E-2 Visa: Everything You Need to Know
The E-2 visa allows a citizen of a foreign country to enter the United States to finance and manage a business.7 min read
2. What Are the Features of an E-2 Visa?
3. What's the Risk in Applying for an E-2 Visa?
4. What Are the Rules for Acquiring an E-2 Visa?
5. What Are the Financing Rules for an E-2 Visa?
6. How Old Is the E-2 Visa?
7. What Are the Requirements for an E-2 Visa?
8. What Types of Transactions Qualify as a Significant Investment?
9. What Are the Differences in the E-1, E-2, and E-3 Visas?
10. How Does the E-2 Visa Compare to the E-5 Visa?
What Is an E-2 Visa?
The E-2 visa allows a citizen of a foreign country to enter the United States to finance and manage a business.
What Are the Features of an E-2 Visa?
People describe the E-2 visa as the next best thing to citizenship, since unlimited extensions are possible. A person with an E-2 visa can live in America for the rest of their life.
The holder of an E-2 visa can stay in the United States as long as they run the company listed on their application. Unlike most visas, the E-2 visa has no true expiration date. The holder doesn't have to keep a home in a foreign country, either.
The first visa lasts for up to five years, but the recipient can ask for extensions over and over again. During first entry into America, the investor is given a period of stay of two years. They can ask for an extension when they need one.
The length of the original visa depends on America's agreement with the investor's country of origin. A new company will have a shorter duration for its visas. The government wants to study whether a business is trying to succeed. Some people start fake businesses to buy their way into America. The shorter visa protects the government against such attempts.
The other benefit is that family members are eligible for E-2 visas as well. A spouse and any children considered minors can get one. Only the spouse can ask for a renewal, though. Most states consider someone under the age of 21 as a minor.
An investor can hire co-workers from their country of origin to work in the United States. These employees must meet the same criteria for an E-2 visa.
The E-2 visa is a nonimmigrant visa. It is temporary. For this reason, it's different from a green card through investment. Green card status is permanent. It also requires an investment of at least $500,000. An E-2 visa has no official requirement.
What's the Risk in Applying for an E-2 Visa?
The applicant must prove they already have a financial stake in a company. They can't apply until they've already invested money into the company. Should the federal government reject the E-2 visa application, the investor cannot enter the United States. They don't lose their investment money, but they can't use it as a reason to live in America.
The political climate is also a potential risk. The United States government generally protects E-2 visas to make sure United States citizens in other countries don't face similar issues. Still, a change in government leadership could cause ripple effects on E-2 visa acceptance rates.
Legal analysts believe that even under the Trump administration, the E-2 visa is safer than an H-1B or a TN visa. While there is a risk, the E-2 is the safest bet right now.
What Are the Rules for Acquiring an E-2 Visa?
To qualify, the business owner must live in a treaty country. The United States has trade agreements with more than 70 countries. Anyone from these foreign states can buy an ownership stake in an American business. They can either invest in an existing company or start a new one.
The investor must own controlling interest, but they can have partners.
The federal government does require the person to make a significant investment in the business. While the amount varies, a person can earn an E-2 visa with only $15,000 worth of ownership interest.
Usually, though, it is difficult to get an E-2 visa without an investment of more than $100,000 or $150,000. Visas can be awarded for all kinds of businesses, and each of these businesses could require a different level of investment.
The government considers the investment amount as the capital required for a new business to become operational.
Some companies will require more purchases to become operational than others. Simply owning undeveloped land and business equipment isn't enough to qualify.
The business must demonstrate operating ability. Also, the applicant should own or lease commercial property where they can operate the business.
The applicant must make all required investments prior to submitting the visa form. Adding funds in a business bank account isn't enough to prove commitment in the operation of the business.
The foreign investor has only one choice for a job under the E-2 visa. The holder is only eligible to work for the company that sponsors their application.
The most important rule is that the investor must have a hand in running the company. In most cases, the applicant must show that they'll direct the business. Otherwise, the government will question the need for the person to live in the United States.
What Are the Financing Rules for an E-2 Visa?
An investor doesn't have to pay for the entire purchase at once. They have the right to finance some of the cost. A consular officer will decide the amount. Generally, financing 25 to 30 percent of the purchase price is OK.
The percentage amount a buyer can finance increases with the cost of the business. Someone buying $1 million worth of a company can finance a larger percentage than someone buying $100,000.
How Old Is the E-2 Visa?
This type of visa is one of the oldest in America. Its roots go all the way back to a treaty signed at the end of the War of 1812. The details have changed over the years, but the premise remains the same.
The American government wants to encourage commerce. One of the best ways to do this is by offering strong incentives to foreign investors. The E-2 visa lets someone come to the United States and run a business.
What Are the Requirements for an E-2 Visa?
The applicant for an E-2 visa must meet the following criteria:
- Live in a country that has a trade agreement with the United States
- Plan to live in America while working for a company where the applicant has a 50 percent ownership interest
- Have a title that indicates ownership or executive-level employment in the company
- Have a substantial financial stake in the American business
- The company must have legal standing in its state of operation
- Promise to leave the country once they've finished with their business
A couple of exceptions are available to applicants. People who can't afford to buy 50 percent of a company can still apply. They need to invest in a business that their international countrymen own. The 50 percent stake still applies. The government allows others from the applicant's country to have controlling interest.
The definition of substantial financial stake varies. Most government officials consider the amount in simple terms. The investor must have assets or money at risk in the business. The applicant also needs to prove they're trying to make a profit.
An E-2 holder also has the right to hire employees from their country. These workers must prove they are executives, supervisors, or have highly specialized skills that make them necessary for the job. Regular skilled and unskilled workers are not eligible.
An L-1 visa is an option for workers who cannot qualify for an E-2.
What Types of Transactions Qualify as a Significant Investment?
The government expects the applicant to prove their stake is significant. Acceptable transactions are:
- Business bank account with large balance
- Proof of income
- Business loan secured by applicant's assets
- Unsecured business loan with investor's signature
- Business purchases such as office space and equipment that show assets at risk in the investment
Applicants can try to use the following transactions as proof:
- Personal bank account with large balance
- Loans that have earlier claims, such as mortgage debt
- Loans that aren't secured
Government officials generally reject applications with these forms of proof. The investor isn't doing enough to show significant risk with such transactions.
What Are the Differences in the E-1, E-2, and E-3 Visas?
The E-1 visa is for residents of countries that have substantial trade with the United States. The amount of trade has to justify employment for a large number of people in the United States. Also, it should represent the majority of trade interests.
The E-2 visa is for investors who buy at least 50 percent ownership of a United States company.
The E-3 visa is exclusively for Australians. Residents of this country must come to the United States to hold a job in a specialty occupation. To prove qualified, the applicant must hold the equivalent of a bachelor's degree in the field of the specialty occupation.
How Does the E-2 Visa Compare to the E-5 Visa?
Other options, such as the E-5 green card, require $1 million at a minimum. The E-2 visa is popular due to its affordability. It's only a visa and not a green card, though. Some investors prefer the security of a green card.
A person cannot become a permanent resident with an E-2 visa. They can maintain lawful status as E-2 holders, though. This option can give them time to obtain a green card a different way.
Applying for an E-2 visa comes with risk. You must buy an ownership stake before submitting an application. You'll lose your opportunity to live in the United States if the government denies your application.
The best strategy is to consult with a lawyer to protect your investment. Post your legal need for a respected but affordable attorney at an online marketplace like UpCounsel. This professional will improve your odds of earning an E-2 visa.