Business Law

Why E-2 Visas Might be the Best Choice for an Investor Visa in 2020

In our E-2 investor series, we will take a look at a variety of topics that may be of interest to a potential E-2 Visa investor.  Some of the topics we will cover are: why E-2 Visas are growing in popularity; the important legal considerations for E-2 Visa investors; the important clauses every E-2 Visa investor should have in their operating agreement (and why they need an operating agreement to begin with); the types of businesses an E-2 immigrant investor might consider investing in; the tax implications of business investments for E-2 investors; and, other topics that may be important to E-2 investors (or the businesses that work with them).  In this post, we will touch on some recent changes to EB-5 regulations, which will (most likely) make E-2 Visas more attractive to investors looking to move to the United States.

The Reason E-2 Visas Will Likely Become More Popular

Recently (in November of 2019), the Department of Homeland Security (“DHS”) amended regulations governing the employment-based, fifth preference (“EB-5”) immigrant investor classification and EB-5 associated regional centers to reflect recent statutory changes and generally modernize the EB-5 program with the “EB-5 Immigrant Investor Program Modernization.”  In a nutshell, the DHS’ final rule (among other things) increased the minimum EB-5 investment amount (in a targeted employment area) from $500,000 to $900,000 (rather than the $1.35 Million figure the DHS proposed before arriving at the final figure). This blog post will not go into further discussion regarding the complexity of EB-5 Visas, but we needed to discuss this particular change to properly express part of the reason why E-2 Visas will likely increase in popularity.

For some of our firm’s immigration clients, looking to do business in the United States, a popular investor visa to consider is the E-2 Visa.  An E-2 Visa is a “non-immigrant visa” available to an individual foreign entrepreneur of a treaty country (a country that maintains a treaty of commerce and navigation with the United States).  The E-2 allows the entrepreneur in question to be admitted to the United States, with a long term Visa, when that entrepreneur will be investing a “substantial amount of capital” in a U.S. business.

How Much Do You Need to Invest in an E-2 Visa?

How much is a “substantial amount of capital?”  There is no set minimum, according to the US Citizen and Immigration Services (“USCIS”).  The USCIS, on their website, defines “substantial amount” as: “substantial in relationship to the total cost of either purchasing an established enterprise or establishing a new one; sufficient to ensure the treaty investor’s financial commitment to the successful operation of the enterprise; or, of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise.”  So what exactly does this all mean? Generally speaking, our experience has found that a minimum of $100,000 should enable an E-2 investor to qualify for an E-2 Visa. We have also seen approvals for some investments as low as around $50,000, but those can be rare (although you should always keep in mind that each application is individually reviewed and is subject to approvals by the USCIS, and past results are no indication or prediction of future outcomes; results vary by client).

You may be asking yourself: “why is there no specific amount?”  The reason is that the USCIS assesses each application and decides whether the E-2 investor has invested enough capital using a proportionality test.  In coming to its decision, the USCIS reviews the total capital required to start a similar business and then decides if the E-2 applicant’s investment is “substantial” by comparing the amount the E-2 investor plans to spend or invest to the the total capital expenditure needed to set up a similar business. 

Let’s look at an example to clarify: the amount of initial investment needed to start a service-based business (e.g.: a bookkeeping business, a property management business, or a consultancy business) is much less than the amount of initial investment required to start a manufacturing business (e.g.: a factory producing consumer packaged goods, a car dealership with a large inventory of vehicles, or a construction business).  Therefore, an E-2 investor planning on investing in a bookkeeping or property management franchise will have a lower requirement in comparison to an E-2 investor considering a business with a higher average initial investment.  

The initial investment can be split up in reasonable ways that also make sense related to the specifics of the type of business.  Some of that initial investment can be used for equipment, furniture, leases and other reasonably necessary items, and even cash deposited in a business bank account.  Cash in the business’ bank account may not work in all cases, and will most likely need to be a reasonable amount designated as working capital (again, by “reasonable” we mean an appropriate amount for the industry the investor is investing in).  Generally, you can only apply the actual amount of capital spent on rent (actual money initially invested may be included in the investment amount). Intangible assets may also be included in the E-2 investment amount, although you must substantiate the value (which is sometimes difficult to do). 

Other Factors to Consider

Another important factor to keep in mind is that all E-2 Visa-related capital investments must be “at-risk.”  For the initial E-2 investment amount to be considered “at-risk” the E-2 Visa applicant must “irrevocably commit” the initial capital to the business enterprise they want to start or buy (making it difficult for the E-2 applicant to simply walk away from the investment after they have received their Visa).  “At-risk” also means that the capital contributed to the business, which is being used for the E-2 Visa, cannot be secured by assets from the business.

Something else to remember is that keeping records of all of the expenditures is critically important as the USCIS will want to see evidence of the expenditures claimed.  Additionally, investment amounts are only one part of the E-2 application process. Other factors considered by the USCIS are: whether the business (the investor is considering already has U.S. workers; whether the investor can mitigate the risk associated with filing an E-2 petition with a low dollar amount.


The main reason that we believe there is a reasonable likelihood that E-2 Visas will increase in popularity is because of the difference between an E-2 Visa and and EB-5 Visa’s minimum investment.  This difference in initial investment combined with the fact that EB-5 Visas are hitting the EB-5 cap limits (the US government has a cap on the EB-5 visas, allowing a maximum of 10,000 EB-5 Visas per year), whereas there are currently no cap limits on the amount of E-2 Visas that the US will issue.  Timeframes are also significantly shorter for E-2 Visa applications (frequently averaging around 3 to 6 months) and normally dependent mostly on how long the applicant takes to gather and submit documents, whereas the EB-5 Visa application process can frequently average 2 to 14 years. All of these factors, coupled with the reduced minimum E-2 investment, make the E-2 a straightforward, fast and attractive option for investors (from a treaty country) looking to invest in a US business.

If you are interested in getting more information about the E-2 Visa process, are looking for an attorney to help you invest in a business (including a franchise) in the United States, please contact Lopes Law LLC at or call us at 267-777-9117.

Please note that if you have a legal matter that you need assistance with or advice you should contact a competent attorney, licensed to practice law in your jurisdiction, who may provide competent legal advice.  For more information, please read our Blog and website disclaimer.

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