Introduction: Family Loans and the E2 Visa Investment
People understandably ask a lot of questions about the E2 Visa Investment. How much of an investment do I have to make? Can the money come from a loan? How do I show that I lawfully obtained the money? It is wise to ask your E2 visa lawyer such questions before making your E2 Visa Investment.
In this post, I address one question that business immigration lawyers are commonly asked. We are frequently asked if loans from family members can work for E2 purposes. The good news about such loans is that they can be a permissible source of your E2 Visa investment. However, there are some things that you need to know about family loans before deciding if you want to use them.
Source of funds used for the E2 Visa Investment
All E2 Visa applicants should know that the source of your funds will be scrutinized. The US government is concerned about illegally obtained money being used to open businesses in the US. Therefore, you will have to clearly show where your money came from during the E2 Visa application process. Many of my clients will demonstrate the origin of their money by showing that the funds came from the sale of a business. Others will use tax records to show that they earned the money through employment. In the case of a loan, you will have to show the origin of the lender’s money.
Family members must show the source of the loaned money
Family members who loan you money for your E2 Visa investment will be subject to the same scrutiny that applies to you as the principal applicant. This raises the question: Is your family member comfortable with this? They likely think that they are already doing you a huge favor by lending you the money. Perhaps they value their privacy. Maybe they feel that it is demeaning to have to prove that their money was lawfully obtained. Whatever the case may be, you would be wise to discuss these realities with your family members at the beginning of the process.
Loan Conditions: Potential Problems
In addition to demonstrating the source of the loaned funds, you will also have to make sure that your loan is permissible for E2 visa purposes. The loan can be unsecured. It can be secured by personal assets. However, it can not be secured by assets of the E2 business.
Jointly held funds
Anyone who applies for an E2 investor visa has to demonstrate that they have possession and control of the funds that are being used to establish the business. Occasionally, E2 Visa applicants run into problems when the money is held in a bank account with other family members. A consular officer may question whether money held in a joint bank account is under the sole control of the applicant. In order to avoid confusion you should take some additional steps. For example, you could have the joint owners confirm by a sworn affidavit that their interest in the funds are intended to be a gift or a loan. This could clear up confusion and avoid a delay or a denial.
Loans from family members are oftentimes used for E2 Visa investments. However, there are some issues that you need to be aware of before utilizing such funds. This is best accomplished by working with a knowledgeable immigration lawyer who can help you avoid unnecessary headaches during your E2 Visa journey.