Seven great things and three not-so-great things about the E2 Visa
If you’re reading this article, chances are you are doing your homework on the E2 visa. Maybe you’ve already purchased a business or invested in a new business; or maybe you are simply trying to figure out if the E2 visa is the best option for you and your family. The E2 visa is an amazing visa with a lot of perks, but it’s not perfect. (If you want to know the dirty truth, there is no “perfect” visa.) In my humble opinion, the E2 visa is one of the best options for those wishing to live and work in the US. Why? It’s (relatively) cheap and fast. And, it’s renewable indefinitely! So, let’s dig into this E2 visa and discover the great (and no-so-great) things about the “treaty investor” visa.
Great things about the E2 visa
- It’s relatively cheap. The E2 visa is relatively cheap when it comes to investment. The EB-5 visa, which is the one that gets the most press when it comes to investments (just ask Donald Trump’s son-in-law), requires a minimum of $500,000. And, the government is always threatening to increase that number. Contrastingly, the E2 visa has no minimum requirement. Attorneys with E2 visa experience will tell you that you should plan on investing $100,000 at a minimum. (Yes, it’s possible to invest less, but it increases your chances for a denial.) This is only 20% of the investment of the EB-5. Not too shabby! Additionally, this investment can come from any legal source, including gifts, inheritance, savings, even loans (but not based on the business). Many of my clients get the money from a variety of sources.
- It’s relatively quick. As those who have attempted to immigrate to the US based on a familial relationship can tell you – immigration isn’t fast. It’s a very slow process. For some, the wait can be decades. Even for spouses, the wait can be a year or longer. Not so with the E2 visa. In most cases, government processing times are 2-6 weeks. So, from the moment you decide to come to the US to the moment you are on the airplane with your E2 visa can be as little as 5 weeks (my personal fastest E2 visa process).
- No minimum number of US employees. Yes, you do need to hire employees; but you don’t have to have any employees at the time you first apply for the visa. The number of employees you need to have before you renew will vary depending on the business and upon the business plan you originally submit. That said, it’s usually recommended that you have at least two full-time US employees (not contractors) and probably one or two part-time US employees. Contrast that to the EB-5, which requires a minimum of 10 full-time US employees.
- Your spouse can work anywhere. When you get the E2 visa, your spouse can come with you as a derivative E2 visa holder. He or she will then apply for a work permit. Although those are taking about 4-5 months right now, once your spouse receives this permit, he/she can work anywhere. That’s right. Your spouse will be able to work anywhere he/she pleases. No additional immigration hoops to jump through. This is a huge bonus for an investor who comes to the US using personal savings and knowing that the first year or two of the business won’t be incredibly profitable. Your spouse can help with household income in whatever field he/she likes.
- Any legal, for-profit business is fine. The E2 visa is OK for whatever you want to do, in any US location you want to do it. Interested in buying a dry cleaning business in Lincoln, Nebraska? Want to start an online marketing company in Honolulu, Hawaii? Yep. How about a commercial embroidery business in Tampa, Florida? That works, too. You can start a business from scratch (which is usually must faster) or buy an existing business. It’s all up to you! When someone comes to our firm without a business in mind, I tell him/her to pick a business that 1) he/she enjoys AND 2) he/she can make successful. When it comes to location, think about cost of living, weather and business climate. This article may help you decide.
- You can have a US business partner. Yes! As long as you are “in a position to direct and develop” the business, and you have control over the business, you can have a US business partner. Typically, I recommend that you have a 51% ownership in the business in order to easily show control. However, there are other ways to show control.
- The E2 visa is renewable indefinitely. Thinking about watching your US citizen grandkids graduating from college someday? The E2 visa can help you get there. This visa can be renewed forever, as long as the business is still successfully operating and you are still controlling, directing and developing the business. There are investors who have been in the US on an E2 visa for decades. It’s a wonderful way to have permission to live and work in the US for decades to come.
Not-so-great things about E2 visa
- Inherent risk. The E2 visa is based on risk. Having your money “at risk” is one of the requirements. Why? Because the US government wants to make sure that you will hustle and make this business successful. So, the investment needs to be made before you get the visa. The money needs to be spent. This is one of the key elements. Not really any way to get around it. But, as an entrepreneur and someone who is considering moving to a different country (and in many cases, a different continent), you are no stranger to risk.
- Your kids age out. Your kids can come with you as dependents. They can live and go to school in the US. However, they can’t work in the US and, on their 21st birthday, they “age out.” This means that they will no longer be eligible to live in the US on the same visa. That said, many people switch their children over to F1 visas (student visas) toward the end of their 20th This will give them permission to be in the US and study. After they graduate, they will once again need to figure out how to stay in the US or return to their home country. Although it may seem like a long time from now, you should start planning for your kids’ future. It’s crucial to have an immigration plan for them from their 21st birthday onward.
- It will never become a green card. The E2 visa will never “turn into” a green card. As long as you are an E2 visa holder, you will need to be running a business in the US. You can’t sell the business or stop working. That said, there are other ways you may be able to get a green card. Some of the more popular ways: your US citizen child turns 21 and petitions for you to become a permanent resident; you invest more money in your business and apply for the EB-5 investor visa (which is a green card); your business becomes very successful and you self-petition for an EB-1 visa (extraordinary ability); your spouse comes over, gets a job and his/her employer offers to sponsor him/her for a green card. There are several ways to get a green card, but simply being in the US for years or even decades on the E2 visa isn’t going to result in permanent residence.