Foreign inventors seeking an E-2 visa real estate investments can do so by owning short term rentals (STRs), commercial properties, or property management companies, or by developing or redeveloping real estate properties. So long as the investor is from a treaty nation and is the enterprise’s owner. Among other requirements, his or her proposed venture must be bona fide, create jobs in the United States market and produce a non-marginal income.
It seems more travelers prefer staying in privately owned STRs than in previous years. The National Association of Realtors (NAR) website gives a more in-depth look at what travelers generally expect to see when staying in an STR, which includes some of the following aspects:
Commercial real estate is a property with the potential of generating a profit through capital gains or rental income. Some examples of commercial real estate properties are the following:
In this scenario, the foreign investor or owner typically does not work directly with tenants, but in a business-to-business relationship (B2B).
Property managers usually establish the rent rate, collect the rent, often set the budget for the property, handle maintenance requests, fill vacant units, etc. This also includes the employment of superintendents, maintenance personnel and a leasing staff.
Property management companies usually require at least $80,000-$110,000 as a minimal investment for E-2 visa purposes. Of course this is on the lower end, but it is doable. Property management enterprises are both profitable and scalable.
Real estate developers:
E-2 investors can own property cleaning services for the following:
Property maintenance companies usually involve entities who do the following:
The foreign investor must be:
Similarly, the foreign investor must have:
Additionally, the applicant’s business must:
Foreign investors who want to get an E-2 Treaty Investor visa, and invest specifically in real estate must be aware their investment cannot simply be passive. Their investment in a U.S.-based business must be an active one. E-2 visas are not granted to investors who wish to purchase a rental property(ies) in the U.S. who expect only to perform minimal managerial tasks. The adjudicating officers at the United States Citizenship and Immigration Services (USCIS) will not qualify such applications for an E-2 visa with this basis.
Additionally, E-2 foreign investors are required to demonstrate that their business is lawful, and that he or she has possession and control of the capital investment. As all funds must be from legal sources, USCIS officers review the sources of funding as far back as 10, 20 and 30 or more years. This includes savings accounts, sales of properties, inheritances, gifts, loans, etc.
Furthermore, investors must prove their investment was or will be placed at-risk and
irrevocably committed, for the purposes of generating a profit. If the business is already operational, foreign investors should proceed with their contracts and commitments.
Proportionality tests compare the total amount invested in the business against the cost of establishing a feasible and similar one. Especially, the amount of capital typically required to purchase a similar business already in existence.
USCIS officers use proportionality tests to determine the investment into the enterprise, the valuation of the enterprise, and whether the investment is:
It is important to note, the investment funds for the real estate business are measured against the cost of comparable and already-established real estate businesses.
More information about treaty investors and business marginality can be found on the USCIS treaty investors website.
Investing in real estate brings liquidity to the investor, cash flow, is recession resistant, and tax efficient.
Compared to many other E-2 investments, properties can be sold quicker and therefore bring a quicker profit. The strongest types of properties resistant to recessions are middle income rental properties, as they do not depend on customers spending their disposable income on goods or services. Furthermore, it is the 1031 Exchange Benefit, Opportunity Zone tax benefit deductions for depreciation, mortgage interest, repairs, etc.
Other advantages to investing in real estate as an E-2 investor are the following:
Another advantage is the E-2 business owner can petition for his or her foreign employees (from their same country) to obtain an E-2 visa as well. Such employees would be executives and supervisors, or any other essential employee with special qualifications. The USCIS E-2 Treaty Investor website gives more information about the requirements for the employees.
E-2 investors working, or who plan on working in real estate in the United States can obtain an E-2 treaty investor visa in any of the following sectors:
Owning such real estate has many advantages, such as tax benefits, cash flow, protection against inflation, as well as resistance to economic inflation. Additionally, E-2 visas are usually much quicker of a process than other visas.
E-2 investor visa applicants must meet the follow requirements, though:
Yes, as long as the sources of funds are lawful, the business is bona fide, the investor is moving or living in the U.S. solely to direct the business, and the business creates jobs for U.S. citizens. The rest of the E-2 investment requirements can be found on the USCIS E-2 website as shown above.
Yes, though the employees must be from the same country, and must be executives, supervisors or other essential employees with specialized skills.
Yes. Furthermore, spouses are permitted to work, and children can go to U.S. schools.
It is a business that does not have the capacity to generate more than enough income to provide a minimal living for the investor and their family.