E2 Visa: Who is NOT a Good Candidate?

While our blogs and videos often discuss the requirements for E2 visa eligibility, today  we’re going to take a different approach and delve into who might not be the best candidate for E2 status.  Hopefully, you’ll discover some valuable insights in this blog. .

In a nutshell, the E-2 investor visa allows individuals to invest in a business in the United States. Through their  investment, they not only gain the right to reside in the United States but also operate their business on U.S. soil. With this foundation, let’s jump right into the different reasons why someone may not be the ideal candidate for the E-2.

Not a Citizen of an E-2 Treaty Country

Unlike other nonimmigrant visas,  E-2 visa is exclusively available to citizens of countries that have an E-2 treaty with the United States. Many nations have such treaties in place, including France, South Korea, Colombia, Canada, Mexico, and numerous European countries. . However, some countries, like Russia, India, and China, do not have an E-2 treaty with the United States.

If an applicant is e not a citizen of an E-2 treaty country, the E-2 visa is typically not an option. Nonetheless, there are exceptions. If the prospective applicant is  married to someone from a country with an E-2 treaty, their  spouse can be the primary applicant while the family members can qualify as dependent beneficiaries. In the alternative, prospective applicants may still be able to obtain  citizenship in an E-2 treaty country, enabling them to apply for an E-2 visa. However, recent changes in immigration regulations have made this approach more challenging, particularly when citizenship into the E-2 qualifying country is acquired through financial means, such as an investment.

Lack of Investment Funds

The E-2 visa is an investor visa, and a critical requirement of the visa entails making a substantial investment in a U.S. business. While there’s no specific dollar amount designated as “substantial,” the relative scale of your investment matters. Typically, investments of around $100,000 or more have shown a higher success rate in practice. While the investment amount is specific to the business and its needs, it is generally beneficial to consider investments at this level or higher.

In cases where an applicant has  no funds to invest, the E-2 visa may not be a viable option. It’s important to understand that the E-2 visa requires a substantial financial commitment to establish or purchase a business in the United States. However, there are various sources of investment funds that can be considered for the  E-2 investment and used as the basis for the investment. These include financial gifts from family or friends,  as well as non-cash contributions, such as equipment or inventory, which can qualify as part of the  investment.

No Interest in Operating a Business in the U.S.

The E-2 visa necessitates the direction and development of a business. An E-2 investor’s purpose or ‘job description’  is to manage and nurture the business, not necessarily work at the ground level.  In other words, the investor is expected to oversee the business operations and handle higher-level functions rather than routine everyday tasks.  If there is  no interest in operating a business in the United States, the E-2 visa is likely not the  best option.

Passive Business Ventures

The E-2 visa requires investment in  an active business. Therefore,  to intending to engage in a passive business, like owning a property and renting it out, is probably not the right fit for an E-2. The E-2 visa is designed for businesses in which the investor actively participates in running and managing the enterprise. Passive investments, like real estate ownership and renting, may not meet the criteria for this type of visa.

Unwillingness to Put Funds at Risk

The E-2 visa requires putting investment funds at risk before obtaining the visa. Funds at risk mean that they are genuinely exposed to the potential for gains and losses. This requirement can make some investors uncomfortable, as there’s no guarantee that the E-2 visa will be approved after the funds are committed.

For instance, when investing in a business, an investor is  expected to spend funds on inventory, equipment, or leasing office space. This action demonstrates that the funds are genuinely at risk. However, this step involves a level of financial uncertainty, as the visa approval is not guaranteed. This uncertainty can be uncomfortable for some investors.

In some cases, escrow accounts have been used to minimize risk, particularly when acquiring an existing business. By using escrow, an investor  can arrange to release funds to the seller only if the E-2 visa is approved. While this strategy can help mitigate financial risk, it’s essential to structure it correctly.

In conclusion, we’ve discussed five key reasons why the E-2 visa might not be the right choice for individuals seeking a U.S. visa. We hope this information has provided clarity on various aspects of the E-2 visa. As always, we aim to empower you with knowledge, so if you know someone who can benefit from this information, please share this article with them.