22 Jul E-2 Treaty Investor Visas: What exactly is a substantial investment?
The E-2 Treaty Investor is a great visa to use for a broad range of clients. From large publicly traded corporations to an entrepreneur who is creating the next big thing. The E-2 visa is a way for the US government to attract new investment into the United States which will create new jobs for the economy. This posting was originally posted in 2016 but the E-2 visa rules are still the same.
How much does an E-2 visa investor need to spend?
This is the most common question we get from those who want to apply for an E-2 visa. Unfortunately, this is not straight forward and the US visa regulations do not provide a specific amount of investment.
E-2 Investors must make a “substantial investment” into the start-up of a US business. US regulations and Department of State guidance don’t give us a specific amount an E-2 Investor must spend in the development of a US business. Instead the proportion the investor has put towards the start-up expenses in comparison to what it would normally cost to get the business to the point of being operational. The lower the start-up cost or purchase price of the business (e.g. $100,000 or less), the higher the percentage the investor must put towards the business. On the opposite end of the spectrum, for example a business that would require start-up costs of several millions of dollars may only require the investor to show a 10% investment of the E-2 Investor’s own funds into the business.
In addition, the E-2 Investor must show they have invested enough to show they will be serious about making the business a success. This is judged within the discretion of the consular officer who reviews the E-2 visa application.
Common Types of E-2 Visa Businesses
The three most common examples we use to illustrate the E-2 visa investment requirement are:
- a consulting business,
- a coffee shop and
- a car manufacturing company.
As we said above, the E-2 visa can be used by any for-profit legal business but we use a few types of businesses to illustrate the “substantial investment” requirement.
A consulting business such as software or public relations business may not require too much to get up and running, maybe just a mobile phone and a laptop. When the capital investment to get up and running is low, the E-2 visa investor must contribute 100% of the costs required to get the business close to or at the point of being operational. In contrast, a car manufacturing company may require $10 million to get up and running and the investor could qualify as an E-2 investor with a 10% investment of his or her funds into this business. In contrast a coffee shop may fall somewhere in between and most likely would require an investment of at least 50% of the E-2 visa investor’s money or more depending on the costs relating to getting the shop up and running.
The Consular Officer who will review the E-2 visa application will consider the costs related to getting the business up and running or if an investor is purchasing an existing business, the purchase price. These expenses must be paid by the E-2 visa investor before the E-2 visa application is submitted to the US embassy or consulate. The investment cannot include costs that will be paid in the future.
The E-2 visa investment costs are limited to start-up costs or the purchase price of an existing business, not day-to-day running costs. Therefore we work with our clients to discuss what they can invest in to meet the E-2 visa investment requirements. Many businesses may be in various phases so it is best to speak to an expert on what can be considered as expenses that would be sufficient in the E-2 Treaty Investor application. In addition, consular officers at US embassies and consulates around the globe may have different interpretations of what is sufficient for an E-2 visa company approval so it is advisable to get advice from an experienced E-2 visa practitioner before applying.
This information is not advice and cannot be considered formal advice. Whether a person would qualify for an E-2 Treaty Investor visa depends on many factors. For more information on how to book a consultation with our office to discuss the E-2 visa, please email our office at firstname.lastname@example.org.