Why Was This E-2 Visa Refused?

Hey there, it’s Ben Frear, an immigration lawyer for entrepreneurs. I recently had a chat with a friendly guy who unfortunately had his E-2 investor visa application refused after his interview in Toronto. I wanted to share with you the valid reason why his E-2 visa was refused, and most importantly, how you can avoid making a similar mistake during your application process.

This guy was understandably upset after waiting for 10 months for his interview and having his application refused. He came to me seeking help and advice on how he can move forward.

Here’s what happened:

He applied in Toronto
His goal was to run a US-based General Contracting Business.
He had experience running a similar business in Canada.
He formed his corporate entity, got an EIN, opened a business bank account and transferred around $50,000 USD into it.
Part of his investment consisted of an existing truck and tools that he used in his Canadian business, but here’s the key fact: he never transferred this property to the United States.

So, to summarize his investment, he had $50,000 in the US company account, a truck that was still in Canada, and tools that were also still in Canada.

During the interview, the officer was very nice and respectful but refused to issue the E-2 visa. And honestly, the officer’s decision was correct.

Why? Because the total at-risk investment was $0. And if you have $0 invested in your US business at the time of your application, your chances of success will be zero.

Here is the relevant section of the US foreign affairs manual:

To be “in the process of investing” for E-2 purposes, the funds or assets to be invested must be committed to the investment, and the commitment must be real and irrevocable…9 FAM 402.9-6(B)(d.)

The classic example of investment funds that are not at-risk involves uncommitted funds that are sitting in a company bank account. The manual explains…

…Mere intent to invest, or possession of uncommitted funds in a bank account, or even prospective investment arrangements entailing no present commitment, will not suffice. 9 FAM 402.9-6(B)(e.)

So the $50,000 uncommitted in the account did not constitute an investment.

What About the Truck and Tools?

In preparation for the application, this guy created a business plan that explained why the truck and tools were necessary for the business. And he provided some evidence regarding their value. Nonetheless, the value of this equipment did not count.

Why not?

The value of the truck and tools weren’t counted because these items remained in Canada. The manual gives us guidance on this as well. It says…

The amount spent for purchase of equipment and for inventory on hand may be calculated in the investment total. The value of goods or equipment transferred to the United States (such as factory machinery shipped to the United States to start or enlarge a plant) may be considered an investment…9 FAM 402.9-6(B)(g.)

The key word here is “transferred.” So, the mistake was that the equipment remained in Canada.

What Are The Key Takeaways?

Hire a lawyer or fully educate yourself. People who are much smarter than me hire me all the time since they want an experienced guide who will help the process run smoothly. And they don’t want to invest tons of time in learning everything that they need to know. If you’re going to apply on your own, be prepared to really dive into the requirements and process to avoid errors that can cost you a ton of time.
Be prepared to make a commitment. The US government wants to see action, not mere plans. Uncommitted funds in a bank account won’t cut it. They want evidence that you have spent the money that is required to launch your business and make it successful.
The FAM is your friend. Whether you decide to hire a lawyer or not, it is wise for all E-2 visa applicants to review the section in the Foreign Affairs Manual that lays out the requirements for the E-2 visa. Since this manual was created by the US government, it gives you insight into the decision making process.

Regarding the guy who contacted me about his refusal, the FAM contained all of the key info that could have led him to a successful application. If he would have transferred his property to the US and actually spent some of the $50,000 he would probably already be in the US running his general contracting business instead of waiting months for another interview.

Conclusion: Why Was This E-2 Visa Refused?

So there you have it, hopefully this is helpful. This information is intended to be general in nature and is not intended as legal advice. If you are interested in the E-2 visa, I encourage you to reach out to one of the many amazing immigration lawyers that you can find across the globe.

Thanks for your time!