Using a Gift for the E-2 Visa Investment

In this video, we discuss the intriguing possibility of using a gift to secure an E-2 visa and illustrate this concept with a recent real-world case.

One frequently asked question in my practice is whether one can use gifted funds for the E-2 visa. Put simply, can someone gift you money that you, in turn, invest in a business to qualify for the E-2 visa? The answer is a resounding “yes” – you can indeed leverage a gift as part of your E-2 visa application.

Guidance From the Foreign Affairs Manual

To shed light on this topic, let’s refer to the relevant section of the Foreign Affairs Manual that discusses E-2 investments. It says…

The source of the investment may include capital assets or funds from savings, gifts….or other legitimate sources.

However, there are some important things to bear in mind when contemplating the use of gifted funds for your E-2 visa investment.

A gift doesn’t absolve you from proving the source of the funds. You must demonstrate the origin of the gifted money; a simple claim of receiving funds from a friend or relative won’t suffice. You must trace the source of their funds, which they subsequently gifted t you.
Documentation is key. At a minimum, my clients present a formal gift letter. If the giftor is obligated to report the gift on their tax return, my clients will present the tax return as proof of a legitimate gift.

Now, let’s explore how this works in practice. Frequently, I use gift letters when one spouse contributed most of the funds used by the other spouse, who is the primary E-2 investor. Or, in some cases, different family members may provide gift funds for the investor’s use, as demonstrated in the following case.

Case Study: Using a Gift for the E-2 Visa

Recently, I handled an E-2 visa application for a delightful family from Australia. The wife, who was the intended investor, had a mother in the United States who wished to retire from her daycare business. The mother wanted to gift her daughter $60,000 for investing in the business. I must admit, initially, I had some concerns.

The US Citizen Mother: One concern revolved around the mother’s U.S. citizenship. The E-2 visa application process necessitates showing intent to depart the U.S. at the end of E-2 status. Would the mother’s U.S. citizenship complicate matters?
Optics and Legitimacy: My second concern centered on how the consular post would perceive this situation. Would they view it as a legitimate gift?

Keys to Success

Although, I had some concerns, we attempted to demonstrate the legitimacy of the situation by focusing on the following:

We meticulously documented the gift with a formal gift letter and a sworn declaration from a certified public accountant explaining that he discussed the reporting obligations with the mother who fully intended to declare the gift on her next tax return.
To reinforce the legitimacy, the majority of the gifted funds were immediately invested in the business, specifically in much needed improvements and equipment.
We emphasized the investor’s over-a-decade experience in childhood education in Australia, showcasing her suitability to run the daycare.

So, what was the outcome? In the end, the investor and her family received approval for their E-2 visa. Now, the U.S. citizen mother can retire, and my clients embark on an exciting new chapter in the U.S.

Conclusion

While I’m thrilled with this success story, it’s essential to note that this example isn’t intended as advice on replicating the exact scenario. Each case is unique, influenced by various variables that can tip the scale toward approval or denial. Thus, I strongly recommend consulting with an experienced E-2 visa lawyer who can tailor advice to your specific circumstances.

Thank you for your time!