While the L-1A visa remains a popular investor visa, it has one major limitation: it requires that for at least a year of the last three, the applicant occupied an executive or managerial position in a business outside the US. For those individuals who are seeking investor visas to the US, but do not satisfy the L-1A requirement concerning employment as an executive or manager in a company outside the US, there may be other options available. One such option is the E-Visa, which can be subdivided into two varieties: the E-1 Visa for Treaty Traders and the E-2 Visa for Treaty Investors.
Both the E-1 visa for Treaty Traders and the E-2 visa for Treaty Investors are treaty-based visas, meaning that in order for an applicant to be eligible for the visa, his or her country of citizenship must have entered into a certain type of treaty with the United States. Some countries have a treaty with the US which permits applications for the E-1 and E-2 visa, while other countries may only allow one or the other. Many countries do not have the appropriate treaty with the US at all, meaning that citizens of those countries cannot apply for E-visas, unless they have another citizenship from a country with an E-1 or E-2 treaty. The full list of E-Visa treaty countries can be found on the website of the US Department of State.
In order to be eligible under the E-1 category for Treaty Traders, in addition to having citizenship from a country with a qualifying E-1 treaty, the applicant must demonstrate that he is coming to the US to carry on substantial trade in goods, including but not limited to services and technology, principally between the United States and the foreign country of which he is a citizen or national. As a practical matter, E-1 visa criteria is more difficult to meet than the criteria for the more liberally granted E-2 visas, therefore, to the extent that an applicant’s citizenship makes him eligible to apply for both E-1 and E-2, as a matter of strategy, it is sometimes strategically wiser to apply for the E-2.
To demonstrate eligibility for the E-2 investor visa, an applicant must establish that:
- he is coming to the United States to develop and/or direct the operations
- of an enterprise in which they have invested, or are actively investing,
- a substantial amount of money.
In order to demonstrate that the investor is coming to develop and direct an enterprise/business, the investor will need to establish that he has a controlling stake in the business. Although under certain circumstances a 50% stake may be sufficient, a majority stake is generally advisable.
The regulations require that the applicant’s capital investment be “at risk,” however there are strategies that seasoned attorneys can develop to appease those investors who are hesitant to make an irrevocable financial commitment to a US enterprise prior to knowing whether their visa will be approved. One relatively common practice, is to place the capital investment in an escrow account, with the escrow conditions specifying the release of the capital investment funds only if the E-visa is approved, thus minimizing the risk exposure for the investor. Escrow may also be used as a vehicle not only for the initial capitalization of the US enterprise, but also for the purchase of equipment, furniture, and other items that may be required for the business.
One of the advantages that the E-visa shares with the L-1A is that the law does not specify the minimum capital investment required for the visa. Under the law, the E-2 investment amount must be “substantial.” US immigration authorities interpret “substantial” by applying a set of legally complex rules, however, as a practical matter, with sound legal strategy and a good business plan, capital investment amounts of less than $100,000.00 can form the basis for a successful E-2 investor visa application. The investment must also not be “marginal,” which has been interpreted by US immigration authorities to mean that the income the investor derives from the business should have the present or future capacity to generate more than just the minimal living expenses for the investor and his family. Future capacity can be determined on the basis of a 5-year business plan.
The law also does not specify any limits on the type of business that the E-2 investor must engage in, therefore, the investor is free to select his own industry, ideally, based on the advice of a competent financial advisor who has conducted a market analysis. For an investor who has not previously owned or managed a business, the purchase of an established franchise may be a good option.
The E-1 and E-2 are non-immigrant visas, which do not create a direct path to a green card like the L-1A or the EB-5. The initial period for which an E-2 investor visa applicant is admitted to the United States is up to two years, and the spouse and children under age 21, who are included in the principal investor’s application, are granted permission to remain in the US for the same amount of time. The spouse of the investor receives employment authorization, and can work anywhere; there is no requirement that the spouse be employed at the E-2 business. The children of the investor may attend school.
If permanent residency is the investor’s ultimate goal, the applicant will need to develop a long-term strategy with his immigration lawyer, which may involve a combination of the E-2 with other visas or statuses. To learn more about E-1 visas for Treaty Traders or E-2 visas for Treaty investors, call 407-705-3345 to schedule a consultation with one of our award-winning Orlando investor immigration attorneys.