Our clients come to us from all over the world. Many, it turns out, are entrepreneurs and investors who wish to acquire or establish businesses in the United States but are not citizens or legal residents of the U.S.
In order to own and work in a business in the U.S., a foreign entrepreneur must apply for and receive an immigration visa from the United States Citizenship & Immigration Service (USCIS), an agency of the U.S. Government. One of the most important requirements of the immigration authorities is that the visa applicant must submit a business plan as part of the visa petition or application. You may recall two of our earlier posts on the topic, You Can Live and Work in the U.S. and The Heart of Any E-2 Application, and we thought that this would be a good time for an update so that we could reflect on some important questions that seem to arise with each E-2 related business plan that we prepare.
A Bona Fide Enterprise
According to USCIS, a business which an E-2 investor applicant wishes to acquire or start must be a bona fide enterprise. The immigration authorities define bona fide enterprise as “a real, active commercial or entrepreneurial undertaking which produces services or goods for profit. The enterprise cannot be an idle investment held for potential appreciation in value, such as undeveloped land or stocks held by an investor who has no intent to direct the enterprise.” This is usually not a problem for our clients. In most instances they are bringing their experiences and skills from their home country and employ them here to the benefit of our Country’s economy.
Another requirement for an E-2 visa is that the business will not be “marginal.” USCIS defines a marginal enterprise as not being large enough to generate enough income for the investor to support a minimal living “for you and your family or to make a significant economic contribution.” In other words you need to be able to support yourself and your family from the business. You must demonstrate that your business is non-marginal through your detailed business plan, tax returns, financial statements, or payroll summaries.
USCIS also requires that you “demonstrate that the capital you invest is irrevocably committed to the enterprise and subject to partial or total loss in the event that the entity fails. The funds you invest must also be your own. Additionally, the invested funds must be substantial in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise you are considering.”
Here are two resources you should study further if you want more details on these matters:
In addition to the selected USCIS requirements listed above, here are a few tips that come from our experience in working with immigrants:
- We recommend that before you agree to acquire or start a business in the U.S. or hire us to write your business plan, you should hire an immigration attorney. The attorney you choose should be carefully selected and come with good references.
- For a number of obvious reasons, it is a good idea to be an expert in or at least know a great deal about the business or market you are about to invest in. In the instances that this is not possible you should consider the acquisition of a franchise. When you purchase a franchise, you are paying for the expertise of the franchisor. It is their job to teach you about the business, the industry, the competition, and the market.
Moving to a new country is a great challenge. The move can be made a bit easier if you have partnered with a reputable attorney and perhaps a franchisor, each of which can help ease your way.
Our final thoughts for today are this: applying for an E-2 visa will always take more time than you think and cost more money than you expect. Be sure to budget both your time and your money accordingly.
Related Services: Immigration & Investor Visa Business Plan Consulting.