E-1 / E-2 Visa

Entrepreneurs & Small Business Owners' U.S. Immigration Strategy

Many foreign business owners ask the same question: "How can I move to the U.S and live the rest of my life there?" One reason is that the United States is a desirable destination is that it offers wonderful opportunities for all people in the arts, science, education, business and investment fields. Its economic and political stability has been a mainstay, and over the years the U.S. continues to experience economic growth and individual wealth creation. The main source of this growth and prosperity is the small businessperson. All across America small businesses have been the catalyst of this growth, creating jobs for Americans and wealth and security for entrepreneurs.

The U.S. government encourages foreign investment in the U.S. because foreigners investing in the U.S. create job opportunities for Americans. Americans working earn money, part of which is invested in banks, stocks, bonds, real estate and businesses, and part of which is spent on consumer goods and services. The more money earned by Americans, the more invested and the more spent, creating more demand for additional goods and services. Consequently, the United States Government has immigration laws that allow foreigners to come to the U.S. to head and manage businesses that they either buy or start-up.

Two Strategies for Foreign Businesspeople

Do you own or manage a business that you have been involved with on a full time basis for at least one year? If their answer is "Yes," the Intracompany Transfer Visa (L-1) strategy may be the best avenue. If their answer is "No," then the Investor Visa strategy (E-2) may be the best avenue.

The Investor Visa, or E-2, does not require the businessperson to have an existing, on-going business in a foreign country. However, the E-2 does require the applicant to make a substantial investment in a U.S. business and there is no clear cut strategy to obtain a Green Card, even though the visa is technically available for "infinite duration." The E-2 visa is available to anyone who is in a position to make a substantial investment in a U.S. business, develop and direct that business, and create new job opportunities or commerce in the United States.

The Intracompany Transfer Visa, or L-1, does not require a minimum amount for investment. But it does require the businessperson to have been an executive or manager of an on-going foreign business for at least one out of the past three years. The big difference? While the E-2 visa strategy provides for the client to stay in the U.S. for as long as they control and operate the business, it does not usually provide for the client to acquire a Green Card. The L-1 visa strategy offers a clear path to the Green Card.

The E-2 Investor Visa

The E-2 visa is available to citizens of countries which have a treaty with the United States. Individuals who qualify will have made a substantial investment in a U.S. company, and wish to come to the U.S. to develop and direct the business operations of that enterprise.

Basic Requirements

• The investor's home country maintains a treaty with the U.S.
• The investor has made a substantial investment in an U.S. business.
• The business is at least 50% owned by the citizens of the treaty country.
• The investor intends to come to the U.S. to develop and direct the operation.
• The investor (or key employee) is coming in a capacity that is either executive, supervisory or possesses specialized skills.
• The investor possesses means of support independent of the enterprise.
• The investment will create new job opportunities (directly or indirectly).
• The investment's return is not solely to earn a living for the investor.

The E-2 visa does not require the investor to have an existing, on-going business in a foreign country. Also, there is no minimum investment amount needed to qualify for the E-2 visa. The amount invested, however, must be "at risk" and must be enough to get the business to a successful operating level.

Key Issues

Substantial Investment: There is a recognized distinction between manufacturing and service businesses. The substantial investment test may be met in a service business if it is established that the amount invested is necessary to establish a viable company which can grow independently. For example, a consulting company set up to fulfill a contractual obligation with a U.S. business may require just enough capital to open a office, buy necessary office equipment (desks, phone, fax computers) and enough working capital to support the E-2 personnel for a given period of time. In some cases, this could mean an investment of as little as $50,000.

Investment Subject to Loss: The money invested must be "at risk" and subject to loss. Collateral for a loan must be from personal assets or include a personal guarantee. Mortgage debt or a commercially secured loan (e.g., loan secured by the business's assets) is not sufficient.

Amount at Risk Proportional to Total Investment: The amount "at risk" generally needs to be a high percentage (75% or more) of the total investment for smaller investments. For example, an investment of $80,000 in a motel valued at $400,000 (20% at risk) where the remainder is secured by a mortgage on the property (non-recourse) is not substantial. However, a cash investment of $75,000 in a business that cost $100,000 to purchase (75% at risk) should meet the substantial investment test.

Passive Investment: The U.S. business cannot be a passive investment like stocks or undeveloped land. Land development as opposed to land investment, is permissible.