By Michael Monnot – www.InfinityBusinessBrokers.com
Trying to understand the bureaucratic jargon on a government website can be tough, especially if English isn’t your first language. In this series of articles we will help decipher and translate the information from the USCIS (U.S. Citizenship and Immigration Services) website into something a bit more clear.
Still have questions after our translation? Contact us here.
If you are looking for basic information on understanding the requirements for the E2 Visa, then the Understanding E2 Requirements page at USCIS is for you. Let’s look at the first of the five requirements listed by USCIS and what they mean for you as an E2 Investor.
“Requirement 1 – As a treaty investor, you must be coming to the United States to invest in a new or existing enterprise.”
All this means is the E2 Visa is intended as a way for a foreign national to come to the United States by buying or starting a business.
“USCIS defines an E-2 investment as the investor’s placing of capital, including funds and other assets, at risk in the commercial sense with the objective of generating a profit. Your investment may be for the purpose of establishing a new business venture, or purchasing a pre-existing business. In either scenario, you must demonstrate that the capital you are investing is substantial.”
Let’s start this explanation by asking what does it mean to invest substantial capital? The answer is, it depends. A general search on the internet might tell you that you need to invest somewhere in the neighborhood of $100,000 – $150,000, but the E-2 can be acquired for much less. – $50,000 of investment in some cases. The amount you need will vary depending on what country you are coming from, what type of business you are buying and a number of other factors.
The rest of this section essentially says the E2 Visa is a way for you to come to the United States to invest money in the purchase or start up of a business that you will run to generate a profit. It is typically much more difficult to start a business than to buy one that already exists – and adding the complexities of obtaining a Visa can make it unnecessarily difficult. We strongly suggest that those seeking the E2 Visa look for an existing business rather than attempting to start a new one.
Why should you invest your capital in an existing business instead of starting a business from the ground up? There are several reasons.
First, when you start a business you are testing an unproven product in an unproven market with an unproven location and unproven operating procedures. Start-up businesses are very risky because of their unproven nature. By buying an existing business, all of that initial trial has been done for you. You know the product is something consumers want, you know the location works and you know the business is able to successfully operate using the current operating procedures – otherwise the doors wouldn’t be open.
Second, when trying to use a start-up business to qualify for the E2 Visa, the business itself (the build-out and installation of equipment and furnishings) must be 70-80% complete and you must already have a commercial lease signed for your location BEFORE you apply for your Visa. Once you apply for the E2, you risk having your application denied. If you are turned down, your new business must be sold as an asset sale and you will potentially lose a big chunk of your investment.
This is an unnecessarily large risk when you consider you have the option to buy an existing business instead. Talk to us today about your options for the E2 and about what businesses are available that qualify for this Visa. You can also contact us if you have questions about this or any other USCIS requirement.
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Fort Myers, FL 33907