Thinking about starting a business in the U.S.? E-2 visa may be an option worth considering. There are many tempting benefits that come with this non-immigrant status:
- Enter the U.S. market by expanding your business or starting a new one;
- Live in the U.S. indefinitely, as long as you manage your company;
- Travel in and out of the U.S. more easily than with other visas;
- Your family can join you and, unlike other dependents, your spouse can apply for employment authorization and work for any U.S. company, and
- Your children may qualify for in-state tuition, a big financial advantage for those interested in getting a college degree in America.
The E-2 visa is the perfect solution for many foreigners, either business owners interested in taking their business globally, or well off individuals who want to invest and live in the U.S. Pragmatic families look at this option as an investment in their kids’ education. With costly international students’ tuition rates (2-3 times more than an American student) many foreigners are tempted to use this visa to obtain in-state tuition. It makes perfect sense since you can save tens of thousands of dollars for undergraduate or graduate studies.
It sounds attractive, but E-2 is not for everyone. Only citizens of countries that have a commercial treaty signed with the United States are eligible to apply for this visa. See here a list of these countries: http://travel.state.gov/visa/fees/fees_3726.html). This is the first step to check before doing any planning.
Secondly, the money invested must be yours. For instance, you can’t take a loan from a bank and use the money to open a restaurant in America, unless the loan is secured by personal assets (e.g a mortgage on your own house). So, you have to risk your own money, not someone else’s. In addition, the investment must not be marginal. In other words, the business must be able to generate more than enough income to provide for a minimal living for you, the investor, and your family.
One of the first questions investors ask is: How much do I have to invest for an E-2 visa? Although the law does not require a minimum amount, we recommend at least $150,000. But, it also depends on the type of activity. For a production facility you may need to invest minimum $400,000, while for a small business in a rented space (Dollar store, Gas station, Restaurant) $150,000 may be sufficient.
Typically, an application for an E-2 visa is made with the U.S. consulate in the investor’s country of residence. The supporting documents include among others a solid business plan, financial projections, employment needs, proof of funds, and source of money. If the application is solid and there are no grounds of inadmissibility for the investor (e.g. no criminal issues) the U.S. consulate will grant the visa after a 2-month review and an in-person interview.
Sometimes, the investor is already in the U.S. in a different non-immigrant status and would like to change it to E-2. For example, the individual came as a visitor for business (B-1) and after purchasing an American company wants to switch to E-2. In such case, the application is made with the U.S. Citizenship and Immigration Services here in the U.S.
E-2 is not a green card, but it may help you become a legal resident as your business grows. The United States has created a green card program (EB-5) designed to attract foreign investments. The EB-5 program is addressed to foreign individuals who invest either $500,000 or $1,000,000 (based on the geographical area) and create 10 full time jobs. Although you may not qualify for this program at first, you can continue to stay in E-2 status until you meet the eligibility criteria for EB-5 and apply for a green card when the time is right.
NOTE: This article is for informational purposes only and does not constitute legal advice. For a detailed analysis of certain situations, those interested are urged to consult a lawyer.