The E-2 Visa classification allows an individual to temporarily enter the U.S. if (s)he is a national of a Treaty country and invests a substantial amount of capital in a U.S. business (new or existing).[1] The U.S. Department of State’s website contains the list of Treaty countries.[2] The investor must also be seeking to enter the U.S. solely to develop and direct the business and show at least 50% ownership or possession of operational control.[3]
One of the common questions those seeking E-2 Visas ask is what is considered a “substantial” amount of capital. According to 8 CFR 214.2(e)(14), a substantial amount of capital is:
(1) Substantial in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise under consideration;
(2) Sufficient to ensure the treaty investor’s financial commitment to the successful operation of the enterprise; and
(3) Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise. Generally, the lower the cost of the enterprise, the higher, proportionately, the investment must be to be considered a substantial amount of capital.[4]
This definition shows us that a “substantial” amount of capital varies based on the cost of the business. Business valuation is “the process of determining the economic value of a business or company.”[5] It is critical that the investor has the business valued to determine the amount of required investment. It is also important to note that the applicant will have the burden to prove that the investment is substantial.
The best way to explain whether an amount would be considered substantial would be to provide a couple of examples. Let’s say an investor wants to invest in a start-up. In this case the investor will need to ensure that the financial commitment is enough for the business to be successful. So, if $100,000 is required before the business can make a profit, then $100,000 would be the required investment. However, if the investor is going to invest in an existing business, that is valued at $400,000, a proportionate amount would be about 50% of the business’s value, or $200,000.
Since the amount of requisite capital is not defined by the law, it is important to understand what USCIS may consider substantial in order to secure an E-2 Visa. Therefore, it is essential to have a professional valuator to accurately value the business the investor will be financing in the U.S.
To find out about professional, well-researched, articulate, expository, narrative and customized Visa Business Plans and a variety of complementary services, all of which are designed to specifically address USCIS’s concerns, contact e-Council Inc.com at info@ecouncilinc.com.
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[1] http://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors
[2] http://travel.state.gov/content/visas/english/fees/treaty.html
[3] http://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors
[4] http://www.law.cornell.edu/cfr/text/8/214.2
[5] http://www.investopedia.com/terms/b/business-valuation.asp