The E-2 Visa – The Entrepreneur’s Option

By: Attorneys Robert L. Reeves and Joseph I. Elias

As of the writing of this article, the House is pushing through a tough anti-immigration bill that will compete with other proposed friendly bills. The immigration system is more stressed and backlogged with the unavailability of H-1B visas and backlogs for green card numbers. Productive immigrants are finding avenues of working in the U.S. and contributing to the country more and more limited. Until meaningful immigration reform is passed, foreign workers must explore other options that they would not normally consider.

One option is the E-2 visa category. This is also known as the nonimmigrant investor visa. It is a temporary category that is granted in two-year increments with no limits on the number of extensions. In comparison, the H-1B is limited to six years. The E-2 category is available to citizens of countries that have a treaty of trade or commerce with the U.S. such as the Philippines.

An E-2 allows Philippine nationals to manage investments that are at least 50% Filipino owned. The visa requires that the U.S. investment be substantial and generates a substantial income. While there are no hard and fast figures on what the minimum investment amount is, the USCIS generally require a business investment of $100,000 or more, but the investment amount depends on the nature of the business. For example, opening up an automobile manufacturing plant would require several million dollars while opening up a CPA firm may only require start up costs of $75,000. This is why there is no fixed figure on a minimum investment amount.

The E-2 investor must show that its return on investment is more than what is necessary to merely support the investor in the U.S. Another example illustrates how this works. An E-2 investor wishes to establish a hotdog stand and will invest $25,000 to buy the equipment. He expects the hotdog stand to generate $90,000 in gross sales. This business would probably not qualify because the gross income generated would not be substantial. The hotdog stand would only generate enough money to support the investor.

Compare this to a business where the investor buys and runs a fleet of hot dog stands. He invests $95,000 setting up and equipping ten hotdog stands, and expects each stand to generate $90,000 in gross annual sales. This E-2 investment will generate $900,000 a year and will be seen as a substantial investment.

The E-2 investments may be in any lawful endeavor that will generate a substantial income. Some successful E-2s include professional services firms such as accounting or CPA firms, import-export companies, real estate management companies, retail stores, beauty salons, restaurants, and construction companies. The E-2 is not limited to these types of businesses, but rather by the amount of income it generates.

E-2s may include intercompany transferees in management or specialized knowledge positions. For example, a Filipino marketing manager may be transferred on an E-2 visa to the U.S. to fill a management position. The company must be majority owned and controlled by citizens of the Philippines. The manager does not have to be an owner of the company. Another example of a specialized knowledge professional is a programmer for a Filipino software consulting company. If the programmer knows special, proprietary knowledge of the Philippine company’s product, he can be transferred to the U.S. on E-2. Unlike the H-1B, the E-2 visa holder’s spouse can also obtain work authorization for the duration of their E-2 status. He or she may then work anywhere.

Because the E-2 is a temporary visa as opposed to a green card, E-2 managers can justify to the U.S embassy’s satisfaction the bringing of their household workers temporarily to the U.S. For many entrepreneurs setting up and establishing a new company in the U.S. is very time consuming. Knowing that trusted household workers can also travel to the U.S and help care for the entrepreneur’s children will provide added peace of mind.

The E-2 visa is beneficial to many who wish to work and conduct business in the U.S. It is not limited to just the owners of companies, but may be used by their managers and specialized knowledge workers. The process for obtaining an E-2 is complex and should not be attempted without a qualified immigration lawyer.