Embarking on a journey to grow your business in the United States is an exciting venture for entrepreneurs from treaty countries. One avenue that opens doors to endless possibilities is the E-2 visa investment, a strategic pathway allowing visionary individuals to establish or expand their presence in the U.S. market.
In this blog post, we discuss the details of E-2 visa investment examples, shedding light on various business options, essential criteria, and the undeniable allure of franchises.
Whether you’re considering buying an existing business, delving into consultancy, exploring multinational corporations, or leaning toward the proven success of franchises, this guide will equip you with the knowledge needed to navigate the complexities of the E-2 visa process.
Whether you’re considering buying an existing business, delving into consultancy, exploring multinational corporations, or leaning toward the proven success of franchises, this guide will equip you with the knowledge needed to navigate the complexities of the E-2 visa process.
What is an E-2 Visa?
The E-2 Treaty Investor visa is a golden ticket for foreign nationals from countries with trade agreements with the U.S. It allows you to live and work in the U.S. by investing a substantial amount of capital in a bona fide American business enterprise.
Benefits of E-2 Visa Investment
- Live and Work in the U.S.: Run your business and enjoy the American lifestyle.
- Bring Your Family: Spouses and children under 21 can reside with you.
- Multiple Investment Options: Explore various business ventures including franchises, existing businesses, consultancies, or even working for a multinational corporation.
What counts as an investment for an E-2 visa?
Your enterprise must possess four elements to pass muster with immigration as an E2 visa business venture.
It must be an active commercial enterprise, the investment must be substantial, the funds must be at risk, and you must have majority ownership of the venture. or funds
1. Real and Operating Business
For an E-2 visa investment to be deemed eligible, your enterprise must transcend the realm of theoretical ventures. The business must be a tangible, active commercial entity.
This requires the investment to either be operational at the time of submitting your E2 visa investor form or be ready to launch within a week of your arrival in the U.S.
Having an existing office lease during the application process strengthens your case by demonstrating your commitment to establishing your services and a physical presence.
Possessing the necessary licenses and equipment is crucial.
Your E2 visa venture should not merely exist on paper for tax reasons but should actively provide goods or services.
It is vital to showcase that your venture is not marginal, meaning it must generate sufficient income to support you, and your family, and create employment opportunities for Americans.
Strive to create three to five full-time jobs, projecting a realistic growth trajectory within a couple of years of the E2 business opening. A detailed business strategy is paramount, emphasizing the importance of not mentioning salary forego to save business costs.
2. Substantial Investment
An E-2 business investment is considered substantial when it meets or exceeds a psychological threshold – six figures.
In most cases, U.S. immigration law deems an investment ranging from $100,000 to $150,000 as substantial. Falling below this range significantly jeopardizes the chances of visa approval.
While there are rare instances of E2 visas getting approved with lesser amounts, it is advisable not to take such risks.
A substantial investment, typically in the six-figure range, underscores your commitment, and dedication increases the likelihood of business success.
Considering it from the perspective of the United States Citizenship and Immigration Services (USCIS), an entrepreneur from a treaty country investing $100,000 has more at stake and demonstrates a higher level of commitment compared to someone investing $40,000.
USCIS officials review numerous visa applications, and an investment below the six-figure range, say $50,000, is unlikely to garner the desired approval.
3. At-Risk Capital
The investment must be genuinely at risk, meaning you could lose part or all of it if the business fails. There has to be a chance you would partially or completely lose your substantial amount of capital invested if the business does not go well.
Otherwise, what you have put up fails the investment test. It’s not an investment if it is without risk.
Be careful if you take a Loan out or crowdfund.
Any loans you take out must be minimal because you, not a bank or other lender, must have true skin in the game. Moreover, the loans you do take out should have your assets as collateral, not your business assets.
Some crowdfunding efforts can be interpreted as loans or even as giving away your ownership shares. Do your research and consult professionals if you plan to crowdfund to ensure you do not accidentally sabotage your E2 visa effort.
4. Ownership Proportionality
Ownership plays a pivotal role in the E-2 visa investment criteria. Typically, the E2 investor must be at least a 50 percent owner of the business. The proportionality test comes into play – the lower your investment amount, the closer you should be to a 100 percent owner.
For instance, if you invest $700,000 into a business, you may have flexibility with less than 50 percent ownership. Conversely, with a $100,000 investment, planning to be the sole owner is advisable.
This proportionality test ensures that the level of ownership aligns with the investment amount, reinforcing your commitment and engagement in the business venture.
4 E2 Visa Investment Examples
E-2 visa investment examples include buying an existing business, opening a franchise business, starting a consultancy, or going the multinational corporation route.
Franchise businesses are the most common options.
1. Existing Business Purchase
You can purchase an existing venture such as an independent restaurant, dry cleaners, or resale business. That is one way to qualify for an E2 visa.
The many advantages include the fact that you can easily calculate the investment amount. It’s the purchase price of the business plus related purchase expenses such as legal fees and insurance.
You can also put the money in an escrow bank account subject to E2 visa approval. On the off chance your application is denied, the money is returned to you. An operating business also means an existing clientele/customer base, inventory, location, staff, and more.
If you acquire an existing enterprise that is already profitable, you have an easier time showing USCIS that the business can continue to be successful.
USCIS is less likely to examine your application as closely since the business has already shown itself to do well and has met the “not marginal” requirement.
It’s worth considering buying an existing one instead of building it from scratch. Doing so can benefit not only you and your family but also the employees of the business.
For instance, let’s say you want to open a bookstore with a coffee shop.
Starting from scratch would require the following:
- leasing space,
- purchasing equipment,
- hiring employees,
- buying computers and insurance,
- making property improvements,
- and much more.
On the other hand, if you buy an existing business, all you need to do is deposit the purchase price into an escrow account.
However, it’s important to be careful when considering a business that is losing money, has no employees, or only has a few full-time workers. Such a business may be considered marginal and may not become profitable.
Nonetheless, purchasing an existing business is a good option for those who are risk-averse, especially for potential treaty investors. Starting a business from scratch can be risky, particularly if you invest a significant amount of capital, only to have your E2 investor visa application denied.
By buying an existing business, you can at least recover some of your investment.
E2 visa requirements for existing business investment
- You must own at least 50% of the business. If you’re investing only $100,000, it is better to own all of the business.
- You must plan to operate day-to-day business activities.
- You must show your involvement in the business from day one of arriving in the U.S.
- The business must not be marginal and ideally would be profitable already.
2. Multinational Corporations
Multinational companies sometimes opt for L-category visas to bring employees to the U.S. from overseas offices.
It is possible to obtain an E2 visa if the employee shares a nationality with the majority owner of the company, who must also be from a treaty country.
An E2 visa can be approved as long as the employee is necessary as an executive, supervisor, or manager, or is needed for his or her essential knowledge.
Executives, supervisors, and managers must be at senior levels of the business and either manage the entire company or a critical aspect of it.
Why a nonimmigrant Visa?
The E2 visa in these cases is necessary because the owner of the corporation cannot always spend a long period in the U.S. to operate the business.
Thus, the owner hopes to delegate these duties to the prospective E2 visa holder. The visa application needs to provide documentation such as the employee’s resume and job description and a letter from the employer supporting the necessity of the job.
In the cases of essential knowledge employees, the E2 visa must show that the employee is necessary for running the business (or a certain aspect of the business) and possesses specialized knowledge that would be hard to find in the U.S. worker pool.
An example could be a chef who specializes in cuisine from a home country.
3. Consultancies
Foreign entrepreneurs with special skills and knowledge can consider consultancies as one of the E2 visa investment examples. To obtain an E-2 investor visa, they must present detailed consultancy plans that demonstrate the business’s readiness to start from day one.
Having pre-existing contacts or clients who are ready to hire them in the USA can be a significant advantage.
The business strategy should explain:
- the investor's unique knowledge and skills,
- the source of their investment,
- and establish that the consultancy will not be marginal.
The plan should include financial projections, employee hiring plans, and a roadmap on how the consultancy will grow.
Before applying for the visa, entrepreneurs should have invested a substantial amount of money into their consultancy, such as:
- securing office space,
- having clients lined up,
- purchasing equipment,
- and hiring staff.
This will demonstrate the seriousness of their intent and increase their chances of obtaining the visa.
The consultancy must meet E2 requirements such as:
- being an active enterprise, not marginal,
- the investor having at-risk capital,
- and represents a substantial business investment.
Supporting evidence and documents
Investors must support their application and detailed business plan with facts, not opinions.
That means backing up the reasons you provide for having the ability to operate this type of consultancy. You can use specific skills, educational achievements, and current or past business experience.
To show the amount of money you’re investing in the business, it is not enough to say, “I have committed $150,000,” and to break down the categories, for example, $6,000 in “office space rent.”
Instead, you must show receipts, signed agreements, documentation, canceled checks, and the like in your application.
4. Franchises
If you are considering investing in a business in the US and applying for an E2 visa, franchises are a popular investment option to explore.
Essentially, a franchise is a type of business where a parent company (the franchisor) grants licenses to independent business owners (the franchisees) to use the parent company’s:
- trademarks,
- business model,
- products,
- and services.
In exchange for the license, the franchisee typically pays the franchisor an initial fee and ongoing royalties.
The great thing about franchises is that they are available in practically any field, from dining and fast food to pet care, gyms, clothing, cleaning services, and even car wash and maintenance.
As a franchisee, you get to run your own business under an established brand and with the support of the franchisor’s resources and expertise. Plus, many franchises come with a built-in customer base and a proven track record of success, making them a potentially lucrative investment option.
Meeting the four main requirements for E2 Visa Investments
When you look at the four core components of what counts as an investment for an E-2 visa, it is easy to see how franchises could fit the bill.
They are active commercial enterprises that you can begin investing in from afar and start in earnest once you arrive in the U.S.
Nor do you have to struggle to find a franchise in which to make a substantial (minimum $100,000 investment).
Even if your heart is set on low-investment franchises or nontraditional locations with lower investment fees, you can consider starting multiple units.
Your money is at risk, too. Franchises represent high odds of success, especially when you research and choose well. However, your money is not guaranteed to grow, and there is some risk involved.
As for ownership, you can tailor that in many ways.
For example, franchises are available for about $100,000, and you could be the sole owner.
Alternatively, you and a partner could split the investment in a higher-priced franchise. You can invest in franchises that will create enough income and jobs for you to demonstrate that the business is not marginal.
Since franchise opportunities are everywhere in the U.S., you have more flexibility in choosing where you live.
You can also find something aligned with your background and passions. There’s no shortage of franchise E2 visa investment examples to choose from.
Why is a franchise business more successful in E2 visa investment?
Starting a business is a complex and sometimes challenging task, and starting one in a foreign country can be even more difficult. That’s why franchise businesses have become a popular choice for many E2 status applicants.
With a franchise, the franchisor provides you with ready-made systems and processes, making the startup process less overwhelming.
One of the most significant advantages of owning a franchise is the ongoing support provided by the franchisor in almost all areas, including:
- management training,
- customer service,
- real estate,
- hiring employees,
- marketing,
- and even making a detailed business plan, among others.
Additionally, franchises offer a proven business model that makes USCIS immigration officials more confident about the prospects of success.
Another advantage of owning a franchise is the instant name recognition among customers with an established business name. This can lead to faster growth and revenue generation.
Franchise businesses also offer various investment amounts and requirements for different risk tolerance levels, making it an attractive option for many investors.
Franchise businesses also provide ample room and opportunity for future scalability and expansion. This means that as your business grows, you can expand to new territories and increase your revenue.
Not all franchises are available
Picking a single franchise investment from the multitude of opportunities out there can be challenging.
It’s crucial to know that not all franchisors work with potential E-2 visa holders. These franchisors tend to already have numerous franchisees and don’t want to accept even more international applicants.
To make the process smoother and faster, foreign applicants seeking E-2 investor visas can benefit from the help of E2 franchise consultants like Adam Goldman.
These professionals can help you find opportunities that meet your requirements and connect you with franchisors at a higher level. Don’t hesitate to get in touch with one of the top franchise consultants out there today.
Conclusion
In conclusion, owning a franchise business is a wise choice for E2 visa applicants who want to start a new business in another country.
With established systems and processes, ongoing support, and a proven business model, franchises offer a higher chance of success and growth.