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By: Jenna Robinson
The U.S. has entered into treaties with several countries and established the E-2 visa to allow businesspeople from these countries to work for a business in which they have invested. The E-2 treaty investor visa has become an increasingly popular path for immigrants looking to work in the U.S. According to a report issued by the Department of State, the number of foreign workers obtaining this visa has steadily increased by more than 37% between 2011 (39,997) and 2015 (59,221).
Investment: The central focal point of E-2 visa
While most of the requirements for an E-2 are relatively self-explanatory, the central focal point is usually the investment. In contrast to the heavily-publicized EB-5 program, the E-2 has no set investment number, rather, it requires a “substantial investment,” which is open to wide interpretation. Most immigration lawyers suggest a threshold of $100,000 to be generally acceptable, but this number doesn’t always make sense for all businesses.
I recently attended an AILA (American Immigration Lawyers Association) event where a former Department of State Consular Officer provided some valuable insight on the E-2 visa. Though it’s important to meet the plain language of the requirements, the former officer promoted divergent thinking when advising clients on these applications and stressed the fact that each application is judged by a totality of the circumstances test.
Let’s discuss a few hypotheticals to put this into perspective. Imaginary Ian, a 22-year-old business major on an F-1 student visa, incorporates a business that allows amateurs and avid sports fans to easily organize and manage sporting activities through a user-friendly, one-stop mobile and web solution to schedule pick-up games or tournaments. He received a $50,000 cash gift from his parents, which he invested into the company, but is operating the business out of his home. His company doesn’t employ anyone yet, but he has provided an extensive business plan with 5-year projections showing significant income within the first 5 years, mostly indirect employment of independent contractors to maintain sites, conduct sales, etc. While there may be a few challenges with his petition, overall, imaginary Ian has a good shot at an approval. His investment is lower than the advisable $100,000, but because of the nature of the business he has proposed, a larger investment is not entirely necessary.
The software platform he has developed has already been beta-tested on numerous campuses and his business is as close to fully-operational as possible. The most identifiable issue with his case is the proposed use of his home as an office. Although we are in the 21st century and businesses are increasingly operating remotely through virtual offices, Consular Officers and Immigration still view this as an unfavorable set up.
As a best practice, I still advise all of my clients to set up a brick and mortar location with companies such as Regus or WeWork. This is a much cheaper and convenient option in comparison to traditional leasing methods.
Another example involves a 70-year-old woman, Stranger Sue, who decides she wants to buy a nail salon. She invests $125,000 to get the place up and running, hires 8-10 employees, including two managers who will be responsible for operating the business, and buys a beach-front home 50 miles away from the salon. Her investment is substantial and not marginal, she has hired U.S. workers, and the nail salon is a real and operating commercial enterprise. However, when viewing her case through the totality of the circumstances, Stranger Sue likely has no intent to direct and develop the enterprise. Not only has she settled 50 miles away, she has hired individuals to actively manage the business on her behalf. The E-2 should not be used as a path to retirement; the investor must actively direct and develop the business on a regular basis.
Deciding the fate of an E-2 case
As can be seen with these two examples, deciding the fate of an E-2 case is a balancing act. For the best results, it is important to look at the application from the Officer’s perspective. Does it make sense; does it pass the “smell test”? If you have any doubts, you can bet the Officer will too. For more information on how to best strategize your E-2 application, please contact me at [email protected]
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