THE E-2 VISA—A Great Option for Startups& Entrepreneurs
I practice immigration law because I am consistently impressed by the accomplishments of American Immigrants.
Out of all the amazing immigrants that we are lucky to have, immigrant entrepreneurs stand out as a particularly inspiring group. American immigrant entrepreneurs oftentimes arrive in the United States with limited means, overcome numerous hurdles and establish innovative businesses that employee thousands of people.
A jaw dropping 40% of Fortune 500 companies were founded by immigrants or children of immigrants.
Foreign born founders of American businesses include Sergey Brin of Google, Pierre Morad Omidyar of Ebay, Jerry Yang of Yahoo and Elon Musk of Tesla. In addition to these big names, there are a number of smaller innovative businesses that can credit foreign born founders for their success.
There are a number of ways in which an entrepreneur can come to the United States to launch or expand an existing business.
Below, I discuss one such option, the E2 visa.
What is the E-2 Visa?
The E-2 Visa is a non immigrant visa that enables foreign nationals of certain countries to live in the United States while they operate a business.
What are the Advantages of the E-2 Visa?
The benefits of the E-2 visa include:
- The ability of the investor/business owner and his or her spouse to remain in the United States as long as the business continues to operate;
- There is no set minimum amount for the E-2 visa;
- The investors’ foreign born children under the age of 21 can live in the United States and attend school on the E visa;
- The spouse of an E-2 Visa investor/business owner may apply for work authorization
What are the Drawbacks of the E-2 Visa?
The main drawback of the E2 visa relates to its nature as a non dual intent visa. This means that the visa is temporary in nature and does not create a direct path to lawful permanent resident status or citizenship. This oftentimes creates difficult situations for E-2 investors who want to establish lasting roots in the country.
Another drawback is that foreign born children of E-2 visa holders will eventually have to leave the country at the age of 21 unless they can adjust status to a different visa classification.
Finally, the E-2 visa is limited to nationals of countries that have the requisite treaty with the US. You can find the list here.
The Requirements of the E-2 Visa Investment
In addition to the nationality requirement, the founders who seeks an E-2 visa must show that they have previously invested or are currently in the process of investing a substantial amount of legally obtained funds in a business enterprise in the United States.
The investment must be “at risk” meaning that it is subject to partial or total loss.
In addition to the “at risk” requirement, the investment must be shown to be “substantial.” An investment is considered substantial if it is sufficient to ensure the investor’s commitment to a successful business.
The government will also examine the magnitude of the investment in relation to the type of business that is being established as a way to determine the likelihood that the business will be viable.
Finally, the US government will scrutinize the investment to determine if it is marginal. The US government does not want the investment to be sufficient solely to support the business owner/investor and their family. The petitioner therefore has to demonstrate usually through a well crafted business plan that the enterprise is likely to provide jobs in the United States.
The Key Documents for a Successful E-2 Visa Petition
As part of the petition, a cover letter should be submitted which will reference the evidence and provide a forecast of what the evidence will show. A good cover letter will make the adjudicator’s life easier by providing a concise roadmap that will improve the likelihood of an approved petition. The cover letter will describe the company, the position, the beneficiary as well as a description of the investment and an explanation for why it qualifies for E2 visa purposes. Finally, the cover letter should state that the applicant will fill an executive or supervisory role or possess skills essential to the operation of the business.
Behind the cover letter, a successful visa packet will include documents that support the conclusion that the investment and the petitioner qualify for the E2 visa.
Quality documentary evidence is critical to satisfy the US government that the E-2 visa should be granted. In order to establish that the investment is derived from a legitimate source, it is helpful to submit personal income tax records, real estate transactions records, a statement from an accountant regarding net worth etc. The purpose of this evidence is to track the investment amount back to the source to eliminate any concerns that the funds were not lawfully obtained.
In order to prove that the investor has the prerequisite nationality, the packet should include a birth certificate, passport or other official documentation that establishes national origin. For the purpose of establishing that the enterprise is currently running or will be soon the applicant can submit lease, utility bills, invoices issued to clients, photographs of the commercial space or the company’s products, screenshots of the company website, copies of press releases etc. Documents that demonstrate the investment that was made into the entity include bank records, leases, invoices for services or other business expenses.
The Business Plan is Key
All of these documents are important for a successful E-2 application, but perhaps the most critical document for a startup is the business plan. This plan should provide projections for 3-5 years and lay out the purpose of the business, projections, sample clients or partners etc. There are a number of reputable companies that can help you craft a quality business plan that will educate the adjudicator on the specific industry and demonstrate the sufficiency of the investment that has been made into the new enterprise.
Procedures for Applying for the E-2 Visa
After all of the documentation has been gathered, the E-2 Visa applicant will file the application packet with the foreign consulate abroad. Each consulate has their own specific instructions for filing which must be carefully followed. After the packet has been submitted, the applicant can usually expect an interview and decision between 30-120 days after filing.
The E-2 Visa can be a great option for the startup entrepreneur. However, it is important to understand the drawbacks and the hurdles that must be overcome when deciding if the visa would be a good option for you and your family.
If the E-2 is not the right fit for your situation, there are some other options that can be utilized that will enable you to build your businesses in the United States.