational charts. You can prove essential skills by describing how the applicant’s skills are very beneficial to the U.S. business and how they are not readily available in the U.S. market.
How do I apply for an E-2 visa?
People generally apply for an E-2 visa directly through a U.S. Embassy/Consulate abroad. However, if you are in the U.S. in valid status, it may be possible to apply for E-2 status through the U.S. Citizenship and Immigration Services (USCIS).
Assessing which option is best requires an individualized analysis and your attorney should be able to explain the pros/cons of applying at an Embassy/Consulate versus applying here with the USCIS.
How long is the E-2 visa granted for?
The approval period of an E-2 visa stamp varies, depending on reciprocity with the treaty country. Generally, we see E-2 visa stamps issued for a 2 year or 5 year period but it could be as short as a few months.
It’s important to note that when you enter the U.S. with a valid E-2 visa stamp, you should be admitted for a 2-year period each time.
It’s critical that E-2 visa holders check their I-94 record every time they re-enter the U.S. and you can do so HERE. You should make sure to never stay beyond the expiration date of your I-94.
As far as extending or renewing E-2 visa/status, in theory, they can be extended indefinitely, assuming the business and the applicant continue to meet all requirements.
Can my family come with me on the E-2 visa?
Yes, your spouse, and children under 21, can come to the U.S. with you on dependent E-2 visas.
Your spouse is also eligible to work independently on their E-2 visa. Your children can go to school, but they are not eligible to work on their E-2 visa.
Can I go from an E-2 visa to a green card?
Currently there is no direct path from E-2 visa to green card and, despite a lot of lobbying from stakeholders, there is no green card version of the E-2 visa.
However, it may still be possible to pursue a green card depending on the specifics. We have successfully transitioned E-2 visa holders to EB-1A green cards, PERM/recruitment green cards, marriage-based green cards etc.
In theory, the E-2 visa requires you to intent to depart the U.S. once your E-2 status is terminated but in practice, as we all know, plans and intentions can change.
If your ultimate goal is green card, you should discuss this with an experienced attorney so they can advise you on whether the E-2 visa is the best fit for you.
What are the advantages of the E-2 visa?
E-2 visas can be renewed indefinitely, assuming the business continues to meet the requirements. This is definitely an advantage compared to some other visas that have a maximum time limit, e.g. 7 years total on an L-1A visa.
You also may be able to get a 5-year E-2 visa stamp – but remember the 2 year admission/I-94 on entry – which would give you a lot of time to work in the business.
E-2 businesses who have established the E-2 requirements may be able to submit a truncated E-2 application for each subsequent employee which reduces the burden, and potentially the timeline, involved.
Finally, E-2 spouses can work independently of the E-2 business which is a huge plus.
Are there any disadvantages of the E-2 visa?
Yes, the E-2 visa does have some drawbacks/disadvantages.
Firstly, the E-2 visa is available only to nationals from treaty countries. In addition, the E-2 visa is valid only for as long as the treaty remains in place. For example, the E-2 treaty with Bolivia ended recently.
In addition, an E-2 visa holder can only work for the specific E-2 business, so the entrepreneur may be limited in opening/working for other businesses.
Another potential downside is long and uncertain processing times. E-2 applications filed at Embassies/Consulates cannot be premium processed/expedited, so it can take longer to get an adjudication compared to other petition-based work visas (like an L-1 visa or O-1 visa) that are filed through the USCIS in the U.S. The pandemic has also severely impacted E-2 processing times at Embassies/Consulates and the processing times can vary widely depending on the post.
Finally, as mentioned above, the E-2 visa – unlike the L-1A – does not have a straightforward path to permanent residency, so if your ultimate goal is to get a green card, that is something to consider.
Is the E-2 visa good for startups?
The E-2 visa may not be the best option for startups, but it really depends on the specifics of the case. As mentioned initially, generally the U.S. business must be 50% owned by treaty nationals.
In our experience, startups tend to raise capital from outside investors (like venture capital funds) and this results in the dilution of shares on the cap table. If the ownership of the U.S. company goes below the 50% treaty owner threshold, this may invalidate any E-2 visas issued to that company and its employees.
If you have a startup and you foresee raising capital and diluting the ownership, we recommend that you discuss this in detail from the outset so your attorney can advise you on this.
We have a lot of experience advising startups on E-2 visa, and other immigration options, and we would be happy to chat with you to see if the E-2 visa makes sense. Please feel free to call our office on 773-828-9544 or you can book a consultation
How do I know if the E-2 visa is my best option?
The E-2 visa may be a great option for you, however there are a lot of things to consider before deciding if this is the *best* option for you.
An experienced immigration attorney can help you weigh up the pros and cons of this option and compare those to any other immigration options you may have.
Many times, clients have come to us looking for an E-2 visa only to learn that there may be a better fit for them. The opposite can also be true – people may think an is their best bet but, if a spouse working is important, other options like the E-2 visa may suit them better.
The bottom line is determining your best visa option is an individualized analysis. Online research (like reading this blog) can be a great starting point for you, but it’s not a substitute for getting individualized legal advice from an experienced attorney.
We have years of experience working with investors, entrepreneurs, and startups just like you. We’re confident that we can provide you with the specific advice you need.
If you’d like to schedule a consultation to discuss the E-2 visa and any other options you may have, you can do so