How Much Do I Need to Invest for an E-2 Visa?
One of the first questions prospective E-2 investors ask is: How much money do I need to invest?
The short answer is that there is no fixed minimum investment for an E-2 visa. The investment must be “substantial,” but U.S. immigration law does not specify a particular dollar amount.
Instead, the required investment depends on the nature and cost of the particular business.
What is a “substantial” investment?
An E-2 investment generally must satisfy three requirements:
- The investment must be proportional to the total cost of the business.
- The investment must demonstrate your financial commitment to operating the business.
- The investment must be sufficient to support the likelihood that the business will be successful.
This means that there is no magic number that guarantees E-2 eligibility. An investment that is substantial for one business may not be substantial for another.
For example, a US$75,000 investment might represent a very substantial commitment to a service business with relatively low start-up costs, while the same investment could be inadequate for a business requiring US$500,000 to begin operations.
How much should I plan to invest?
As a practical matter, I generally recommend planning for an investment of approximately US$100,000 or more for an E-2 business.
However, a lower investment can qualify when the circumstances support it. The important question is not simply whether you have invested a particular amount, but whether the amount invested is substantial in relation to the business you are establishing or acquiring.
For that reason, someone considering an E-2 visa should not automatically assume that an investment below US$100,000 is insufficient.
What expenses count as an E-2 investment?
The answer depends on how you are establishing the business.
Purchasing an existing business
If you are purchasing an existing business, the purchase price will generally constitute the principal component of your investment. Other expenditures may also be relevant depending on the circumstances.
Starting a new business
If you are establishing a new business, a wide range of reasonable start-up expenditures can count toward your investment. These may include:
- Rent and leasehold expenses
- Equipment
- Inventory and supplies
- Marketing and advertising
- Franchise fees
- Business formation expenses
- Professional fees, including legal and accounting fees
In some circumstances, it can make sense to incur certain business expenses in advance in order to demonstrate that your investment is genuinely committed to the enterprise. For example, depending on the circumstances, prepaid rent can form part of the investment.
The key is that the expenditures must be real business expenditures connected to establishing and operating the E-2 enterprise.
Certain expenses require greater caution. For example, vehicles may be problematic if they can readily be used for personal purposes. Similarly, ordinary personal travel expenses generally should not be treated as part of the E-2 investment.
When does the money have to be invested?
Another important issue is timing.
Simply transferring money into a U.S. business bank account does not necessarily mean that the money has been invested for E-2 purposes. The funds generally must be committed to the business in a real and irrevocable manner.
For a start-up business, this may mean that you have entered into leases, purchased equipment, paid franchise or professional fees, ordered inventory, or made other expenditures necessary to establish the enterprise.
The precise strategy depends on the type of business and the circumstances of the investment.
What if I don’t have US$100,000?
Don’t assume that you cannot qualify for an E-2 visa simply because your available investment is below US$100,000.
The amount required depends heavily on the business. A relatively low-cost business may support an E-2 application with a substantially smaller investment than a capital-intensive business.
The more important question is whether your proposed investment is substantial in relation to the particular business and sufficient to demonstrate your commitment to making the business succeed.
If you are considering an E-2 investment, I can assess the proposed business, investment amount, and structure and advise you on the strengths and potential problems with the E-2 strategy before you commit your money.
To learn more about E-2 requirements and discuss your proposed investment, schedule a consultation here.