Jan 30 2020
In the midst of the Trump Administration’s crackdown on immigration to the U.S., for certain foreign nations, the E-2 visa remains one of the most popular avenues to obtain authorization to work, invest and reside in the U.S. (Curious if your country of nationality is on the list of treaty nations with the U.S.? Check it out here.)
What makes the E-2 Investor Visa So Attractive?
First, the E-2 Investor Visa classification offers investors lots of freedom to develop their business model. While most consulates and embassies around the world have specific guidelines on how to prepare the application, there are no strict rules about the investor’s business model, per se. This means the average café owner is just as eligible to obtain an E-2 Investor Visa as a well-versed venture capitalist flush with millions of dollars in funding, ready to invest in their next venture.
Second, the E-2 Investor can submit their application at any time of the year, so long as the investor is ready to appear for their interview. This year-round flexibility can be extremely beneficial, especially for investors who must schedule around their children’s school year.
Finally, most E-2 Investor Visa applicants have the chance to interface directly with a consular officer reviewing the application (when the application has been lodged with the consulate). As a result, that face-to-face interview can prove to be a great opportunity to describe and explain their business model.
How to Get your E-2 Investor Visa Application Approved?
Speaking of face-to-face interactions; how do E-2 investors get their applications approved?
According to a government report in 2019, the most common challenges consular officers struggled with during an E-2 interview, were 1) the unfamiliarity of the new business venture and 2) how to assess whether the investment met the “substantial” investment test.
1. Explaining Your New Business Venture
Depending on how busy the consulate is, consular officers may be reviewing hundreds or thousands of E-2 investor visa applications each year. Ensuring your application is approvable requires a clean and clear explanation of your business model because it helps the consular officer understand the application. If they understand it, they are more likely to approve the application. Is the description about the E-2 business clear and concise? Consider what questions a consular officer may ask about the business model and then ensure those questions are very obviously answered in your application.
2. Investment Amount is Substantial
All E-2 investor visa applicants have the burden of proving to the consulate officer that they have invested a “substantial” amount of money in the business. How much is a “substantial” amount?
In practical terms, “substantial” means an amount of money to ensure the business can generate enough profit to support hiring additional workers and grow the company in the U.S. The consular officer will look at the actual amount invested (non-refundable) and then analyze how much money it will take for the business to likely succeed (make a profit). For new business ventures, this can be especially challenging to prove, which is why it is very critical to ensure the application very clearly and confidently explains how the business will operate.
Pro-Tip for E-2 Investor Visa Applicants
In our experience, new businesses that may have complicated funding structures, such as capital funding in the form of SAFEs, other convertible promissory notes, bridge loans or other capitalization methods can easily add complications to an E-2 investor visa application. Therefore, it is important for investors to understand how their capitalization methods may complicate their applications, especially since a moderate increase in E-2 visa application denials have also been trending from 2014 to the present.
Foreign investors can reduce the risk of being denied by seeking counsel from experienced E-2 visa attorneys. Curious if your E-2 business model is viable for an E-2 application? Contact Accel Visa Attorneys for a consultation on your E-2 business idea here.