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What is an E-2 Investor Visa to the United States?

By January 8, 2018October 24th, 2024No Comments

By Eduardo Ayala.

An E-2 investor visa is a visa for citizens of certain countries to come to the U.S. to invest money in a business.

To be eligible there must first be a โ€œtreaty of commerce and navigationโ€ between the United States and the country of the foreign national.[1] For a list of treaty countries check the Department of State website list at https://travel.state.gov/content/travel/en/us-visas/visa-information-resources/fees/treaty.html.

At least 50 percent of the business must be owned by the nationals of the treaty country.[2] The foreign national must be seeking temporary entry. In this sense, โ€œexpression of an unequivocal intent to return [abroad] when the E status ends is normally sufficient, in the absence of specific indications of evidence that the alienโ€™s intent is to the contrary.โ€[3] The E visa applicant is not required to show intent to remain in the US โ€œfor a specific temporary period of timeโ€ or to show maintenance of a foreign residence.[4] The foreign national may โ€œsell his or her residence and move all household effects to the United States.โ€[5]

An E-2 treaty investor may be admitted โ€œsolely to develop and direct the operations of an enterprise in which he has invested, or of an enterprise in which he is actively in the process of investing, a substantial amount of capital.โ€[6] The US enterprise must be bona fide.[7]

When adjudicating an E-2 visa application, consular officers have to confirm that: (1) the requisite treaty exists, (2) the individual and/or business possess the nationality of the treaty country, (3) the visa applicant invested or is actively in the process of investing, (4) the business โ€œis a real and operating commercial enterpriseโ€, (5) the visa applicantโ€™s โ€œinvestment is substantialโ€, (6) the visa applicantโ€™s investment โ€œis more than a marginal one solely for earning a livingโ€, (7) the visa applicant โ€œis in a position to develop and direct the enterpriseโ€, (8) the visa applicant โ€œintends to depart the United States when the E-2 visa status terminatesโ€[8]

Critical elements are that the investment must be (a) real, (b) substantial and (c) bona fide.

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(a) That the investment must be โ€œrealโ€ means that the E-2 investor must have already or be โ€œactively in the process of investingโ€ capital for a US enterprise.[9] โ€œInvestmentโ€ is when the investor places capital (funds and other assets, not obtained from criminal activity) at risk to generate profits.[10] The investor must: (1) possess and control the funds; (2) put the investment capital at risk; and (3) irrevocably commit the capital to the E-2 enterprise.[11] โ€œIt is important to provide proof of actual purchases and/or signed contracts and leases related to the enterprise, not just wire transfers to a US account.โ€[12]

To show that the investment is real the applicant must show that he has possession and control of the funds or assets.[13] Possession of the funds may be demonstrated by bank statements and bank transfers with the foreign national named as the owner.[14] The source of the funds should be lawful.[15]

The investor must show also that the funds are at risk. On this the Department of State has said:

โ€œThe concept of investment connotes the placing of funds or other capital assets at risk, in the commercial sense, in the hope of generating a financial returnโ€ฆ. If the funds are not subject to partial or total loss if business fortunes reverse, then it is not an โ€˜investmentโ€™ in the sense intended by [the statute]โ€ฆ. In short, at risk funds in the E-2 context would include only funds in which personal assets are involved, such as personal funds, other unencumbered assets, a mortgage with the alienโ€™s personal dwelling used as collateral, or some similar personal liability.[16]

The investor must also irrevocably commit the capital. This means that the investment must not be โ€œspeculativeโ€ or unsubstantiated.[17] Mere intent to invest, or possession of uncommitted funds in a bank account, are not enough.[18]

(b)ย The investment of capital or assets must be โ€œa substantial amount โ€ฆ as distinct from a relatively small amount of capital โ€ฆ solely for the purpose of earning a living.โ€[19] To determine whether the investment is substantial DOS uses the โ€œproportionality test.โ€ The test focuses on comparing the amount of funds invested vis-ร -vis the cost of establishing the business.[20] DOS guidance says that โ€œ[n]o set dollar figure constitutes a minimum amount of investment to be considered โ€˜substantialโ€™ for E-2 visas purposes.โ€[21] Instead the inquiry considers the proportion between the two figures: the amount actually invested and the value of the business.[22]

The investment cannot be โ€œmarginal.โ€ โ€œA marginal enterprise is an enterprise that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family.โ€[23] In other words, the business must create employment for people other than the investor and his family, and must make a significant economic contribution as a business. โ€œThe projected future capacity should generally be realizable within five years from the date the alien commences normal business activity of the enterpriseโ€[24]

(c) The investment must be Bona Fide. It โ€œmust be [an] active commercial or entrepreneurial undertaking, producing some service or commodity,โ€[25] which operates for the purpose of earning a profit.[26] It must comply with โ€œapplicable legal requirements for doing business in the particular jurisdiction in the United States.โ€[27]

The E-2 visa applicant must also establish that he or she โ€œdoes or will develop and direct the investment enterprise,โ€[28] The executive or supervisory scope of the visa applicantโ€™s activities may be demonstrated by providing evidence of control over the enterprise based on ownership of at least 50 percent of the E-2 business; or โ€œoperational control through a managerial position or other corporate device.โ€[29] If the E-2 enterprise is a franchise, direction and development may be met if the investor will have authority to hire and fire employees, determine pay scales, and establish the hours of business.[30]

If you are or know someone from a treaty country that is interested in an E-2 Investor visa, email Eduardo Ayala at eayala@ayalalawpa.com or call our office at 305-570-2208.

 

[1] INA ยง101(a)(15)(E).
[2] 9 FAM 402.9-4(B);ย AFM 34.2(a)ย andย 34.3(a);ย Matter of Nโ€“Sโ€“, 7Iamp;N Dec. 426 (D.D. 1957).
[3] 9 FAM 402.9-4(C).
[4] Id.
[5] Id.
[6] INA ยง101(a)(15)(E)(ii).
[7] 8 CFR ยง214.2(e)(2)(i).
[8] 9 FAM 402.9-6(A).
[9] 8 CFR ยง214.2(e)(2)(i);ย Matter of Khan,ย 16 I&N Dec. 138ย (BIA 1977).
[10] 8 CFR ยง214.2(e)(12).
[11] 9 FAM 41.51ย 402.9-6(B).
[12] โ€œAILA Rome District Chapter Updates from U.S. Embassy, Londonโ€ (Oct. 17, 2008), AILAย Doc. No. 08102850.
[13] 8 CFR ยง214.2(e)(12).
[14] Matter of Lee,ย 15 Iamp;N Dec. 187ย (Regโ€™l Commโ€™r 1975).
[15] โ€œAILA Liaison Report from the CSC Stakeholder Meetingโ€ (Oct. 27, 2010), AILAย Doc. No. 10112462; โ€œCSC Stakeholders Meetingโ€ (Apr. 28, 2010), AILAย Doc. No. 10062988ย (USCIS โ€œis concerned about funds being obtained via a lawful meansโ€).
[16] ย 9 FAM 402.9-6(B).
[17] Matter of Lee,ย 15 Iamp;N Dec. 187ย (Regโ€™l Commโ€™r 1975).
[18] 9 FAM 402.9-6(B).
[19] 8 CFR ยง214.2(e)(2)(i);ย AFM 34.3(a)ย (โ€œThe E-2 enterprise (company, corporation, etc.) must involve the investment of a substantial amount of capital, rather than a marginal investment solely for the purpose of earning a living for the investorโ€).
[20] 9 FAM 402.9-6(D).
[21] Id.
[22] Id.
[23] 9 FAM 402.9-6(E);ย 8 CFR ยง214.2(e)(15).
[24] Id.
[25] 9 FAM 402.9-6(C).
[26] 8 CFR ยง214.2(e)(13).
[27] Id.
[28] 8 CFR ยง214.2(e)(16);ย 8 CFR ยง214.2(e)(2)(ii).
[29] 8 CFR ยง214.2(e)(16).
[30] Matter of Kung,ย 17 Iamp;N Dec. 260ย (Commโ€™r 1970).

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