E2 Visas – Top 4 Requirements

1. Marginality Requirement.
2. Develop and Direct: Active Participation Required.
3. Financing an E-2 Investment.
4. Gifts or Inheritance Used for E2 Applications.

Marginality Requirement

In order for an enterprise to be considered marginal, the evidence must show that the enterprise generates significant employment or more than enough to financially support the investor and his dependents, if any. The standard to make a determination as to what level of income is necessary is to look at the annual household income within the enterprise’s home state. Generally, the income from the enterprise must be higher than the household income average. In cases of a new enterprise, it may be best to hold off submitting an E-2 petition until a couple of months of profit can be produced through the enterprise’s balance sheets.

Develop and Direct: Active Participation Required

While the investor does not have to be actively involved in all aspects of the enterprise, the investor still must take part in the decisions that drive the daily operations of the enterprise. As such, a passive investor that simply invests in the enterprise – but does not contribute to the management of the enterprise – will not satisfy the requirements of being in “control” of the enterprise.

Financing an E-2 Investment

When investing in an E-2 enterprise, the regulations allow for a portion of the investment to be financed. The regulations do not specifically state the exact percentage of financing allowed. However the general recommendation is that for investments over $100,000 – not more then 20-30% of the investment should be financed.

In investments less than $100,000 – it is recommended that none or only a small percentage of the investment be financed.

In all cases, it is critical to correctly and carefully document the investment funds pathway.

Gifts or Inheritance Used for E2 Applications

One question commonly asked by potential investors is whether funds obtained through gift or inheritance may be used toward the E2 visa investment. The general rule for E-2 purposes is that any funds or capital used by the investor must be within his “possession and control.”

What that means is that the funds used must be either owned solely by the investor. As such, gifts and inheritance may qualify as long as the funds are given completely to the investor and well documented through wills, estate settlements, or tax registries.

E2 Visa Applications – Actions to Avoid

1. The investment enterprise may not be marginal. A marginal enterprise is one 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.
2. Limiting investment to easily sold items. If the E2 Visa is not approved, many applicants want to rapidly liquidate items such as inventory or commercial lease costs. This does not demonstrate confidence in the business plan.
3. Adding travel costs to the E2 Visa application as a business expense. Travel expenses are usually not accepted by USCIS.
4. Simply depositing $100,000 or more in a US bank account. Having money in a bank account does not prove that the money is committed to establishing a business and meeting E2 Visa investment requirements.
5. Investing in Real Estate Properties only.  The E2 investment needs to be ongoing and active; such as a property management firm that invests in and resells assets. See the VERDIN E2 Visas Guide for Real Estate Companies.
6. Using your home as your office: For E2 visa purposes, using your home as your office can be a red flag for immigration. It can indicate that you are not taking your business seriously; and are not secure enough in your business model to invest in office space.

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E2 Visa or Immigration Questions? Please Contact VERDIN Law

Isaul VERDIN has extensive experience advising multinational companies and entrepreneurs on complex US immigration matters involving investments.

Mr. VERDIN focuses on advising companies on structuring entities, acquisitions, and strategic expansion to satisfy US immigration E-1, E2, L1A, L1B, or EB-1 objectives in a variety of fields. These business opportunities include real estate, aviation, technology, manufacturing, retail, luxury goods, and professional services. Additionally, he litigates deportation defense matters throughout the US.

VERDIN boasts a combined 70 years of experience in immigration law. Since its inception, VERDIN has gained a reputation for prevailing in even the most complicated immigration matters.

“As a Board Certified, Immigration Lawyer (Texas Board of Legal Specialization) with over 17 years of experience, my passion is immigration law. We will listen to your concerns, answer all your questions, and expertly guide you through your immigration process.” ~ Isaul VERDIN, Founder and Managing Attorney

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