1. E2 visa: the US administration requires an initial investment from applicants
As a foreign investor, you can apply for an E2 visa if you meet specific requirements and you are able to prove it. Let’s clarify why E2 applicants are required to invest and how much they are expected to invest.
Understanding the purpose of the E2 visa:
E2 visas and working permits of this category are granted to foreign investors to allow them to invest in projects that will have a meaningful impact on the American economy. In other words, projects that will create jobs on the American territory in the short term.
If the US entity created by foreign investors is eligible to sponsor E2 visas, this entity can sponsor any executive and other employee for working and living in the USA with an E2 visa on the condition that it can demonstrate that such people are key to conduct the company’s business activities. Again, it’s all about the project’s viability and perennial jobs.
Proofs of investment to provide as you apply for an E2 visa:
The only way for the US administration to make sure that you are serious about your expansion project is to ask for 3 proofs that you meet the above-mentioned expectations:
Proof that your business has sufficient funds to invest in the US project: you will typically be required to have about $150,000 wired on your US bank account
Proof that you already have traction among your target audience and that you are comfortable enough to proceed to expenses that support your expansion: you will typically be required to show that you have already spent 50% of your $150,000 deposit as you file the visa application
Proof that you are serious about your commitment on the American territory in the long term: you will typically be asked to show that you have signed contracts with local economic players, such as distribution contracts or a commercial lease.
2. Visa application, US entity creation, initial investment: how do I get organized?
Step 1: Map the process
Talk to your immigration lawyer first: the immigration lawyer is the only person who will determine whether an E2 visa fits your company’s project (there might be other options). Moreover, the lawyer will prepare and optimize the visa application based on his / her analysis of your project, making sure that you satisfy the US administration’s requirements. You will also get a good idea of the timeline and critical path. For more information about US visas, see Visas in the USA: Which One Best Fits Your Project?
If the immigration lawyer recommends applying for an E2 visa, assess when you (or the parent company) will have $150,000 available to feed a US bank account. As explained in par. 1, you will have to wire $150,000 to a US bank account before you submit your visa application. Once an estimated date is set, you can use reverse planning to get organized.
Search for and contact Sherpas: you will need a US bank account to receive the above-mentioned funds, and you can only get a US bank account if you have a US entity. You thus need a corporate lawyer to create the US entity, and a US bank to provide you with an account once the US entity is created.
Validate the process with all parties: make sure that you discuss the different steps, critical dependencies, and the timeline with the immigration lawyer, the corporate lawyer, and the bank. Also make sure that you understand and list all providers’ requirements at each step to avoid misunderstandings, back-and-forth, and delays (see for instance Opening a US Bank Account: Process). Of course, don’t forget to ask about providers’ billing structure and payment terms.
Note: if you wish to have a partner that will handle and coordinate the whole process for you, please feel free to contact TradeSherpa and we will redirect you to the appropriate partner.
Step 2: Launch the process
Typically, foreign investors obtain an E2 visa in about 4 months – but of course, it can vary based on specific situations. You will find below a sample timeline as well as guidelines for completing each task:
Ask your immigration lawyer to start building your case. Please note that E2 applications require that you provide a business plan: you may want to start working on this document ahead of time if it is not ready yet.
Create your US entity and open a US bank account: it will take about 1 month, and you don’t need a business visa to do it.
In the meantime, you can already gather evidence of all expenses that have been made by your non-US companies (parent company and subsidiaries). Though the US administration will pay more attention to expenses made by your US entity, the lawyer should be able to use expenses made by your non-US companies to build your case. Such expenses include: invoices and payments related to your US expansion, such as tradeshows, marketing materials, travel expenses, go-to-market strategy, business development, private office lease in the USA, etc.
Once your US entity is created and you have a US bank account open, you can wire the $150,000 to this account from your parent company.
You then make expenses using your US bank account and you document them. Remember that the US administration expects you to spend about $75,000 (~50% of your initial deposit) before you submit the application, so you need to plan for it. Expenses should show that you have a US presence and that the US entity already has significant business activities: lawyers’ fees, private office lease, marketing materials, PR activities, utilities, US employees’ payroll, distribution contracts, outsourced services, etc.
Note: in some rare cases, the lawyer can submit the application before all required expenses are made. However, keep in mind that the current trend is to tighten up immigration control, so you’d better plan for adding substantial proofs of investment to your case than trying to speed up the process.
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Disclaimer: The materials provided in this US Toolbox are for general information purposes only and are not intended to constitute comprehensive or specific legal, accounting, tax, marketing, or other advice. These materials may not reflect recent developments in the law, may not be complete, and may not pertain to your specific situation and circumstances.TradeSherpa, Inc. assumes no responsibility for errors or omissions in the materials, or for any losses that may arise from reliance upon the information contained these materials. Because these materials are intended to provide only general advice, specific advice should be taken from qualified professionals when dealing with specific situations and circumstances.