Entrepreneurs Guide for E2 Business Plan
Entrepreneurs Guide for E2 Business Plan
Make your dreams of living and owning a business in the United States a reality
The U.S. economy is rich with opportunities for a foreign national exploring new business prospects. While there are a numerous visa types, the E2 visa can offer investors from treaty nations a unique level of flexibility that other visas do not provide. A foreign investor with drive, vision, and resources can utilize the E2 visa to position themselves to form a business in the United States without worrying about investment amounts, or about being employed by a foreign parent company. However, a well-researched and professionally prepared E2 business plan is key to approval of the visa application.
A successful business plan is one that clearly lays out the goals and objectives of the business and provides financial projections which illustrate the financial health and future viability of the enterprise. It is advisable that every business have a business plan in order to improve the chances of success, business plans can keep the company focused and be used to develop the company’s vision and goals. A strong plan is not only vital for the success of a business but it is a necessary step in the E2 visa application process.
Is the E2 visa right for you?
- Do you have the experience and capital to invest in your own business?
- Are you ready to make key decisions and hire employees?
- Are you willing to clearly state your business objectives in a manner that is palatable to the U.S. Citizenship and Immigration Service?
If this sounds like you, then read on.
An overview of the E2 visa
The E2 visa allows an individual to enter the United States to work by way of a business investment. The visa petitioner must be in control of the investment while they are in the country. It must be remembered that the E2 is a non-immigration visa, meaning the investor cannot permanently stay in the United States, but there is no limit to the number of times the visa can be renewed. When the visa is approaching expiration, the investor has three options, the investor may apply for an extension, allowing them to stay for another two-year period; they can apply under a different visa type; or they can return to their home country.
When applying for an E2 visa, it is vital for the investor to have a business plan which addresses the concerns of the U.S. Citizenship and Immigration Service (USCIS). The immigration business plan not only serves as a guide to business performance, but must show the USCIS how the U.S. economy will benefit from the business, primarily through job creation. In addition, the USCIS needs to see that the investment is placed at risk and that the funds have come from legitimate sources. Lastly, and more to the point, it must make it obvious that the E2 applicant is well aware of and uniquely suited to tackle the challenges of the particular business.
As mentioned above, the E2 visa is a non-immigration visa that allows a foreign investor to come to the United States with the sole purpose of either establishing a new business or purchase an existing business. The investor’s home country must be a country which the United States has an existing commerce treaty. In order to show their commitment to the stated purpose of investing into a U.S. business, a “substantial amount of capital” must be invested. There is no set amount for what is considered a “substantial amount” of investment but the USCIS defines the amount as:
Substantial in relation to the total cost needed to purchase an existing business or establish a new one;
The commitment is sufficient enough to ensure the businesses successful operation; or
Enough to ensure the investor will successfully develop and direct the business. The amount in question will vary in proportion to the cost of the enterprise.
Like any business, the objective of an investment is for the business to make a profit. Additionally, the funds in question are placed at risk; if the business fails, the visa petitioner will sustain a partial or total loss of their capital investment. There can be no guarantee that the investor will get their investment back or that the business will succeed.
Qualifying foreign investors are not limited to a particular industry or type of business when applying for the E2. In order to encourage economic growth in the United States, a qualifying business as defined by the USCIS is purposely broad. A “bona fide enterprise” refers to “a real, active and operating commercial or entrepreneurial undertaking which produces services or goods for profit.” A thorough business plan will provide the necessary financial projections to prove the viability of the business, as well as provide background information on the investor to illustrate they have the skills and experience needed to guide the business through all stages of development and growth.
The Essential Documentation
To reduce the chances of the USCIS issuing a Request for Evidence (R.F.E.), Notice of Intent to Deny (N.O.I.D.), or an outright denial; a business plans needs to supply information to the areas that are traditionally viewed as problematic. The following information explains what documents are required when a business plan is being prepared for a treaty investment.
- Lease Agreements – The USCIS requires documentation for all of the sites relating to the business including offices, production locations, and warehouse space. This will illustrate that the business is producing goods or services for a profit.
- Resume of the applicant and any current employees – A resume will show the educational background and work experience of the investor, and show how it relates to the business in question. Any concerns the USCIS has regarding the skills and ability of the investor to oversee the daily operations of the enterprise should be addressed through their resume. The same is true for any employee in questions – their experience with the specific business or in a relevant industry will assist in the company’s growth under investor leadership.
- Business organization filings – The Articles of Incorporation or other official charter information provide the USCIS unmistakable evidence that the business is real and meets the legal requirements for doing business in a particular jurisdiction.
- Purchase or franchise agreements – If the investor is purchasing an established business, it is necessary to provide evidence of the purchase through a signed agreement or contract. Additionally, it is necessary to provide the most recent income statement and balance sheets so the USCIS can see the financial viability of the company. In the case of a franchise, the signed franchise agreement is required, which not only illustrates potential profitability, but because of the state and federal oversight of franchises, reinforces that the investment is in a bona fide enterprise as defined by the USCIS.
Business summaries are essential
Having business details is an obvious requirement, but the summaries can make or break your E2 visa petition. Keep in mind that the adjudicator isn’t you – or has any knowledge of your industry. They will start with these summaries and dive in from there. The information below is necessary and relevant to any business, but, like the essential documents discussed previously, the E2 visa business plan needs to include these summaries to show the viability of the business. The following are some of the most important topics that should be covered.
Executive overview – This summary is the first impression the USCIS will have of the business and the investor. This will provide an overview of the company’s mission, clarify its objectives, and outline the ownership structure. An executive overview can also provide additional background information on the E2 visa petitioner, which may not be included in a resume, as well as financial highlights and brief descriptions of the products and services that will be offered.
Company overview – The operational aspects of the company are explained in detail and should provide the USCIS with an understanding of the business. More in-depth information about the source of the investment funds and any related start-up costs can introduced while discussing the company overview. It is very important that the investment and related funding comes from legitimate sources; the investor must show that the funding has not come, directly or indirectly, from any criminal activity.
Products – This area should include descriptions of the products or services offered, as well as explain and emphasize the products or services that will be offered, and explore the benefit to the target market. This is also an excellent place to supply details related to intellectual property the company has, or research and development activities it is currently engaged in.
Market analysis – An in-depth market analysis is essential to any business, and by examining the industry, as well as the potential market area, the treaty investor can develop a better understanding of the U.S. market and develop informed decisions concerning the business, its market, and its customers. USCIS wants to see informed E2 visa applicants making informed decisions for a sustainable investment.
Sales Strategy – The sales strategy will illustrate the financial viability of the business and provide USCIS with accurate assumptions for the viability and sustainability of the business. In the case of buying into a franchise or purchasing an existing business sales strategies can be developed from the most recent balance sheets and income statements. Projections can be developed using a number of factors including information the investor has provided on product costs and market analysis.
Common Questions regarding E2 visas
In addition to the requirements previously discussed – that the investor must be a national of a commerce treaty country, the business must be a bona fide enterprise, and the investment amount must be substantial – the U.S. Citizenship and Immigration Service has established additional guidelines an investor must meet when applying for or working under a treaty investment visa.
Can you apply if you are not the owner of the company?
For most cases – no. The investor must be coming to the United States for the sole purpose of directing or developing the subject of the investment. The USCIS identifies this by showing that the investor holds at least 50% ownership of the business, or an executive / managerial position which gives operational control of the business. However, there is a way to apply for an E2 essential visa¸ if your skills are essential to the business. More on that below.
What is the minimum investment necessary to apply for E2 visa?
Though there is no set amount for the required investment, but the investor must show awareness of the expenses related to starting a business. The investment needs to be significant in relation to the total cost of either purchasing an existing business or for creating a similar type of business from the ground up.
Can I use a gift of funds to start my business?
Maybe, but the source of funds should be tracked and documented. The investor must be in possession of the investment funds and show a clear path for the source of the investment capital, proving that the funds have not been obtained illegally. If the funds have come from a third party, the investor must prove that the funds have been lawfully obtained.
Is having an office mandatory at the time of the initial visa application?
While it is not necessary to have your office at the time of your visa application, you should have made the necessary steps to be ready to open your office. This should include lease terms and start date as well as information on your office.
Do you need to have personnel already employed at the time of the initial visa application?
As is the case with an office, you do not have to have employees on payroll when you apply for your first E2 visa, but you should have a personal plan that outlines when they will be hired, the skills you are looking for and what you expect to pay them. Don’t forget to include payroll taxes and how the personal expense will affect your overall profit and loss projections.
How many employees do you need to have in the end of your initial visa period in order to get an E2 visa renewal?
An E2 visa investment must create jobs and thus must do more than provide a minimal living for the investor. However, there is no ‘minimum job creation’ hurdle like there are for other investment visas. To obtain or renew an E2 visa, the business should have employees other than the investor themselves.
Not the owner, but critical to success? Enter the E2 Essential Visa
While many of the E2 treaty investors coming to the United States take on an executive or managerial responsibility, there are individuals who, as a result of their skills and experience, can be classified as an “essential employee” – staff whose skills are crucial to the success of a business. The aim of essential employees is to ensure that a company’s need for specific skills are fulfilled. By identifying the skills and background of the employee, the company is poised to utilize them for a greater chance of success. There is no requirement that the essential employee have any previous work experience with the specific business, just that they have the training, education or experience necessary to assist in the establishment and growth of the company. There is no standard definition of what qualifies as essential skills, as these can vary from industry to industry. When evaluating and determining specialized skills the USICS will look at the educational background, the uniqueness of the specific skills, and the function of the job as it relates to the overall operations of the business.
Due to the complex nature associated with identifying an essential employee, decisions are made on a cases-by-case basis. When reviewing the essential employee application, the USCIS must evaluate the long-term and short-term needs of the business. A company’s long-term needs could relate to: product growth, production improvements, intellectual property development, or quality control. Short-term needs may relate to: business start-up and training of supervisors or skilled technicians. Additionally, some skills may be needed continually for the success of the business, while others may be needed for start-up only. An E2 business plan is still required to outline the company and the impact the E2 essential visa applicant will have.
Having the necessary understanding is the first step towards success. Compiling the necessary paperwork – lease agreements, resumes, purchasing agreements, contracts, articles of incorporation, and financial statements – will ensure that the business plan will be as complete as possible. It is possible for the investor to prepare the business plan on their own, but someone who has experience working with treaty investors will be able to prepare a well-crafted and focused business plan. The expertise of an experienced business plan writer will reduce chances of the investor receiving a R.F.E. or a denial. A well written business plan, which examines the necessary subjects and provides accurate financial projections, will be approved sooner and will allow the investors dreams of a business in the United States to become a reality.