Getting Started With The E-2 Treaty Investor Application

Davis & Associates is a Trusted Advisor for E-2 Treaty Investor applications. The vast majority of our cases are successful, which demonstrates that we have the tools, knowledge and experience to help you maximize your chances for success.

The E-2 treaty investor visa is a nonimmigrant classification intended to bolster commerce between the United States and other nations with which it engages in trade through the admission of certain foreign nationals who invest a substantial amount of capital in a business in the United States.

In this guide we provide an overview of the E-2 classification, including who is eligible to apply, required documentation and evidence, capital investment requirements, and organizational preparations you’ll need to make in order to obtain E-2 investor visa approval.

Eligibility

To be eligible for an E-2 treaty investor visa, you must be a citizen of an E-2 treaty country. A treaty country is one that engages in a sustained treaty of commerce with the United States. These countries include France, Spain, Germany, Jamaica, United Kingdom, Ukraine, Italy, Mexico, Cameroon, Netherlands, Australia, Egypt, and Costa Rica, to name a few. You can find an exhaustive list of treaty countries on the website of the U.S. State Department.

It’s important for you to know that if you attained treaty country nationality by means of a financial investment, United States Citizenship and Immigration Services (USCIS) may require you to prove that you have continuously lived in the treaty country you represent for a minimum of 3 years during any time before you applied for E-2 classification in the U.S.

Evidence That You Are an Investor, and the Source of Your Investment Funds

Financial documentation to prove you are an investor can include:

1. Proof of real estate ownership in your name, anywhere in the world
2. Personal bank account statements, anywhere in the world
3. Proof of business ownership, however small the interest, anywhere in the world, with documentation relating to the success of the business (i.e. employee records, financial statements, photos of premises, lease agreements/property ownership documents, etc.)
4. Proof of any other assets, such as retirement accounts, vested pensions, stocks, bonds, or other paper asset ownership

You will need to provide proof of the source of your funds for the E-2 investment and show that you have acquired the capital lawfully. Whatever funds you will be investing to qualify for the E-2 must be documented back to the source. This means that all real estate transactions, bank statements, business financials, etc. will need to be provided.

Start-Up Capital and Marginality

To work with Davis & Associates, the start-up capital investment amount must be at least $100,000, which you must have already invested or be actively investing. You cannot simply have funds in the bank with the intent to invest, or have potential investment arrangements without a financial commitment.

Be aware that the $100,000 should not be your entire net worth. You will need to also show that you have other sources of income to provide for your living such that the U.S. business operation is a true investment rather than just an income stream. If you are considering how much income you will take out of the E-2 business operation, you may find it difficult to be successful with the application. You should think of it in terms of a return on investment.

The reason that this matters is because you must prove that your E-2 business is more than a “marginal” business. A marginal business is one that is incapable, either presently or in the future, of generating income beyond the provision of minimal living for you and your family. That means the expected returns of your business must exceed a living wage, or they must be one additional piece to an already productive investment portfolio of assets throughout the world. You must be able to show that the returns you expect from your E-2 investment will far exceed your normal living expenses—generally within 5 years from the time you begin business activity. Or you must demonstrate that you have other sources of income to provide for your living. These sources can include:

• Additional cash not expected to be invested in the E-2 business
• Income-producing assets, such as a business or real estate
• Pension payments

Davis & Associates will need documentation to prove the availability of other income streams or resources to provide for you and your family’s living while in the U.S. as an E-2 investor.

Organizational Preparations

Forming a Legal Entity Here in the U.S., and Obtaining a Tax ID

Before we can file the E-2 application, you must form a company here in the U.S. The most common options are a corporation (Inc.) and a limited liability company (LLC). Either works fine for E-2. You must speak with a CPA to determine which option works better for you and your business plan.

Davis & Associates also recommends that you own at least 51 percent of the E-2 business entity. The law states that ownership can be 50 percent to qualify, but that percentage of ownership raises the question as to whether you really need to be in the U.S. to run the business, since you have a partner who has equal authority. The law makes the same case in instances when the investor has equal partnerships with a collection of other owners. Equal partnerships with multiple partners wouldn’t grant any of the parties involved control based on ownership. With 51 percent ownership or more, however, control is not an issue and you can easily justify your need to be in the U.S. to manage and control the business to success.

We can connect you with our trusted providers for business formation and tax ID services if you don’t already have someone who can help you.

Opening a U.S. Bank Account for the Business

After the company is formed and a tax ID is obtained, you will now need to open a U.S. corporate bank account for the company.

Identifying the Business You Plan to Build or Buy

The business operation itself can be anything you would like, as long as the start-up capital investment is at least $100,000.

Your business has to be a bona fide enterprise, which means it must be a real and active entrepreneurial or commercial enterprise and produce a service or commodity. If your investment will be your own idea that you are planning to establish from scratch, you must prove that it will produce a service or commodity, and not simply be a paper organization or a passive speculative investment that you will hold for its potential to appreciate—like an undeveloped parcel of land or stocks. You must open and run a business. Your investment must be for profit and put at risk, meaning that if the enterprise fails, you may incur a loss.

Some businesses our clients have successfully pursued in the past are:

• Enterprises in food service—fast food, fast-casual, restaurants, snack shops
• Convenience stores/gas stations
• Print shops
• Car dealerships
• Retail stores and mall kiosks—including jewelry, perfumes, beads, handbags, accessories, cell phone accessories, cell phone services, etc.
• Import and wholesale distribution
• Construction
• Franchises of all kinds

It’s important for you to know that you cannot reserve some of the $100,000 investment for operating expenses and/or payroll. The entire $100,000 must be fully invested or in the process of being invested at the time of filing the E-2 application.

Securing a Premises

Before we file the case, you must have the premises secured for the business operation. For example, if you are starting a smoothie shop franchise, you must identify and have either a lease or at least a letter of intent with a landlord for a suitable space to operate the business you have in mind. 

Creating Your Business Plan

The most valuable piece of evidence in the E-2 application submission is the business plan. We have relationships with excellent service providers to help with this requirement. You’re welcome to use whomever you would like for the business plan, including software programs that can help you do it yourself, but we recommend you work with one of the companies we regularly use for that purpose.

At a minimum, the business plan must include the following:

• An explanation about who you are as an investor
• An overview of the business idea
• A feasibility study for the area in which you intend to operate
• An execution plan, including operations, marketing and administration
• A hiring plan for 5 years. Ideally, you would have at least 2 to 3 employees in the first two years
• Financial projections for 5 years

As you can see, there is a lot of effort that goes into preparing and submitting an E-2 filing. Other documents, in addition to those outlined above, will also be needed. This summary covers the most important elements of the E-2 process.

Filing for the E-2 Visa

If you’re currently inside the United States in a lawful nonimmigrant status, Davis & Associates can help you apply for a change of status to an E-2 classification by filing all of the necessary paperwork, documentation, and evidence with USCIS. Our firm can also help manage changes of status for any potential employees who are in the U.S. with a lawful nonimmigrant status.

If you’re located outside the U.S., you won’t be able to apply for E-2 classification with USCIS. You will need to apply with the United States Department of State at a U.S. consulate or embassy in your country. Your submission package to the Department of State should include: the nonimmigrant visa application (DS-160), a copy of your passport, two color photos, and business documentation—including a business plan, licenses, registration, bank statements, and lease agreements.

Davis & Associates can help steer you through this process.

Do You Need to Talk to an Attorney About Becoming an E-2 Treaty Investor?

If you’re in the United States in a lawful nonimmigrant status and you’re interested in becoming an E-2 investor, we are here to help. Contact us today to schedule a free consultation to discuss your investment options with a Davis & Associates attorney. We look forward to helping you with your E-2 journey.