Monday, October 13, 2008 Reeves: The E-2 visa: The entrepreneur’s option By Robert L. Reeves
THE United States has long been a country that attracts international entrepreneurs.
Immigration law provides several mechanisms for investors to place key personnel in the US, including the investors themselves. One option is the E-2 visa category. This is also known as the non-immigrant investor visa. It is a temporary visa status that is granted in two-year increments with no limits on the number of extensions.
In comparison, the H-1B specialty worker is limited to six years and the L-1A inter-company transferee is limited to seven years for executives and managers. Also, unlike the H-1B, the E-2 visa holder’s spouse can obtain work authorization for the duration of E-2 status. He or she may then work anywhere in the US.
The E-2 category is available to citizens of 82 countries that have a treaty of trade or commerce with the US, such as Japan, Taiwan, United Kingdom and the Philippines.
An E-2 allows Philippine nationals to manage investments that are at least 50-percent Filipino-owned. The visa requires that the US investment be substantial and generates a substantial income. The investment amount depends on the nature of the business.
While there are no hard and fast figures on what the minimum investment amount is, the USCIS generally require a business investment of $100,000 or more. For example, opening up an automobile manufacturing plant would require several million dollars while opening up a CPA firm may only require start-up costs of $75,000. This is why there is no fixed figure on a minimum investment amount, but the larger investment generally insures a more favorable decision.
The E-2 investor must show that its return on investment is more than what is necessary to merely support the investor in the US. Another example illustrates how this works. An E-2 investor wishes to establish a hotdog stand and will invest $25,000 to buy the equipment. He expects the hotdog stand to generate $90,000 in gross sales. This business would probably not qualify because the gross income generated would not be substantial. The hotdog stand would only generate enough money to support the investor.
Compare this to a business where the investor buys and runs a fleet of hot dog stands. He invests $100,000 setting up and equipping 10 hotdog stands, and expects each stand to generate $90,000 in gross annual sales. This E-2 investment will generate $900,000 a year and will be seen as a substantial investment.
The E-2 investment may be in any lawful endeavor that will generate a substantial income. Some successful E-2s include professional services firms, such as accounting or CPA firms, import-export companies, real estate management companies, retail stores, beauty salons, restaurants and construction companies. The E-2 is not limited to these types of businesses, but rather by the amount of income it generates.
E-2s may include inter-company transferees in management or specialized knowledge positions essential to the US operations. For example, a Filipino marketing manager may be transferred on an E-2 visa to the US to fill a management position. The company must be majority owned and controlled by nationals of the Philippines. The manager does not have to be an owner of the company.
In addition to managers, one may qualify as an essential specialized knowledge employee. For example, a programmer for a Filipino software consulting company who knows special, proprietary knowledge of the Philippine company’s product, can be transferred to the US on E-2.
Since the E-2 is a temporary visa as opposed to a green card, E-2 managers can justify to the US embassy’s satisfaction the bringing of their household workers temporarily to the US. For many entrepreneurs, setting up and establishing a new company in the US is very time consuming. Knowing that trusted household workers can also travel to the US and help care for the entrepreneur’s children will provide added peace of mind.
The E-2 visa is also beneficial to many who wish to work and conduct business in the U.S. It is not limited to just the owners of companies, but may be used by their managers and specialized knowledge essential workers. The process for obtaining an E-2 is complex and should not be attempted without a qualified immigration lawyer.
