What is a Substantial Investment?
Depending on your business and the sector it inhabits, a sizeable investment can differ. Take an E2 visa holder for instance; they may need to part with $50,000 for a small retail store but investing more – say around $200,000- will be ideal when creating software companies.
When it comes to substantial capital investment, the U.S. government does not have a fixed definition. However, they do base their assessment on factors like business size and scope, industry type, and employment opportunities created through the investment.
In this blog, we will discuss these factors to consider when making enough capital investments. But let’s get to know first why a substantial investment is an essential requirement for E2 visa approval process.
Why are E-2 Visa Investors Required to Have a Substantial Investment?
E2 is designed for foreign investors who are investing substantial capital in the United States. The main purpose is to start or expand a business that can benefit both the investor and the US economy. A substantial capital is defined as an amount sufficient to ensure the foreign investor’s financial commitment to the successful operation of the business as measured by the proportionality test. The proportionality test compares the total amount invested in the business with the cost of either purchasing an existing business or creating a new start ups businesses.
It is required because it serves as an indicator of the non-local investor’s commitment to the business venture in the US. And it also ensures that the business would have adequate capital to fund its operations.
Determining Factors of a Substantial E-2 Visa Investment
When determining whether or not a business venture is substantial enough to qualify for an E2 visa, there are several factors to consider.
The size and scope of the business
When determining whether or not a proposed enterprise is substantial enough to qualify for E-2, it is important to consider the size and scope of the business. The substantial capital investment required for an E-2 visa must be substantial about the total cost of either purchasing an existing company or establishing a new small business.
For example, if the total cost of starting a new business is $100,000, then the substantial capital investment required for an E2 visa would likely be more than this amount.
The type of industry
Another important factor to consider when determining whether or not a proposed enterprise is substantial enough to qualify for an E2 visa is the type of industry in which the business will operate.
Certain industries may require more capital than others. And this should be taken into account when calculating a substantial investment requirement.
For example, businesses in certain technology or research and development fields may require enough capital of up to $200,000 or more.
Employment opportunities generated
Another important factor to consider when determining substantial investment for an E2 visa is the number of employment opportunities that will be generated as a result of the investment.
Generally, substantial investments should create at least three jobs to qualify for an E-2 visa application process.
Is a franchise qualifies as an E-2 investment?
Absolutely, franchises are a great option for those foreign investors seeking an E2 visa. Franchises come with incredible advantages, such as comprehensive training and guidance from the franchisor to help investors succeed.
On top of that, they typically offer well-known brands and established business models, which can be very helpful, when it comes to immigration applications.
The amount of resources necessary to invest in a franchise varies depending on what type you get, yet usually, it is quite substantial.
The Bottom Line
The substantial investment requirement serves as a key factor in determining whether or not an investor will be eligible for the E2 visa.
In order to be considered for the visa, investors need to demonstrate that they have substantial capital to invest into a business account to prove that they have made enough investment in that business. Also, it is substantial enough to support their enterprise successfully.
It requires careful consideration of…
- the size and scope of the business venture,
- industry type,
- and employment opportunities generated by the investment.
For those in search of an E2 visa, franchises are also a great route to take as they may require significant investments. Talk to a franchise consultant who can help you find the right franchise business in the US that works with E2 visa candidates.
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