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How Much do I need to invest?
This is the perhaps the most commonly asked question in relation to the investment requirements for an E2 visa. The answer however is that there is no specific minimum amount sufficient to qualify you for an E2 visa.
Many Attorneys band figures of above a minimum amount of $100,000.00 (Forbes.com suggest an even higher figure of $150,000.00) to qualify when nowhere in the E2 requirements does it state that or any amount of funding in fact the United States Embassy in London says:
“The applicant must be coming to the United States to engage in substantial trade, including trade in services or technology, in qualifying activities, principally between the United States and the treaty country (E-1); or to develop and direct the operations of an enterprise in which the applicant has invested or is in the process of investing a substantial amount of capital (E-2).”
So how does that work? The term Substantial is the key word in working this one out. If the business you wish to purchase has an annual turnover of $1Million and a profit of $200,000.00 but the investment you are making is only $20,000.00 that would not be considered to be substantial.
However, if you were making an investment of $700,000.00 it would be considered substantial. This would also apply if the business had a turnover of $70,000.00 and a profit of $50,000.00 and you were making an investment of $40,000.00.
However you would have to work very smart to ensure that the business grew enough to qualify for a renewal when it was due. Your funding also has to be committed to the purchase of the business you are buying or in place to buy items for the set up of a start up business.
So why do Attorneys quote such high figures? Simply because it makes their job easier and many quote their fees based on the amount you invest. Here at E2 Visa Express our fees are transparent and constant regardless of your investment amount and we work hard on all of the applications we prepare.
In order to meet the investment requirements you will also have to show where your funding has come from. A full money trail has to be provided from the source of funds to where it is being held in the USA (usually an escrow account is set up by your business broker where the funds will sit until closing on your business is completed).
Funds can come from various places, such as a Gift, savings or a property sale, however they can not be a loan that does not put your funds at risk, i.e a loan means that the loan grantors funds are at risk and not yours.
Marginality is where a business is considered to be doing nothing more than creating a job for the E2 investor and shows very little potential to grow beyond this in years to come.
When considering your E2 application the adjudicator will look to see that your company is going to do more than just give you a job. They want to see that it is possible that the company can grow and employ American workers and make a positive impact the on local economy in some way.
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E2 Treaty Investment Examples
1. Ice Cream Parlour
“Peter” wanted to purchase a small beachfront Ice Cream Parlour in Clearwater Florida.
The business was being sold for a low figure as the owners had to sell it fast due to a family issue. It was on the market for $50,000.00 and showed a turnover of around $75,000.00 and a profit of $35,000.00.
Peter had visited the Ice cream Parlour several times to observe the traffic and service it was offering. He was able to identify some issues that could be holding back the business and decided he could improve it and possibly even expand it.
- The price of the business is very good.
- It shows good growth potentially.
- Extended operating hours will increase the level of income greatly.
- This should qualify for a E2 visa.
- The current level of profit will need to be increased before a renewal can be achieved.
- As well as growth at least 1 employee will need to be added before renewal.
- A strong realistic immigration business plan will be needed to show that the level of investment is not marginal.
- Competition in the area can be strong
2. Property management company
This property management company services 50 short term rental homes in a popular vacation destination, it is priced at $475.000.00 and has an annual profit last year of $350.000.00. It has been trading for 6 years and has a good track record. The investment is substantial and should be E2 visa approvable.
- Company has good history
- Has Payroll
- Not marginal and investment is substantial
- Should qualify for E2 visa
- High cost to purchase
- Management contracts are for only 30 day incriments
- High staffing levels
- Possibility of losing contracts
3. Laundry services
A Commercial Laundry service that has been operating for 5 years and is on the market for $145,00.00.
With a turnover last year of $875,000.00 and profits over $400,000, on the face of it it looks like a great deal, but, the investment could be seen as not substantial enough for the business and would take a considerable amount of convincing at the Embassy that the business is genuine.
The real price tag on this business should be around $500,000.00 to make it a viable E2 business.
4. Mobility Scooter start up
Gary started a Mobility Scooter business renting out mobility scooters to vacationers in a vacation area. He started by investing in 5 mobility scooters and purchased a used vehicle to deliver the scooters to his customers.
His initial investment was only around $25.000.00 but we prepared a strong realistic business plan and financial projection. Gary received a 5 year visa from the London Embassy and as long as he is able to show growth and expansion in that 5 years and we present the application correctly he should receive a renewal with ease.