The E2 Investor Visa can be an excellent way for early-stage bootstrapped startups to hack a startup visa. The pros: it’s available year-round, renewable indefinitely, open to majority or sole owners, and frequently granted to companies that can show a strong business plan, even it they aren’t in full-swing operations yet. The cons: it’s only available to citizens of certain countries (China, India, and Brazil aren’t on the list) and it must be initially financed with money coming from citizens of that same country (as opposed to US angel or VC funding).
There are two ways to qualify for an E2 visa: 1) as the principal investor, and 2) as an employee. In this post, I’ll explain the requirements for the principal investor route. The “principal” investor route is an excellent option for founders who have invested their own money (more on what this means below) in the startup, and will be actively involved in its development. Here’s a rundown of the main requirements:
Citizenship: You must be a citizen of an E2 treaty country. (Look at the list closely–a few countries on this list only have an E1 treaty with the US.) Being a legal permanent resident of a treaty country is not enough.
Ownership: The company must be at least 50% owned by citizens of the same treaty country that you qualify under. (For E2 purposes, people who hold US green cards do not qualify as citizens of a treaty country, even if they hold a treaty country citizenship.)
Personal Investment: To count towards a principal investor E2 visa, the money invested must come from the E2 applicant personally. This means that before it is invested in the company, the money must have been unconditionally controlled by the E2 applicant. This money can come from any legal source. Money that originated as a gift from friends, family, or cofounders works. A loan personally secured by the E2 applicant works. Money saved from wages or obtained from the sale of assets works. On the other hand, a loan secured by company assets, money invested directly by friends and family, money invested by another company you own, or angel/VC funding directly invested in the company does not qualify.
Substantial Investment: As an E2 principal investor, your investment must have been “substantial.” This investment can be in the form of cash, physical items, or intellectual property like patents. Unlike investment for the EB5 green card, there is no particular dollar amount that must be invested for an E2 visa. Instead, you must show that the amount you have invested is “substantial” in comparison to the amount required to get the company up and running. For a business that requires expensive equipment and inventory to get started, this amount might be very high. For a tech startup that in reality needs little more than a laptop and an internet connection, this number might be much lower. In any case, the investment must be a high enough number to ensure that the E2 investor has an incentive to work to make the company a success. My next post will be about
Irrevocable: You must be able to show that the investment you have personally made is “irrevocable,” meaning you can’t take it back. The easiest way to satisfy this requirement is to show that the money has already been spent on things like equipment and other startup costs. Some investors are hesitant to spend money before being guaranteed a visa. In this case, it is sometimes possible to place the money in an escrow account, under the condition that the money will automatically be spent in specific ways for the company if the E visa granted, and will be returned to the investor only if the visa is denied. What the Department of State doesn’t want to see is a lump sum sitting in a corporate bank account with nothing spent yet. The Department of State frequently takes the position that money in the company’s operating account could simply be easily taken out and returned to the investor at any point, so it has therefore not been “irrevocably” committed to the company.
Non-marginal: You must be able to show that within a few years the company will be doing more than simply supporting the E2 holder. This is commonly satisfied by showing that the company expects to hire US employees.
Direct and control: You must show that you will be “directing and controlling” the company. A common way to prove this is to show that you own at least 50% of the company and will have a leadership role, such as CEO.
If you think think you might be able to put together enough money to invest in your own company, the E2 visa can be a great option to try for, since it is renewable indefinitely, and does not require you to give away equity or control. If you are from a treaty country but will not be able to invest your own money, an E2 visa for employees might be an option for you, so check out my future post!