E2 Treaty Investor Requirements

The E2 Treaty Investor visa allows entrepreneurs and business owners from Treaty countries to invest in a US business, either through setting up a new enterprise or by investing in an existing one.

Eligibility for an E2 Treaty Investor visa rests on the following conditions:

• You are a Treaty country national.
• You have made a substantial investment in a US business.
• The business that you have invested in is viable and actual.
• You have control over the funds invested and are placing them at risk by investing in this enterprise.
• Your investment will have a positive effect on the US economy.

One of the more problematic criteria for E2 applicants is the requirement to have made a ‘substantial investment’. There is no specific definition or ‘brightline’ test to explain unequivocally what is required to satisfy United States Citizenship and Immigration Services (USCIS) eligibility requirements.

 

What constitutes ‘substantial investment’?

USCIS uses the phrase ‘substantial amount of capital’ when referring to the E2 investment. They define it as being substantial in relation to the business cost, and sufficient to ensure the investor’s commitment to the business and their involvement in the business, and the ongoing success of the business.

 

How much should you invest?

There is no specific or arbitrary minimum or maximum investment amount that would guarantee you are granted an E2 Treaty Investor visa.

To make its decision, your application and the proposed investment amount will be assessed by USCIS against a number of factors:

• What form your investment takes, e.g. investing in an existing business or setting up a new business
• The proportionality test
• The source of your funds

What is seen as ‘substantial’ is tied to the type of business that you invest in, whether that be a new business or an existing enterprise, and how much it will cost for the business to become and remain operational.

In essence, the definition of substantial is entirely relative to your individual case.

 

Proportionality Test

The proportionality test is used to decide whether an investment is substantial or not. It compares two figures:

• the investment amount
• the cost of purchasing an existing business or the costs of setting up a new business

Using these two figures, the proportionality test calculates a percentage of investment in comparison to the cost of the business (whether new or existing).

For instance, where the business purchase price is $100,000, and the investment amount is $90,000, the percentage is 90%.

By comparison, where the cost to set up a business is $500,000 and $250,000 has been invested, the percentage is 50%.

Where a business with a market value of $3million receives an investment of $900,000, the percentage is 30%.

Generally, the lower the cost of purchasing or setting up a business, the higher the percentage must be to be seen as ‘substantial’. Therefore, the higher the cost of the business, the lower the percentage needs to be.

So, any of the above investments may be acceptable for an E2 Treaty Investor visa, as long as all other eligibility conditions are met, regardless of the level of start-up costs, whether high, for instance, in the case of a factory, or low, as in when starting a consultancy business.

 

Source of funds

The E2 investor must have control of the investment funds and have obtained them from lawful and acceptable sources, including:

• inheritance
• personal savings
• earnings from investments
• monetary gifts

Loans that are secured against the the investor’s personal assets, for instance, a second mortgage on the investor’s home, are generally acceptable, as are certain unsecured loans.

Loans secured on the business that is being invested in for the purpose of the E2 visa, however, are not an acceptable source of funds for an E2 investment.

The amount of financing through loans that is allowed as part of your investment is down to the discretion of the embassy or consulate officials.

Where the E2 investor purchases a business, the percentage of secured financing allowed rises with the price of the business. For instance, a business purchased for $100,000 would be allowed a lower percentage of secured financing than a business purchased for $300,000.

 

Investing in an existing business

When you have invested in an existing US business, the value of the business will be taken into consideration, whether you are purchasing the business in its entirety, purchasing part of the business along with other investors, or otherwise making an investment in the business.

The value of the business is therefore taken as how much it was purchased for, or a value that is deemed to be a fair market value.

 

Investing in a new business

Where your investment has taken the form of setting up a new business, the figure of interest to USCIS will be the complete costs of setting up your new business, from the initial start-up costs to the funds needed to make that business operational.

 

Setting up a new business with low start-up costs

This can be the most difficult scenario when applying for an E2 Treaty Investor visa because you can only apply for the visa once you have made the investment.

Making the investment means spending the investment. You can’t simply have the money in your bank account waiting to pay set-up costs as they occur.

Your business must be established before you can apply for an E2 Treaty Investor visa and you must be able to demonstrate that your investment has been spent, what it has been spent on and that the investment is at risk. For this reason, it is recommended that you pay as many set-up costs as you can before your make your visa application, for instance, your lease, suppliers, or employee costs.

 

How to apply for an E2 Treaty Investor visa

Once you are in a position to have determined your level of investment funds and having made the investment as required, your next step will be to complete the formal application process.

The first step is to register your company using the Online Non-Immigrant Visa Application (form DS-160). You will be required to upload a photo of yourself.

Once you have completed the application process, print off the confirmation page for your own reference and to present at your interview.

Set up an account on the Visa Appointment Service website. Pay the machine-readable visa application fee, arrange for your passport to be returned to you by courier service, and schedule your interview appointment.

You should now submit any supporting documents electronically. These will include:

• covering letter describing your business, who will benefit from the business, and your eligibility for an E2 Treaty Investor visa
• DS-160 confirmation page
• copy of your machine-readable visa application fee receipt
• letter on company letterhead giving details of your job
• letter of agreement between the treaty investor and their legal representative, where applicable
• colour photocopy of the biometric page of your passport
• colour photocopies of any US visas, US entry/exit stamps, or I-94s
• copy of alterations or extensions to your USCIS granted status
• if you are a UK citizen, evidence of your UK residency
• curriculum vitae
• copies of educational certificates and qualifications
• signed statement of intent which confirms that you will depart the USA when your E2 Treaty Investor visa expires
• Articles of Incorporation or Organisation for your business
• share certificates, operating agreement, share ledgers or other evidence of the ownership of the business
• if there is a parent company, colour photocopies of the biometric pages of the passports of the parent company owners
• if your business in the US is a subsidiary or affiliate of a foreign corporation, the incorporation and ownership documents of that business
• organisation chart showing the full ownership structure and legal proof of ownership for all parties concerned, where the chain of ownership includes intermediary entities, or where you have a large company with numerous owners or subsidiaries
• if the investor is a public company with many shareholders, an affidavit signed by the relevant corporate official stating that the company is exclusively traded on the relevant stock exchange, and a copy of the latest trading information
• details of the investment in the US business venture, and evidence of the investment
• if you are purchasing a US business, a signed and dated, valid purchase agreement, if applicable a binding escrow agreement that confirms how the investment funds will be distributed, what would happen if the E2 visa isn’t granted, and how the business will be purchased
• if you are purchasing a franchise, a signed and dated franchise agreement, a copy of the franchise disclosure document, and evidence of franchise fee payment
• details of the source of the invested funds with evidence of the source of the funds and that the funds have been moved to the US
• if the funds have come from a foreign based affiliate or parent company, a copy of that company’s most recent financial statement
• evidence that demonstrates that the business is genuine and in operation
• if the business is a subsidiary or an affiliate of a foreign company or group of companies, evidence that shows that the foreign company or group of companies is active
• evidence that the business now or in the future has the ability to make more than enough income to provide for you (the investor) and your family
• if the business is already established and in operation, US federal tax returns for the past 3 years, profit and loss statements for current and past calendar years, all W-2 forms, 1099s and payroll invoices for the last 2 years

 

Need assistance with the E2 Treaty Investor visa?

The process of obtaining an E2 Treaty Investor visa can be lengthy and complex. NNU Immigration are specialist US immigration attorneys with a wealth of knowledge and experience in E-2 visas.

NNU Immigration are dedicated US immigration attorneys. If you are considering applying for the E-2 Treaty Investor visa, we can support you throughout the application process. For advice about your US visa application, contact us.

This article does not constitute direct legal advice and is for informational purposes only.