E 2 Visa – Investor Visa- USA

What does substantial investment mean under the E-2 Visa program and how is it determined?

Substantial investment under the E-2 Visa program; as determined by the U.S. Citizenship and Immigration Services (USCIS), refers to the significant capital that a foreign investor commits to a U.S. business. This investment must be large enough to ensure the successful operation and growth of the business, making it a key factor in qualifying for the E-2 Visa. The E-2 visa allows individuals from countries with which the U.S. maintains a treaty of commerce and navigation to enter the U.S. to develop and direct the operations of a business where they have invested or are actively investing a substantial amount of capital. The determination of a substantial investment involves several criteria:

  1. Proportionality: The investment must be substantial in relation to the total cost of either purchasing an established enterprise or establishing a new business. There is no specific dollar amount that qualifies as substantial; instead, it is evaluated based on the nature of the business and its total cost. The proportionality test compares the amount of the investment to the cost of the business, ensuring it is sufficient to support the likelihood of success. It must be significant enough to demonstrate the investor’s commitment and ensure the business’s success.
  2. Risk: The investment must involve some level of risk and be committed to the business. It should not be speculative or idle, and the investor must show that the funds are already invested or irrevocably committed to the enterprise. This means the capital must be subject to partial or total loss if the business fails. The invested capital must be at risk, meaning it is subject to loss if the business fails. This ensures that the investment is genuine and the investor is committed to the enterprise’s success.
  3. Job Creation: While not explicitly required, the investment should ideally lead to job creation for U.S. workers. This demonstrates the business’s economic impact and potential for success. Businesses that create more jobs are often viewed more favourably during the visa application process. Although not mandatory, the investment should ideally lead to job creation for U.S. workers, demonstrating the business’s economic impact and potential for growth.
  4. Business Viability: The business must be a real, active, and operating commercial or entrepreneurial undertaking. It should produce some service or commodity and engage in profit generation. Marginal enterprises that only provide a minimal living for the investor and their family do not qualify.

Practical Examples of Substantial Investments

  • Small Business: An investment in a pet grooming business might be substantial if the total investment of $90,000 covers the startup costs and operating expenses for the initial period. The proportionality test would consider the total cost required to start and sustain the store.
  • Technology Startups: Investing $200,000 in a tech startup might be considered substantial, especially if it covers the development of a product, hiring staff, and marketing. The success potential and scalability of the business play a role in determining the substantial nature of the investment.
  • Franchise: Investing in a franchise, such as a fast-food restaurant, might require an initial capital outlay of $250,000 to $1 million, depending on the brand and location. This investment is usually substantial because it covers franchise fees, equipment, initial supplies, and possibly real estate.

In summary, a substantial investment under the E-2 Visa program, as assessed by USCIS, is one that is significant enough to support the business’s success and growth, is at risk, and ideally contributes to the U.S. economy through job creation and viable business operations.

Contact our experienced USA Vancouver Immigration attorney at YA Law Corporation.

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