The E-2 Visa
The E-2 Investor visa is available to citizens of a country that has a trade treaty with the USA. There are over thirty countries that have trade deals with the USA including the U.K and Turkey. This U.S. visa does not provide residency however it allows an individual to enter to manage and finance a business in the USA. An individual’s spouse and unmarried children under the age of 21 are also eligible to travel. A successful application will demonstrate that the investor’s sole purpose for entering the country is to run the enterprise that they have invested in. Usually, this is shown by the investor having a minimum 50% stake in the business or that they have operational control through a significant management role. The investment must be put into a new business. The investment must not be viewed as marginal in order to qualify and there must be some risk associated with it. It must also be proved that the funds have not been generated illegally. The investment must not be used to create one job solely for the individual and normally the business must employ 3-5 people and have its own premises as opposed to being run from the investor’s home.
This visa is valid for up to two years and there is an unlimited number of two-year extensions possible, providing that the E-2 criteria is still met. The investor is permitted to travel out of the USA and on re-entry to the county, an automatic 2-year extension will be granted. However, this does not apply to family members and therefore it is advised that they carefully monitor their length of stay remaining on their visa so extension applications are completed in plenty of time. The Investor must also declare their intent to depart from the U.S on expiry of the E-2 visa status.
As some countries such as India and China do not possess a trade treaty with the USA, their citizens do not have access to the E-2 Visa. Therefore, gaining citizenship by investment in a country that can access this visa is often the first step in securing an E-2 visa. When considering citizenship by investment (CBI), there are three countries that also have a trade agreement in place with the USA. These countries are Turkey, Grenada and Montenegro. Turkey’s gold standard CBI is currently the world’s most popular programme. There are three options for investors when looking to secure a qualifying Turkish investment. These are:
- $250,000 Property purchase
- $500,000 Bank deposit
- $500,000 Share purchase
Investing in real estate offers the cheapest option to become a Turkish citizen. The investment can be made in USD and is very appealing for investors. Citizenship usually takes between 3-6 months to gain however there is no requirement for investors to reside in Turkey once citizenship has been issued. CBI recipients will not need to declare the assets or income that they have in other countries making the application process straightforward. It is a very accessible citizenship option as there no restrictions on an applicant’s country of origin.
This visa is the quickest route to American citizenship as it provides a path to a green card. An EB-5 visa holder is entitled to live and work in the USA permanently with no restrictions on the state in which the investor can live. US laws must be adhered to and the investor must pay taxes. EB-5 visa holders must invest in a new commercial enterprise and the amount invested is at a minimum of $900,000. This commercial enterprise must have been established:
- After 29العاشر November 1990
- On or before 29العاشر November 1990 that was:
a) purchased and the existing business is restructured or reorganized in such a way that a new commercial enterprise result.
b) expanded through the investment, resulting in at least a 40% increase in the net worth or number of employees.
An applicant for the visa must demonstrate that the investment capital has come from a legal and traceable source. Checks completed by the authorities are much stricter than those required for the E-2 visa and therefore detailed documentation explaining the source of capital for the investment should be provided. The investment must create ten permanent, full-time jobs for American citizens. As seen with the E-2 visa, the investment must be at risk rather than remaining in a bank account. Applicants are subject to many background checks to ensure that the investor and their family have not broken any US immigration laws or have a past criminal record.
E-2 as a stepping stone to the EB-5
The E-2 visa is often considered a stepping stone to gaining an EB-5 visa. The initial investment into the E-2 company can count towards the investment amount required to access the EB-5. Personal funds invested in the business can also be included. However, money spent on salaries, equipment and any other expenditure cannot. The investor should pay themselves a salary and/or dividends, pay tax on that money and then re-invest it into the company, these funds would contribute to the EB-5 threshold. Leaving the company’s earnings as retained earnings is not considered “investment” for EB-5 purposes.
As the checks required to prove the source of the capital for investment under EB-5 regulations are very strict, complete transparency with regards to finances should be seen right from the start of the investors E-2 visa.