Creating and Managing Your U.S. Business Enterprise With the E-2 Visa

The E-2 Treaty Investor visa is a highly popular non-immigrant visa for business investors and entrepreneurs with an astonishingly high average approval rate, reaching over 90% in 2022. The high popularity of this visa stream lies primarily in its ability to be renewed an unlimited number of times, as well as the fact that it allows E-2 applicants to bring their spouses and children to the U.S. with them. This article will provide insight into the benefits of this visa and the road to obtaining it. 

Understanding the E-2 Visa 

There are several requirements that applicants must comply with to be eligible for an E-2 visa, primarily concerning their nationality, investment, and position within the enterprise they seek to establish and manage in the U.S., as well as the business operations of their envisioned company. These include: 

• Having nationality of a country that maintains an E-2 treaty with the U.S. A comprehensive list of the countries whose nationals are eligible to apply for an E-2 visa can be accessed at the official website of the U.S. Department of State – Bureau of Consular Affairs. 

• Having the intent to depart to the U.S. after the E-2 visa expires. Visa applicants must provide written confirmation that they do not have an intent to remain in the U.S. once their E-2 status ends.  

• Having invested or being actively in the process of investing substantial capital in the U.S. company. The investment can be made either by individuals or their foreign businesses. In the case that the principal investment is made by a foreign business, this business will be considered the E-2 principal investor and will have to satisfy the nationality requirement by showing that at least 50% of its shares are owned by nationals of the treaty country. The exact amount of required investment is not clearly defined; however, based on our experience, the minimum investment for an E-2 visa to be considered by the USCIS should be no less than $50,000 and optimally $100,000, with this greatly depending on the proposed business model.  

• The proposed company must be an active, for-profit business. The company must be actively involved in selling products or providing services to generate income. Businesses with passive methods of generating revenue, such as those profiting solely from passive investments, are not eligible for an E-2 visa. 

• The proposed business cannot be a marginal enterprise. According to the USCIS, the marginal enterprise is a business that has no present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and their family. 

• The applicant must seek to enter the United States solely to develop and manage the proposed business. Applicants must either show that they own at least 50% of the proposed company or, if they own less than that, show that they will have operational control over its business operations by occupying a managerial role within the company and will not be a passive investor.  

• Proving a lawful source of funds. The applicants must document that the source of their investment is lawful and that the funds come from legal employment, gifts, sales transactions, personal loans, and other regular sources. 

• Having irrevocably committed funds to the proposed business. The applicants must show that their investment is at risk by showing proof that it has already been spent on the business or that its substantial part has been already spent on the business with detailed investment allocation for the remaining funds that will be allocated toward covering business-related costs.  

Choosing the Right Business Entity 

Numerous business structures are eligible for E-2 visas, provided they are not non-profit or passive. E-2 applicants most often opt for Sole Proprietorship, Partnership, Corporation, and Limited Liability Company (LLC) when deciding on their business structure.  

• Sole Proprietorship refers to a business that has no legal separation from its owner, meaning that the owner and its business are treated as one in terms of liability. This is the simplest business structure where the owner usually conducts business in their name and it is mostly used by plumbers, electricians, fitness instructors, and freelancers, among many others.  

• Partnership refers to a business with shared ownership between two or more individuals with them also not being legally distinguished from the business in terms of liability, as is the case with sole proprietorships. Partners share profits and liabilities among themselves with profits from the business flowing through their personal tax returns. 

• Corporation is an entity that is legally separated from its owners and its assets are not at risk if the company operates negatively nor are they directly legally accountable for the company’s operations. Shareholders have limited debt liability that is equal to their investment and ownership in the business.   

• Limited Liability Company (LLC) is a legal entity that combines the advantages of both partnership and corporation, including having the tax efficiency of a partnership while also providing the limited liability features of a corporation. This is why LLC is the most popular business structure for E-2 purposes. These companies can have one or more owners who are members of the operating agreement that details their ownership, responsibilities, and liabilities. Members may directly manage the company’s operations or appoint others to do so.  

Navigating the Application Process 

The application process for an E-2 visa is complex and involves several steps that need to be carefully followed to ensure high chances of visa approval.  

• Step 1 – Setting up the proposed company in the United States. This includes selecting the appropriate business structure, forming the company, and opening a business bank account.  

• Step 2 – Depositing investment funds to the U.S. company’s bank account. 

• Step 3 – Spending the deposited funds. As a part of the visa requirements, investment funds must be irrevocably committed and put at risk and, as such, spent on or having a proven intent to spend on business-related purposes.  

• Step 4 – Submitting an E-2 application and a business plan. This includes preparing a comprehensive amount of documents and a formal business plan that clearly and realistically details the business operations and financial projections for the proposed business, as well as the allocation of initial investment. 

• Step 5 – Interview. After all of the above steps are completed, considering there are no requests for additional information, applicants will be invited to attend an interview at the U.S. embassy or consulate where submitted documents and the business plan will be reviewed and discussed with the applicant.  

Although this process might seem easily manageable, it should be noted that E-2 visas are affected by a number of factors that can affect the application outcome. This includes selecting an appropriate business model and structure based on the current economic climate and location, determining the proper investment amount and allocation, and creating a realistic business plan, among many others. With this in mind, it is suggested to engage the services of experienced immigration professionals who will provide expert guidance and avoid the common pitfalls applicants experience when deciding to go through this process independently.  

Investing Wisely 

While it might seem risky to start spending investment funds prior to a visa being approved, this is, in fact, what the immigration officers are looking for and this will assure them that the E-2 applicant has a genuine intent to develop a business in the U.S., rather than leaving the funds in the account and exploiting this visa opportunity solely to enter the county. However, this does not mean the investment funds should be spent on anything. It is important to note that these funds are not supposed to be used to cover the personal costs of the applicant, but rather for business establishment and development purposes.

The investment can be spent on purchasing land, properties, and already operating businesses, procuring equipment, office furniture, and other goods, as well as covering the costs of business establishment, registration, professional fees, marketing, rent, utilities, and other business costs. As there is no guarantee that the visa will be approved and that the invested funds will not be lost, it is wise to avoid investing significant funds in long-term assets that will be hard to sell in the event of a negative outcome. To minimize potential risks, it is suggested to spend a part of the funds on expenses necessary to establish a business, such as registration, business plan development, securing business premises, and initial marketing activities, while the remaining funds can be allocated toward covering the initial operating expenses of the proposed company and explained in detail in the business plan.  

Managing and Growing Your U.S. Business 

In addition to making a substantial investment in the proposed company, an E-2 visa applicant needs to assume the managing role within the business. Most often, E-2 applicants assume the position of the company’s General Manager or equivalent and are responsible for determining business goals and developing and implementing strategies toward their achievement through effective organization and management of daily business operations, human resources, financials, and sales and marketing operations.

It is important to present the high but realistic growth potential of the business that will be supported by the applicant’s management, distinctive skills, and expertise. This includes expanding the target market, increasing market share, developing different sales channels, expanding product or service portfolio, or entering business partnerships with other market players, among others. However, presenting unrealistic expansion plans may be counterproductive as the company’s proposed plans might be assessed by the immigration service and compared with the achieved results in the future.  

Compliance and Renewal Obligations 

The E-2 visa allows applicants to stay in the U.S. for a period of two years, with the possibility of an unlimited number of two-year renewals, which is one of the most attractive points of this visa stream. This visa can be renewed indefinitely, as long as the company continues operating positively and generating profits. Each time the visa is renewed, similarly to the time of the initial application, the E-2 applicant needs to pay relevant fees, prepare a comprehensive amount of documentation, present financial statements of the company and the proof of substantial investment at risk, and develop a business plan for the following period.

When a visa holder applies for renewal, actual business results will be compared to those stated in the previous business plan, and thus having a realistic business plan with an operating plan is of utmost importance for all future E-2 renewals.  

Family Considerations 

This visa stream also allows E-2 visa applicants to bring their families to the U.S. with them through the E-2 dependent visa. This visa is for spouses of children of E-2 visa applicants, allowing them to live and work in the U.S. for as long as the visa of the primary applicant is valid. The main requirement for the E-2 dependent visa is for the applicants to be either spouses of the main applicant or unmarried children under the age of 21. No other family members are eligible for this visa. Contrary to the main applicant, the E-2 dependent spouse can work anywhere in the U.S. and can but does not need to be employed by the E-2 company. The E-2 dependent child can attend school but is not allowed to work in the United States. 

Conclusion 

The E-2 visa is one of the best options for foreign investors to come to the U.S. in a non-immigrant status, offering numerous benefits to its holders, including the option to stay in the U.S. indefinitely through its unlimited renewals and bring their families. While providing significant benefits, the process of obtaining this visa is complex, involving numerous steps and necessitating specialized documents and a well-developed and realistic business plan as its crucial elements, thus putting at risk of rejection those applicants that decide to independently manage the E-2 visa application process.   

Interested in the E-2 visa? Our immigration experts can provide you with comprehensive support, including giving you a more detailed insight into this visa stream, answering any questions and concerns you might have, and developing professional USCIS-ready business plans with high approval rates.  

Need further support? We can connect you to a trusted U.S. immigration attorney from our partner network to manage your E-2 visa application process. Learn more about our E-2 Visa business plans here.