The United States government has not set specific regulations for minimum investment amounts for the purposes of obtaining an E-2 visa. So what is the E-2 Visa Minimum Investment?
Only that the investment must be otherwise substantial. While minimal contributions amounting from $50,000 to $100,000 have qualified in the past, it is highly suggested to have capital of at least $100,000.
Foreign investors whose enterprise bearing a total value of less than around $500,000 will most likely be required to invest 100% of the cost. Conversely, multi-million dollar businesses may qualify for E-2 visas with only an investment of about 50%.
While it would be easier for investors to plan their ventures if precise amounts were given, the variations of minimal investments are relative to each business type. The U.S. government wants to ensure there is a high probability the business will be successful, hence the requirements.
Furthermore, there has to be a distinction between a substantial investment from that of a lesser amount. This shows the business is not marginal, nor used by the foreign investor for simply earning a living. Additionally, the investment must be dedicated only to the endeavor.
For further proof the investment has been set aside for the purposes of the E-2 business, the investor can keep deposit the funds in an escrow account with the condition such funds will be released upon approval of his or her E-2 visa application.
If launching and supporting a small and simple business can be fully financed by the investor, a lower investment amount can qualify him or her for an E-2 investor visa. For this reason, some applications with lesser amounts of around $75,000 can still get approved. It truly is relative to the business being proposed.
All E-2 investor responsibilities and requirements can be found in the U.S. Department of State electronic Foreign Affairs Manual.
Considerations and subsequent adjustments are made depending on the investment amount, as it relates to the cost or value of the enterprise.
Businesses valued at around $100,000 should have an investment amount of 100% to be deemed substantial. Alternately, businesses with an extremely high valuation could have an investment of only 50% and still be considered substantial.
In short, lower-end investments demand a higher ownership percentage from the foreign investor. Therefore, what qualifies as a substantial investment is measured against a proportionality test.
Active and Passive Investments
Petitioners with merely a development plan and no projection of immediate operations is considered to be a passive investment. Therefore, such applications will be denied. For an investment to be considered active, foreign investors must have a business which is near full functionality by the time the application is submitted. Furthermore, he or she must actively work in and manage his or her business promptly after entering the United States.
A proportionality test is used to ensure the success of the business enterprise being used to procure an E-2 visa, and compares two figures:
- The true investment into the enterprise
- The valuation of the enterprise
Investment funds are measured against the cost of a comparable established business. If the business enterprise is newly developed, the metric will be the cost of establishing such a business.
Factors as detailed in the Code of Federal Regulations – 8 CFR § 214. 2(e)(14), will be considered by the immigration officer reviewing E-2 visa applications:
- Whether the investment is substantial in a proportional sense, as determined through purchasing of an appropriate portion of an “established enterprise” or by applying funds to “creat[e] the type of enterprise under consideration”;
- Whether the investment is sufficient to ensure the foreign investor’s financial commitment to the successful operation of his or her enterprise; and
- Whether the investment is of a “magnitude to support the likelihood that the treaty investor will successfully direct and develop the enterprise”.
- If the investor is purchasing an existing business for his or her employment-based (E-2) visa: the value of the business is the purchase price (the fair market value)
- If the E-2 treaty investor is establishing a new business, the valuation is to be the total cost required for carrying the enterprise to the point of being operational
Conclusion of E-2 Visa Minimum Investment
Minimum investment amounts for E-2 investors are not fixed. The requirement is that the investment must be. Applicant’s with capital at least $100,000 tend to see a higher chance of getting their E-2 visa approved. The reason there isn’t a specific figure is because the value of different enterprises vary.
As long as the investment itself is reserved for that purpose only, and the foreign investor’s personal funds are to be at risk for loss, should the business fail. Higher degrees of risk demonstrates the investor is compelled to ensure his or her business is successful.
Also relative are the investment percentages. Low-cost enterprises are required to have a much higher figure than that of high-cost ones.
Passive investments for E-2 visas are not accepted. Meaning, the planned business is far from being operational by the time the application is submitted, and will be denied. Conversely, businesses close to being operational are considered active investments. The foreign investor must demonstrate their intent to actively manage, as well as work in their business when he or she enters the U.S.
Qualifications for investment substantiality are determined by a proportionality test, where immigration officers judge the cost of establishing the investor’s business with one that has already been started.
Furthermore, proportionality tests are used to gauge the cost as well as the success of the E-2 business. The two main criteria are:
- The true investment into the enterprise
- The valuation of the enterprise
The investment amount used for a previously established business is used to assess what the investment funds of the investor’s proposed business should be. Likewise, the cost of establishing a similar business will be the standard for assessing a newly developed one.
The Code of Federal Regulations detail about five main factors immigration officers consider when they review E-2 visa applications:
- The investment is substantial
- The investment is sufficient
- The investor is committed
- The investor will develop and direct the business
- The value of the business
- The cost required for bringing the business to functionality
Frequently Asked Questions About E-2 Visa Minimum Investment
I don’t have $100,000 to invest, would I still qualify for an E-2 visa?
$100,000 is a general figure for smaller, more simple businesses, however some can certainly cost less, and therefore wouldn’t require this amount to be invested. Of course, chances are usually higher if the capital is more, as it could be considered more sufficient to make a substantial impact on the U.S. economy.
How do I know whether my investment is substantial?
Businesses which cost up to around $400,000 would require this amount to be invested. As such investment amount (or capital) would be 100%, the investment would be considered substantial.
How do I know whether my investment is sufficient?
Provided the business plan has passed the proportionality test, having an investment equal to 100% of the cost of the business, is sufficient because:
- The investor has/will have funded all initial operating expenses
- The investor has created jobs for employees and has their salaries covered
- The investor proves financial commitment to the success of the business
Do immigration officers have to use a proportionality test on my E-2 business?
Yes. This test is used to determine whether the foreign investor has made a sufficient investment into their business in order to make it successful once it is operational.