First things first: the investor will be required, early on, to demonstrate a substantial investment of his own, personal funds has been made to the business. Further, it must include some risk to the investor’s funds and must be earmarked exclusively to the development of the enterprise. This also means it is difficult to specify a number. Larger investments where the total capital investment is more than, say, $500,000, “the percentage of total investment would be lower to meet the substantial investment requirement than that required for smaller investments,” according to immigrationvisa.com.
Please note that any E1 & E2 investor visa attorney will tell you that securing an E2 visa with an investment less than $100,000 is very difficult. Of course, the type of business and the investment itself will vary, but if the investment does not reach this threshold, note that it could be challenging. Remember that visas cover any number of sectors – countless companies within those sectors – and therefore, no two application packets are exactly the same. In fact, it is often difficult to provide even “ballpark” estimates or guidelines because they simply do not exist. Franchises to shipping companies to retail clothing – no two business are the same and no two needs are the same.
Many wonder how the game shifts if it is a business that is already in existence. In these instances, the investment itself is the purchase price; however, there are some options for financing if needed. This, however, is allowed solely at the discretion of the Consular Officer. Again, keep in mind that there is no way to provide specifics. According to investorvisausa.com, “a rough guideline is that financing should not be more than 25-30% of the total purchase price for an investment of between $100,000 and $500,000.” This is based on how it relates to the assets and other financing. Additional borrowing, which is unsecured by the business assets, is also permitted. The higher the purchase, the greater percent of allowed secured financing is permitted. A $1 million shipping company could potentially be approved with half being financed.
When an investor is building a new business from the ground up, the investment must be the amount of required capital to establish that business in a way that deems it operational. There are always significant costs, even if they are varied. An investor would be expected to have leased business premises, perhaps bought equipment and furnishings prior to filing the visa application for, say, a restaurant. Investorvisausa.com also says that if it is a business similar to “a pool service business, an investor may only need to lease premises, buy office equipment and a vehicle, and put funds in a business account for working capital.”
Of course, there will be challenges and a few drawbacks, but if a new business can navigate those challenges early on, the odds of the business running into problems, from this perspective anyway, are considerably lower as they move forward. The key is to be prepared to prove the necessary investments and understand it will require more than a deposit slip for money deposited into a new business account.
For more information, speak to an experienced E1 & E2 investor visa lawyer today.