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| Investing in the United States: Basis for An E-2 Visa By Atty. German Castillo |
The United States presents many opportunities for investing. Many of these investment
opportunities lie in active operations that produce services or commodities. Should a foreign
national make a substantial invest in such active operations he/she may very well have the
opportunity to enter or remain in the United States.
art that bear further explanation as well as some additional requirements that must be noted. It
will be the art that bear further explanation as well as some additional requirements that must be
noted. It will be the purpose of this short article to explain those requirements, summarize the E-2
benefits, and present some alternatives were E-2 is not applicable to the foreign national.
alternatives were E-2 is not applicable to the foreign national.
The Requirements:
The first requirement, for an E-2 visa application, is that the Applicant and the enterprise must be
nationals of the same treaty country. The E-2 visa arises from the foreign national’s country having
a “bilateral investment treaty” or “treaty of commerce and navigation” between that country and the
United States. As of the date of publication, countries having the requisite treaties are: Albania,
Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia &
Herzegovina, Bulgaria, Cameroon, Canada, Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa
Rica, Croatia, Czech Republic, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany,
Grenada, Honduras, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Korea, Kyrgyzstan,
Latvia, Liberia, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Morocco,
Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Senegal,
Serbia & Montenegro, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland,
Taiwan, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Ukraine, and the United Kingdom.
The second major requirement, for an E-2 visa application, is that the investment must be
substantial. It is difficult to define the requirement precisely. The US Immigration Service tends to
focus on absolute substantiality without establishing a numerical limit—although in practice,
investments greater than $65,000 have been considered substantial. On the other hand, the
Department of State applies a proportionality test to determine whether an investment is
substantial. The proportion is done by comparing the amount actually invested, with the cost (value)
of the business—i.e., what amount it takes to buy the business or to establish it from scratch, as
may be the case. If the amount invested is the same as the cost (value), the investment is 100% of
the required funds, which would always be deemed ''substantial,'' although 100% is never required.
The third major requirement, for an E-2 visa application, is that the funds or other investment
assets must be placed "at risk." In other words, the investor must have irrevocably committed the
funds to the investment. The funds, at that point, would be subject to partial or total loss should
the investment fortunes take a turn for the worse. For example, funds that still are within the
investor’s own accounts, and committed only by an investment contract, would not be classified as a
risk—the reasoning being that a contract remains subject to breach. In contrast, funds turned over
into escrow, subject to issuance of the visa, would satisfy the “risk” requirement.
The fourth major requirement, for an E-2 visa application, is that the investment must be more than
“marginal.” By such requirement, it is meant that the investment has the capacity to generate more
than just enough profit for the investor and his/her family to earn a living, or it must have a
significant impact on the local economy—most commonly by providing or generating jobs in the U.S.
There are several other requirements that are almost intuitive, but are worth stating briefly. For
one, the investment must be a real and active commercial or entrepreneurial undertaking, producing
some service or commodity, as opposed to a passive mere speculative investment—e.g., buying
undeveloped land or stocks merely to resell at a profit or investing in a not-for-profit organization.
For another, the funds or other investment assets must belong to the investor, whether obtained by
such means as gift, savings, or inheritance. Although commonly misunderstood, the investment
funds do not need not come from outside the United States, but must be received legitimately.
Finally, the investor who is coming to develop and direct his/her investment must in fact have
“control” of the investment operations/enterprise. Typically, such control arises from having at least
51% ownership of the enterprise.
The Benefits:
Having established the required elements for E-2 status, an investor will also be able to obtain E-2
dependent status for his/her family. Unlike other categories, like H-4, the spouse of the E-2
investor may apply for work authorization. Unlike other categories, E-2 status can continue to be
extended indefinitely as long as the investor affirms that he/she will leave the United States when
the E-2 purpose is over. That same affirmation of intent to return, means the E-2 holder does not
need to maintain a foreign residence during their E-2 stay in the U.S.
There are other possibilities for obtaining E-2 status based on being an “employee” instead of an
“investor.” Likewise, irrespective of nationality, there are other immigration options for those
wishing to invest at least $500,000 or who want to make an intra-company executive or managerial
transfer. However, those topics will be covered in later articles. For now, it is hoped that this brief
article has provided sufficient elucidation for those who might qualify and would like to follow up
their investment matters with legal counsel.
opportunities lie in active operations that produce services or commodities. Should a foreign
national make a substantial invest in such active operations he/she may very well have the
opportunity to enter or remain in the United States.
art that bear further explanation as well as some additional requirements that must be noted. It
will be the art that bear further explanation as well as some additional requirements that must be
noted. It will be the purpose of this short article to explain those requirements, summarize the E-2
benefits, and present some alternatives were E-2 is not applicable to the foreign national.
alternatives were E-2 is not applicable to the foreign national.
The Requirements:
The first requirement, for an E-2 visa application, is that the Applicant and the enterprise must be
nationals of the same treaty country. The E-2 visa arises from the foreign national’s country having
a “bilateral investment treaty” or “treaty of commerce and navigation” between that country and the
United States. As of the date of publication, countries having the requisite treaties are: Albania,
Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia &
Herzegovina, Bulgaria, Cameroon, Canada, Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa
Rica, Croatia, Czech Republic, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany,
Grenada, Honduras, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Korea, Kyrgyzstan,
Latvia, Liberia, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Morocco,
Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Senegal,
Serbia & Montenegro, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland,
Taiwan, Thailand, Togo, Trinidad and Tobago, Tunisia, Turkey, Ukraine, and the United Kingdom.
The second major requirement, for an E-2 visa application, is that the investment must be
substantial. It is difficult to define the requirement precisely. The US Immigration Service tends to
focus on absolute substantiality without establishing a numerical limit—although in practice,
investments greater than $65,000 have been considered substantial. On the other hand, the
Department of State applies a proportionality test to determine whether an investment is
substantial. The proportion is done by comparing the amount actually invested, with the cost (value)
of the business—i.e., what amount it takes to buy the business or to establish it from scratch, as
may be the case. If the amount invested is the same as the cost (value), the investment is 100% of
the required funds, which would always be deemed ''substantial,'' although 100% is never required.
The third major requirement, for an E-2 visa application, is that the funds or other investment
assets must be placed "at risk." In other words, the investor must have irrevocably committed the
funds to the investment. The funds, at that point, would be subject to partial or total loss should
the investment fortunes take a turn for the worse. For example, funds that still are within the
investor’s own accounts, and committed only by an investment contract, would not be classified as a
risk—the reasoning being that a contract remains subject to breach. In contrast, funds turned over
into escrow, subject to issuance of the visa, would satisfy the “risk” requirement.
The fourth major requirement, for an E-2 visa application, is that the investment must be more than
“marginal.” By such requirement, it is meant that the investment has the capacity to generate more
than just enough profit for the investor and his/her family to earn a living, or it must have a
significant impact on the local economy—most commonly by providing or generating jobs in the U.S.
There are several other requirements that are almost intuitive, but are worth stating briefly. For
one, the investment must be a real and active commercial or entrepreneurial undertaking, producing
some service or commodity, as opposed to a passive mere speculative investment—e.g., buying
undeveloped land or stocks merely to resell at a profit or investing in a not-for-profit organization.
For another, the funds or other investment assets must belong to the investor, whether obtained by
such means as gift, savings, or inheritance. Although commonly misunderstood, the investment
funds do not need not come from outside the United States, but must be received legitimately.
Finally, the investor who is coming to develop and direct his/her investment must in fact have
“control” of the investment operations/enterprise. Typically, such control arises from having at least
51% ownership of the enterprise.
The Benefits:
Having established the required elements for E-2 status, an investor will also be able to obtain E-2
dependent status for his/her family. Unlike other categories, like H-4, the spouse of the E-2
investor may apply for work authorization. Unlike other categories, E-2 status can continue to be
extended indefinitely as long as the investor affirms that he/she will leave the United States when
the E-2 purpose is over. That same affirmation of intent to return, means the E-2 holder does not
need to maintain a foreign residence during their E-2 stay in the U.S.
There are other possibilities for obtaining E-2 status based on being an “employee” instead of an
“investor.” Likewise, irrespective of nationality, there are other immigration options for those
wishing to invest at least $500,000 or who want to make an intra-company executive or managerial
transfer. However, those topics will be covered in later articles. For now, it is hoped that this brief
article has provided sufficient elucidation for those who might qualify and would like to follow up
their investment matters with legal counsel.
To schedule a consultation, please call
tel. (281) 980-1385 or (281) 340-2027
tel. (281) 980-1385 or (281) 340-2027
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GERMAN CASTILLO LAW OFFICE, P.C.
| Immigration Law and Intellectual Property |
| A P r o f e s s i o n a l C o r p o r a t i o n |
| German Castillo Law Office, P.C. 14090 Southwest Freeway, Suite 300, Sugar Land, TX 77478 Tel (281) 340-2027; (281) 980-1385; Toll Free Fax 1 (866) 416-0059; California: Tel (650) 270-5239 INTERNATIONAL OFFICE: PHILIPPINES: 6/F Padilla Building, Emerald Avenue, Ortigas Center, Pasig City, Philippines Tel (63-918) 906-8142 Fax (63-2) 631-1546 |
| All contents copyright © German Castillo Law Office 2005-2007. All rights reserved. This website is designed and managed by Z-Media Publishing and Design Tel (832) 338-6347 |
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