How Much to Invest for an E2 Visa
Under regulations governing the E-2 visa, the E-2 Investor must demonstrate that a substantial investment of personal funds has been invested in the business enterprise, the investment must put the investor’s funds at risk and will be dedicated to the development of the enterprise. A substantial investment is determined by the proportion of funds invested compared to the total cost to develop the business to the point of being operational. Therefore, no minimum investment amount is specified in the regulations. For large investments where the total capital investment is $500,000 or more, the percentage of total investment would be lower to meet the substantial investment requirement than that required for smaller investments.
As an E-2 visa applicant must demonstrate that they have put their funds at risk and will be dedicated to the development of the enterprise, it is generally difficult to obtain an E-2 visa with an investment of less than $100,000 to $150,000. Depending on the type of business, the amount invested may vary considerably. Visas are issued for all types of business ventures, e.g. convenience stores, motels, property management companies, shooting ranges, gift shops, building contractors, food franchises, and pool cleaning companies, to name but a few, and each of these may require a different investment amount.
Investment Amount for an Existing Business
When an investor applying for an E-2 visa based on the purchase of an existing business, the investment amount is the business purchase price, but some financing may be permitted. The amount of financing allowed is at the discretion of the adjudicating Consular Officer. Although the visa regulations are not specific, a rough guideline is that financing should not be more than 25-30% of the total purchase price for an investment of between $100,000 and $500,000. This amount refers to financing secured by the business assets. Additional borrowing, which is unsecured by the business assets, is also permitted.
The greater the purchase price of the business, the greater the percentage of secured financing permitted. For example, for a motel business that costs $1 million, around 50% financing would probably be acceptable.
Investment Amount for a New Business
When an investor is developing a new business, the investment amount is the amount of capital necessary to establish the new business to the point of being operational. The costs involved in developing a new business are as varied as there are different types of business. For a new restaurant, for example, an investor would be expected to have leased the business premises, and purchased equipment and furnishings prior to filing the visa application. For a pool service business, an investor may only need to lease premises, buy office equipment and a vehicle, and put funds in a business account for working capital.
From the perspective of an E-2 applicant, the drawback of starting a new business is that the necessary expenditures must be made prior to the submission of the visa application. Simply depositing funds in a business account is insufficient to demonstrate that funds have been adequately and irrevocably committed to the business.
Approvals for E-2 registration of new businesses can, therefore, be more difficult and time consuming to obtain than for the purchase of an existing business. If an investor is really committed to establishing a new business he should not lose hope. Contact us to discuss your proposals to maximise your chances of visa approval.