A Closer Look at the E-2 Visa
Published on May 7, 2021
U.S. Immigration attorney Suzanne E. Vazquez, Board Certified as an expert in Immigration and Nationality Law by the Florida Bar, goes in depth on the E-2 Visa, explaining what it is, how to apply, the associated costs, how long the application process takes, its requirements, its validity period, the differences between applying in the U.S. vs. at the consulate, how long it can be renewed, and more.
A Closer Look at the E-2 Visa
How do I get an E-2 visa?
The e-2 visa is a creation of a treaty agreement between the United States and a foreign country to foster trade. The treaty investor visa is an opportunity for a foreign national who's a national of the treaty country to come to the United States and start a small business or an employee of a treaty company already established in the United States to come and take employment either as an essential skill worker or a supervisor.
What are the costs of an E-2 visa?
The cost for an E-2 visa is basically your investment in the company that you're going to start, or the business that you're going to invest in in the United States, plus your cost of attorney’s fees and visa application fees. The investment in the United States must be substantial. This means that although there is not a set amount that you must invest if you're investing for example, purchasing an existing business that is for sale for $150,000 you must make it a substantial investment by purchasing it outright, meaning that there would be no financing involved in the transaction. Once you get into the purchase of a larger business then financing could come into play. That is something that you would further discuss with myself or my office if you were interested in that type of visa
How do I get an E-2 visa?
The first thing to talk about is visa versus status. A visa is something that you obtain from the consulate abroad and it's a foil that basically goes into your passport that you present when you enter the United States for admission. When you're admitted to the United States you have an I-94 card which now is online, but the I-94 regulates your status. It tells you what status you've been admitted in, and for how long you can be admitted. To apply for a visa at the consulate you're going to have to demonstrate that you've invested or that you're in the process of investing. One of the advantages of applying for a visa over a change of status is that you can buy a business with a contingency clause. The contingency clause is that you will invest the funds if and only if your visa is issued. There is an actual contract between you and the seller, there's an escrow agreement, your funds are in escrow and they've been irrevocably committed, but those funds are only released to the seller if you get your visa. If you don't get your visa the funds revert to you. If you do a change of status, you can do a startup with a smaller investment, but you will not have the ability to travel outside the United States. Generally, the visa is preferable, but for somebody who has limited financial ability to invest or wants to get in as a startup without investing too much money in case the startup doesn't work out, then the change of status can be preferable.
How long does the application process take?
It doesn't really take a long time to get the E-2 visa if you know what you want to do and you've identified a business that you want to invest in, or what exactly you want to do in terms of a startup if you're doing a startup. You do have to show that you have taken substantial steps to investing and really and truly you are going to need to do a lot of leg work. It's not work that would take very long but you'll need to find either an office space or an existing business, you'll need to put together a business plan, you'll need to coordinate all of this with your attorney, fill out application forms and present other biographical information. We've done these in as little as 30 days including the business plan. Going to the consulate depends on which consulate you're going to and what their processing times are. But while you hear of people waiting years for certain visas certainly this is not one of them. It's just subject to visa availability for appointments at the consulate.
What type of business should I invest in?
When you're looking for a business to invest in you want to make sure that it's an active business. A passive business would not work. Meaning if you wanted to come to the United States and invest in let's say real estate, for example buying a house, and you were going to buy a million-dollar house would that qualify? No, it wouldn't. If you wanted to invest in the stock market that wouldn't qualify either. You need an active business. Some examples might be if you wanted to be in real estate, you could have a property management company that manages other properties, otherwise you could do something like a restaurant, or a café, or whatever it is that you did in your home country because business acumen is also something that the consular officer will look at. They will want to be convinced that you can come here and succeed in your business. They don't want you to fail, so they will look at what you've done in the past. Any kind of managerial experience will be very helpful. As long as you can explain to the consular officer why you think your experience will help you run the business you're investing in in the United States, you should meet the requirement of business acumen. You also want to make sure that you have a traceable source of funds, that you have a paper trail for the source of funds. The source of funds must be legitimate. You've got to trace it to a legitimate source. Often times we can do that with your foreign company payroll and your taxes, or you may have sold a property and then we would get the proceeds from the property and we would have the paper trail from the sale of the property arriving all the way into your personal account, which from your personal account you would invest in the United States. A lot of the businesses when they're purchased are purchased through a company. In this case you would open your own company in the United States and through your company you would fund your company from your personal funds and then your company would enter under contract to buy a U.S company that would be your investment.
What are the requirements for my involvement at my investment business?
The E-2 visa also requires that, as an investor, you direct and develop the business. What that means is that you're committed to this business you don't have authorization to work at other companies or do anything else other than what you've told the consulate you want to do. If you want to make changes to your business that are not already laid out in your business plan then you should amend your E-2 visa with the consulate. But suffice it to say you are here to direct and develop your investment and nothing else. A great thing about the E-2 visa is that spouses are eligible for work authorization. So, between you and your spouse you might want to decide which one will be the investor and which one will have the work authorization, because having that work authorization it's not specific to any employer. The spouse with the work authorization could start their own business or go to work for a U.S. employer and actually by going to work for a U.S. employer that could open up an opportunity for a permanent residency through U.S. company sponsorship via labor certification, also known as PERM.
Why don't "marginal businesses" meet the E-2 investment requirements?
Another really important requirement for E2 status or visa is that your business is not marginal. What that means is that your business needs to create employment for U.S. workers. The amount of U.S. workers that you need to have is not really defined in my experience I tell my investors to aim for having at least two U.S. workers preferably on payroll although I have found in my experience that independent contractors are also okay. Marginality means the business doesn't just provide enough income for you and your family it also provides income that you can pay workers U.S. workers with. If your business only produces enough income to support your family you may get it initially because the business hasn't really been tested yet, but your extension could be jeopardized. It is important when you think about what investment you're making that you feel confident that that business can support other employees and therefore you might want to pay a little bit extra for a business rather than worrying so much about getting the least expensive business possible because you may struggle with marginality with a smaller investment.
What are spouses and children eligible for?
Spouses get work authorization and children are allowed to go to public school and they can even go to college up until they become 21. Children are dependents included with the principal until they reach age 21, and spouses could also go to college if they wanted to on E2 status without having to get a student visa.
How long is the E-2 visa valid?
Generally speaking, the visa can be issued up to five years. The very first time you apply for an E2 the consular officer might issue it for less than five years, though in my experience most of the time it is five years. When you enter the United States, your status will be for two years. That's important also to remember. The visa is for entering the United States, but when you're in the United States you have to always be in status. So when you're reaching your two years you may have to make a trip outside the country, a short trip or back to your home country so that you can be readmitted again for two years. But your visa and your ability to travel into the U.S. on the E-2 would be up to five years. If you were doing a change of status, then that would only be two years and again you wouldn't have the ability to travel. However, with a change of status you can invest a little bit less money and have a startup instead of an existing business, and then after two or four years once you've built up that business from the smaller investment it could be a more viable application at the consulate.
How long can I keep renewing my E-2 visa?
There are lots of visas that have limitations on them in terms of how long you can be in the United States in that status, but the E2 is renewable indefinitely. Of course, you still have to be running your business or be here in whatever capacity was that you indicated you would be in when you applied for the visa, but as long as you are and everything is going well and your business is not marginal then you should be able to renew the E-2 indefinitely.
Can I get a green card from an E-2 visa?
The E-2 visa doesn't convert to permanent residence the way that an L-1 visa might. However, there are other ways E-2 visa holders get green cards. One way is growing their business to where they can turn it into an EB-5 visa. However, that requires that you have 10 employees and that can be difficult to do for a smaller investor. Also, the amount of money invested must be close to a million dollars or more depending on if you're in a TEA (Targeted Employment Area) or a rural area or not. Another way that an E2 family might get a green card is through labor certification. If the spouse of the E2 investor gets work authorization, and they're employable in the U.S., and they get employed by a U.S. company, they may be able to be sponsored by that U.S. company for a green card through labor certification. That's something that we have done many times with our E2 clients.
What are the differences between applying in the U.S. vs. at the consulate?
The main difference between applying in the United States versus at the consulate is the amount of money that you need to invest. Although I know certain practitioners have presented E-2 visas at consulates for small investment amounts such as 30,000 or $40,000, this is challenging. It is a lot easier to do a start-up in the United States with a smaller amount. It may not work out in your situation and you really need to consult with an attorney to figure out what's best for you, but in our opinion, it is a big advantage to be able to do a change of status with the startup business option. If you invest $50,000 or $60,000 at the consular level, then you come to the U.S. and spend the money on a startup, and then you go back and you don't get your visa, you're going to be scrambling to try to sell off whatever assets you purchased in the U.S. The visa option for us makes most sense if you're doing it as a contingency, meaning that you found a business, the money is going to be in escrow, and you are to use the money only if you get the visa. Keep in mind that there are different consulates and, even though the law is the same the practice, depending on the consulate you're at, could be different. You would determine that based on our conversations during a consultation.
Applying for an E-2 visa as a change of status
If you're doing an E2 as a change of status you apply with USCIS, and premium processing is available, which means that its processing can be pretty quick also, just like getting a visa at the consulate. It is just that remember, with the change of status you don't have the ability to travel, but you could invest a smaller amount for a startup. One thing to also consider when you're doing a change of status is that you must have a visa that you're changing status from. A lot of Europeans for example, come to the U.S. on ESTA, but you can't change status from ESTA, so you need to keep that in mind also.
Why should I choose VP Immigration to assist me with my E-2 visa application?
I myself have been practicing immigration law for over 20 years and my partner, Maud Poudat, just about as long. We are both board certified which means that we are considered experts in our field. We've been doing E-2 visas for just as long as well, and with experience comes knowledge, we know what works around the world: consulates differ depending on where you're going. I'm very active with the American Immigration Lawyers Association and I love my CLE continuing education credits, so I'm constantly staying on top of what's going on around the world in terms of visas. So given our experience and the fact that we do this day in and day out, we really have our fingers on the pulse of visa issuance around the country and around the world for E2s.