The E-2 Treaty Investor Visa Program offers a flexible and viable pathway for aspiring Canadian entrepreneurs and investors looking to establish or purchase a business in the United States. It’s specifically designed for individuals from countries with which the United States maintains a treaty of commerce and navigation, allowing them to invest significant capital in a U.S.-based business. One of the most common questions our Toronto office fields regarding the E-2 visa is: “What is the minimum investment amount required?” This blog will aim to provide additional clarity to readers on this important issue.
Defining the E-2 Visa
The E-2 visa enables nationals of treaty countries to enter the U.S. when investing a “substantial” amount of capital in a U.S. business for which they have a controlling interest. The visa is not only available to the principal investor but extends to key employees, including executives, managers, and specialists essential to the operation.
Minimum Investment Amount: No Fixed Number
Contrary to popular misconceptions, there is no explicitly defined minimum investment amount stipulated by E-2 visa regulations. Instead, the term “substantial investment” is used. While this creates a degree of flexibility, it also requires a clear understanding of what constitutes “substantial.”
Factors Determining Substantial Investment
Several factors influence whether an investment is deemed substantial for E-2 visa purposes:
- Proportionality: The investment must be proportional to the total cost of either purchasing an established enterprise or creating a new one. For lower-cost businesses, a higher percentage of investment is typically required. For instance, if the business costs $100,000, investing $80,000 (80%) might be considered substantial. However, for a business costing $1 million, a lower percentage, such as 50%, may suffice.
- Sufficient to Ensure the Investor’s Commitment: The investment should be sufficient to ensure the successful operation of the enterprise. This means that the amount invested must be enough to capitalize the business and see it through to operations, not just cover initial costs.
- At Risk: The capital must be at risk and subject to partial or total loss if the business fails. This demonstrates the investor’s commitment and intention to develop and direct the business. The classic example of what would not be considered at risk is funds sitting in a bank account, since that money could be immediately withdrawn after visa approval.
- Not Marginal: The investment must generate more than enough income to provide a living for the investor and their family or make a significant economic contribution. A marginal enterprise, which does not have the present or future capacity to generate significant revenue, typically does not qualify. When considering this factor, keep in mind that one of the overarching purposes of the E-2 program is to stimulate U.S. job growth.
Practical Investment Thresholds
While there is no official minimum, historically and practically, it is generally accepted that investments below $100,000 may lead to added scrutiny from the adjudicating Consular Officer. An investment of around $100,000 to $200,000 is generally considered a safer threshold, especially for smaller businesses. Larger businesses with higher startup costs can justify higher investment amounts accordingly.
Case-by-Case Basis
Every E-2 visa application is evaluated on its individual merits. An investor with a well-documented business model, a significant percentage of investment, and a clear strategy demonstrating how the business will be successful and contribute to the U.S. economy will have a stronger case.
Key Takeaways
- There is no fixed minimum investment amount for an E-2 visa.
- The investment must be substantial in proportion to the total cost of the business.
- Investments typically range from $100,000 to $200,000, depending on the nature and needs of the business.
- The investment must place the investor’s capital at risk and should not be marginal.
- E-2 cases come in all shapes and sizes, so each one is unique and evaluated individually, emphasizing the importance of a thorough and well-prepared application.
Conclusion
Navigating the E-2 visa process can be complex, particularly when determining what qualifies as a substantial investment. Potential investors should be always consider seeking legal guidance to ensure their investment meets the necessary criteria and to present a strong case to USCIS or the U.S. consulate they are applying through. By understanding these nuanced requirements, investors can better position themselves for success in securing an E-2 visa and embarking on their entrepreneurial or investing journey in the United States.
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If you are interested in the E-2 Treaty Investor Program or learning more about how Moodys may be able to assist you, please contact us via email at usimmigration@moodystax.com for further information. Our experienced immigration attorneys work steps away from the U.S. Consulate in Toronto and are here to simplify the process and help each step of the way.
