The applicant must make a substantial investment to qualify for the E2 investor visa. However, the law does not state a minimum dollar amount. Generally, the applicant should be prepared to invest at least $100,000 US dollars in the enterprise to have a good E2 visa case. The actual amount required will depend on the type of business the investor chooses. Investments less than $100,000 may potentially qualify for some low cost start-up businesses.
A substantial investment is defined as an amount sufficient to ensure the investor’s financial commitment to the successful operation of the enterprise as measured by the proportionality test. This proportionality test compares the total amount invested in the enterprise with the cost of establishing a viable enterprise of the nature contemplated or the amount of capital needed to purchase an existing enterprise.
Such comparison constitutes the percentage of the treaty applicant’s investment in the enterprise. That percentage must compare favorably in the fashion of an inverted sliding scale starting with a high percentage of investment for a lower cost enterprise. The percentage of investment decreases at a gradual rate as the cost of the business increases. An amount of capital invested in an enterprise is merely presumed to be substantial when it meets or exceeds the percentage figures given in the following examples given in US dollars:
• 75 percent investment in an enterprise costing $500,000 or less. If the cost of the enterprise is substantially lower than $500,000, 85 percent to 100 percent investment may be required.
• 50 percent investment in an enterprise costing more than $500,000 but no more than $3 million.
• 30 percent in any enterprise costing more than $3 million.
A multi-million US dollar investment by a large foreign corporation is normally considered substantial, regardless of the examples given above.
The amount invested in the enterprise should be compared to the cost (value) of the business by assessing the percentage of the investment in relation to the cost of the business. If the two figures are the same, then the investor has invested 100 percent of the needed funds in the business. Such an investment is substantial.
The vast majority of cases involve lesser percentages. The proportionality test can best be understood as a sort of inverted sliding scale. The lower the cost of the business the higher a percentage of investment is required, whereas, a highly expensive business would require a lower percentage of qualifying investment.
There are no bright line percentages that exist in order for an investment to be considered substantial. Yet, as stated above, the lower the cost of the business the higher the percentage of qualifying investment is anticipated. Thus, investments of 100 percent would normally automatically qualify for a small business of $100,000 or less. Yet, a business of this size involving two equal partners or joint ventures may prove qualification for E2 investor visa status. At the other extreme, an investment of $10 million for a $100 million business would likely qualify for E2 visa based on the sheer magnitude of the business itself.
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The information on this website is not to be considered legal advice. Such information is intended to educate members of the public generally and is not intended to provide solutions to individual problems. Readers are cautioned not to attempt to solve individual problems on the basis of information contained herein and are strongly advised to seek advice from an experienced immigration attorney regarding specific case situations.
