Central to your application for a US E2 visa is that you have invested a ‘substantial’ amount of money into a new or existing US business. Unlike the EB5 Investor Green Card, there is however no fixed or arbitrary E2 visa minimum investment threshold to work to. The minimum level of investment is subjective and assessed relative to the E-2 company.

While this approach creates a degree of flexibility that accommodates different types of business, it also creates significant uncertainty for applicants when attempting to build a robust, compelling and ultimately successful application. And since applicants must by the time of filing their petition have already made sufficient at-risk investment, the stakes become even higher to ensure you are working to a level of E2 visa minimum investment that will be deemed ‘substantial’.

A substantial investment is one that is sufficient to ensure the investor’s commitment to the successful operation and development of the enterprise by its proportion to the total cost of the business.  The investment cannot be marginal, and must have the capacity to generate more than a minimal income.

 

Is there an E-2 visa minimum investment amount?

 

There is no single, arbitrary E-2 visa minimum investment amount. The E2 visa is applied for in the US Embassy in your home country (with some exceptions), and while there is statutory and regulatory guidance, much is left up to the discretion of the immigration officer and his or her interpretation of the rules as it applies to your situation. Still, there are a few guidelines on whether your investment/business will meet the standards.

The question that comes up for those seeking this visa is what qualifies as a ‘substantial investment’ and how to meet the criteria with certain types of expenditures. The intention behind this requirement is that the business is not speculative and has a high chance of success.

Under the relevant guidelines (See 9 FAM 402.9-6(D)) an investment of a substantial amount of capital for E2 visa purposes constitutes an amount that is:

 

• Substantial in a proportional sense;
• Sufficient to ensure the treaty investor’s financial commitment to the successful operation of the enterprise; and
• Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise.

 

Determining your E-2 visa minimum investment

 

When considering the level of investment, ensure you take into consideration all aspects of the company, its costs and operations.

There will naturally be considerable variation between different types of business, which is accounted for under the proportionality of the requirement. When formulating your investment threshold, the guidelines cite examples of manufacturing businesses requiring larger initial capital for machinery, premises etc compared to a consultancy practice needing far less initial set up costs.

Remember, this all has to be underpinned by the requirement on the investor(s) to demonstrate sufficient personal, financial risk. Small-scale businesses must also show sufficient degree of risk to confirm to the adjudicator that the investors will be motivated to really want to make the enterprise a success.

The specifics will be determined largely on the status of the company – if you are a start-up and require funds to set up and become operational, or whether you are purchasing an established company and are looking at purchase price as well as ongoing costs.

Consider costs such as premises, equipment purchase or hire, professional adviser fees, IP-related costs, admin costs such as incorporation and marketing and promotional activities. Take a forensic approach to identify and itemize your costs, ensuring the resulting level of investment is based on a 360 degree perspective of the company and what its financial needs are to become a viable and successful enterprise.

 

Is there enough of a financial commitment to get the business up and running?

Investors must demonstrate a strong financial commitment and provide a clear indication that the expenses incurred will bring the business to the point of being operational. There are two basic categories of expenditure that can be used to show strong financial commitment, depending upon whether you are starting a new business or purchasing an existing company.

 

New business start up costs 

 

There are many different expenses that you can use as part of the initial investment, and they don’t all have to be paid in the United States, as long as all payments are made using the investor’s own funds. Here are a few examples of allowable expenses:

 

• Pre-paid leases, equipment purchases, inventory;
• Office expenses, furniture, computers, software;
• Legal fees, professional fees, business set up and registration costs, licenses;
• Advertising, marketing, trade show expenses;
• Rights to intangible property (such as the value of an invention or industrial design or a software product).

 

A small amount of funds in a US bank account can also be added to the list of qualifying expenses, as long as other expenses have been committed. This cash is meant to be used as working capital to cover salaries and everyday operating expenses for the business.

Some investors ask whether funds in an account in anticipation of visa approval is enough to satisfy the requirements. In the start-up E2 context, funds in a bank account alone would not satisfy the substantial investment test and the investors must incur all other necessary expenditures to satisfy the test.

All expenses must be meticulously documented through invoices, receipts, and bank records.

 

Purchase price of existing business

 

If you are buying a business in the United States, the purchase price alone will form a significant part of your investment. Other expenses incurred should also be included (such as professional fees and fees for office premises) but the focus will be on the purchase price. The funds for the purchase of the business must be placed in an escrow account in the United States, to be released upon the successful approval of the investor visa by the US Embassy. We advise our small business investor clients to find a business in the purchase price range of $100,000 – £150,000 (at a minimum). Anything less may not show a strong enough commitment.

 

Percentage of investment

 

According to the FAM, “the amount invested in the enterprise must be compared to the cost (value) of the business by assessing the percentage of the investment in relation to the cost of the business. The proportionality test can best be understood as a sort of inverted sliding scale. The lower the cost of the business the higher a percentage of investment is required.” 9 FAM 402.9-6(D)f.

It will be important to ensure the percentage of investment per investor applicant is substantial in and of itself. A sliding scale will be applied in consideration of the investment amount in relation to the value/cost of the business. As an outline guide, the lower the investment amount being made by an E2 applicant, the higher the ownership percentage should be. This will require a strategic assessment of all the investments where there are multiple E2 applicants to ensure each meets the requirement individually without impacting the eligibility of the other investors in the E2 company.

For example, a consulting firm with few employees and an investment of $200,000 might need to spend 100% of the investment, while a $50 million manufacturing business could qualify with a fairly low percentage spent upfront. The investor should be mindful of the fact that a lower investment in a larger business may not be sufficient to satisfy the nationality test under 9 FAM 402.9-4(B).

 

Size of Investment vs. Other Factors

 

Although there is no specific cash threshold amount to qualify for the E-2, our view is that $100,000 should be the target figure for a start-up business. That is to say, the list of all expenditures related to the set-up of a new US company, when added up, should be in the ballpark of $100k.

That said, if the investors have secured high-value contracts in the United States, this could off-set a lower upfront cash investment. For example, if a financial services company was seeking to establish a US office, the investors may only need $50k to get the business up and running. This is far less than our 100k ballpark, however, if the investors can demonstrate that the purpose behind setting up in the US is to service a large contract valued at hundreds of thousands of dollars, then the need for a large amount of capital may not be as essential.

If the investor seeks a loan through a third party, we suggest that at least 75% of the investment should include the investor’s personal assets. This means that there is some direct risk to the investor, rather than relying heavily on unsecured credit guarantees, loans or mortgages. If the investor is taking funding in exchange for shares to the outside investor, then the analysis would change entirely depending upon the nationality of the outside investor and that party’s involvement in the business. That particular discussion is outside the scope of this piece.

 

You must be in possession of the funds

 

Further to setting your level of investment, you must also ensure the E2 company is in possession of the investment funds and that the capital invested is irrevocably committed to the enterprise and subject to partial or total loss in the event that the entity fails.

The funds invested must primarily derive from corporate earnings. Additionally, the invested funds must be substantial in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise.

 

Proof of source of funds

 

The foreign company must be able to provide the source of funding with documentary evidence showing a clear and legitimate path regarding the source of capital it will be investing.

 

Need assistance?

 

When building your E2 visa application, it’s not just a matter of presenting the facts, you will also need to provide and present sufficient context and detail relating to your business, its operations, costs, market place and projections in order for the adjudicator to make a full and informed assessment of your eligibility and the viability of your business to go on and fulfil the E2 requirements.

NNU Immigration specialize in the US E2 visa. Our experienced US immigration attorneys work with investors and entrepreneurs from across the globe to make the move into the US market through the E-2 visa route.

We can advise on suitability of the E-2 visa for your needs and circumstances, and guide you through the application process to ensure you present a robust and comprehensive business plan and submission to best represent you and your investment opportunity.

We can also support with applications for E-2 spouse and dependants.

Contact us for advice with your E-2 investor visa application.

 

E2 Visa Minimum Investment FAQs

 

What is the minimum investment required for an E2 visa?

The US does not specify a fixed amount, but the investment must be substantial and sufficient to ensure the success of the business.

 

What qualifies as a substantial investment?

A substantial investment is relative to the cost of the business. It must demonstrate the investor’s commitment and ability to make the enterprise operational.

 

Can I use personal savings for the E2 visa investment?

Yes, personal savings can be used as long as you can prove the funds are legally obtained and under your control.

 

Are loans allowed for the E2 visa investment?

Loans secured by your personal assets are allowed. However, loans secured by the business itself may not qualify as a valid investment.

 

Does the investment need to be made before applying for the E2 visa?

Yes, the investment must be at risk and actively committed to the business before or during the application process.

 

Can I invest in a startup for the E2 visa?

Yes, investments in startups are allowed, but you must demonstrate that the business has a viable plan for generating income.

 

What types of businesses qualify for an E2 visa?

Almost any legitimate business qualifies as long as it is active, for-profit, and has the potential to generate significant economic impact.

 

Is there a residency requirement for E2 visa holders?

E2 visa holders must maintain an intention to leave the US after their visa status ends but are not required to live in the US full-time.

 

Glossary

 

Term	Definition
E2 Visa	A nonimmigrant visa allowing individuals from treaty countries to invest in and operate a business in the US.
Substantial Investment	An amount of capital considered sufficient to ensure the success and operation of a business in the US.
Treaty Country	A country with which the US has a treaty of commerce and navigation, making its nationals eligible for the E2 visa.
Personal Savings	Funds owned by the investor that can be used for the E2 investment, provided they are legally obtained.
At-Risk Investment	Capital that is actively committed to a business venture and subject to potential financial loss.
Loan Secured by Assets	A loan backed by the personal assets of the investor, which can be used as part of the E2 visa investment.
Startup Business	A new business venture that qualifies for the E2 visa if it has a viable plan to generate income and employment.
For-Profit Enterprise	A business with the primary goal of generating revenue, required to qualify for the E2 visa.
Economic Impact	The business’s potential to contribute to the US economy through income generation and job creation.
Intent to Depart	The requirement that E2 visa holders plan to leave the US when their visa status ends.