Unlike some countries that offer citizenship to individuals who make a large enough investment in the country, the United States will accept your business and investment dollars and in return will not make you a resident or citizen.
As you probably already know, the United States has high taxes and is one of the only countries in the world that taxes based on citizenship, which means that no matter where you go, you will always have to report and pay taxes to the United States government.
Therefore, for high net worth individuals looking to invest in the United States, being or becoming a US citizen can actually be a risk.
Officially known as the E-2 Treaty Investor Visa, the visa allows certain foreign investors to bypass citizenship-based taxation and many (but not all) U.S. reporting requirements by granting investors a nonimmigrant visa.
The E2 visa will allow the applicant to live in the United States for part of the year, as well as invest and do business in the country.
For these and many other reasons that we will discuss in this article, the goals of the E2 visa can be a good opportunity for American business owners looking to renounce their citizenship without losing the privilege of spending time and doing business in the U.S.
It may be an even better option for non-US citizens interested in accessing the US market without taking on the full tax burden that comes with being an American.
So if you want to waive or are already a non-US citizen and have business interests in the US, consider adding an E2 visa to your passport. In this article we will show you how to do just that.
What is the E2 visa for investors?
When doing business abroad, paying taxes and dealing with the rusty American bureaucratic machine can become a huge waste of time and money. Many entrepreneurs prefer not to deal with the stress, the paperwork or the taxes.
But what happens if you still run businesses in the United States or plan to open a business there in the future?
Usually, a trader visa or an investor visa, such as the E1 and E2 visas, are your best options. Today, we will focus on the E2 visa because it is open to a wider variety of entrepreneurs.
The E2 Investor Visa allows an investor to live and do business in the United States in exchange for a "significant investment" done for the country's economy.
Technically, there are no restrictions on the type of business you can buy or start as an E2 visa applicant. And you can often get away with making a much smaller initial investment than you would with other programs, such as the EB5 immigrant visa.
That said, the visa requires an active effort on your part. The E2 visa is designed for those who have active business interests in the United States and need your physical presence to run the business.
You should be careful about how much time you spend in the US actively managing your business to avoid becoming a tax resident. In general, reduce the time spent in the U.S. by four months or less and you can enjoy all the benefits of the E2 visa without become a tax resident of the United States.
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Who should consider applying for an E2 visa?
The US E2 visa is designed for individuals who have active business interests in the country. Unlike other investor visa programs, passive investments such as stocks and bonds will not grant you eligibility for the E2 visa.
More importantly, this visa is for those who don't want the full tax burden that comes with immigrant or citizenship status in the United States.
As discussed, the E2 Visa is a potential alternative solution for those who wish to renounce their United States citizenship while continuing to run their business based in the United States.
This will give you some tax relief, but you will still need to pay all related taxes on US-based income.
That said, it is a more interesting program for non-US citizens who wish to spend more time in the United States and who have legitimate reasons for needing physical access to US markets.
If you want to start a business in the United States, it may be a good option for you.
Whatever your situation, you will need a team of professionals who know how to handle all the tax and legal nuances involved. Most accountants will not know how to handle your E2 business taxes.
How to get an E2 investor visa
One of the best and worst things about applying for an E2 visa is that not all requirements are immutable.
This means that there is a lot more flexibility in the type of entrepreneur who can apply, but also a lot of assumptions. We will delve into some of the requirements for this visa below:
The general requirements
The main requirement for this visa is, of course, hold a passport from an E2 treaty country. The second requirement is invest "a substantial amount of capital" in a company in the United States.
The United States Citizenship and Immigration Services (USCIS) are not exactly clear about the exact dollar amount they require.
However, they do provide some guidelines to help you determine how much you should invest. Above all, the amount should be sufficient to demonstrate your financial commitment to the venture.
Basically, your investment must show that if the business fails, you will feel the pain and therefore have the incentive to make the venture financially viable.
The amount invested must also be enough to show that you "will develop and run the enterprise successfully". But ultimately it depends on the type of business you are starting.
Third, the reason for entering the United States must be "develop and direct the investment company".
To establish your commitment to your investment, you must prove that you have at least a 50% interest in the business or demonstrate significant operational control over the business.
While some investment visa programs allow you to make a philanthropic investment in an NGO, this is not the case with the E2 visa.
Your investment must be made with the intention of generating profit and with the possibility of financial loss to the investor in case of failure of the venture.
In addition, the business you are launching should ideally generate jobs for US citizens. You must also be able to demonstrate that the business will provide a minimum living for you and your family.
The company does not necessarily need to generate this revenue at the time of investment, but it must be able to generate sufficient revenue within five years.
Finally, your company must prospect from a profit margin beyond just covering your personal expenses. The USCIS wants to see if your company can provide an economic benefit to the US.
If you can do all this, you may just qualify for the E2 Investor Visa.
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Adding employees to your E2 visa application
If you want to bring employees to the US to work in your company, the E2 visa process can also cover them. Here is the problem: all employees who wish to simultaneously apply for an E2 visa must be of the same nationality as the investor.
An employee that you bring in on an E2 visa must serve in a supervisory or executive role within the company or have special qualifications that make them essential to the operation.
In essence, you must be able to prove that there is a valid reason for bringing said employee with you and that he or she possesses skills not available among American workers.
Can I participate in other businesses?
Can you engage in other business interests while in the US on an E2 visa? Basically, no.
With an E2 visa, you can only work within your approved company. The situation is somewhat different for employees who are potentially allowed to work for subsidiaries or the parent company of the original company.
Understand the application process step by step
The first step in applying for the E2 visa is to fill out the non-immigrant visa form, also known as the DS-160, online and submit a passport photo.
The application must be completed entirely in English. You must also pay the application fee and print the receipt.
When you complete the online application, you will receive a digital confirmation. Print this document and bring it with you to your visa interview at the U.S. embassy or consulate.
The confirmation page should contain a barcode, which the immigration officer will use to locate your application.
The next step is to contact the nearest US consulate or embassy to schedule an interview.
Each particular embassy/consulate may have additional application requirements, so check with them for a more detailed understanding of what documents to bring with you.
In some cases, you will also need to print and fill out the Non-Immigrant Treaty Trader Application, which allows you to explain your investment and business plan before the interview.
1. Gather your documents
When filling out Form DS-160 online, you will need to have various documents and information nearby, including your passport, travel itinerary, dates of your five previous trips to the US, and any previous US visa applications.
You will also need to provide a copy of your most recent resume, which should demonstrate your business experience. You will also need to prove that you own at least 50% of the shares in the venture and provide a business plan.
The documents you need for your visa interview vary according to the consulate you are applying to and your nationality. The immigration officer also reserves the right to request any additional documents that he or she deems necessary.
The general documents everyone needs at the interview are a passport, confirmation of your non-immigrant visa application, the Nonimmigrant Treaty Investor Application, and receipt of the application fee.
You will also need to present not only proof of funds, but also the source. This is quite common for most investment visa programs, since no country wants to host criminals.
2. Conduct the visa interview
At the interview, the immigration officer will determine whether you are suitable for a E2 visa.
He may ask for more documents or indicate that your application needs further administrative processing. In this case, any problems will generally be resolved within 60 days.
Be sure to triple check your application before you submit it and schedule an interview.
If you made a mistake when filling out your form, you may be asked to leave, try again, and schedule another appointment - obviously a huge frustration and waste of time.
While there is no telling how long the US immigration and consulate professionals will keep you waiting, if all goes well, the interview itself should only take a few minutes.
If your spouse and children over the age of 14 are also applying, they will also need to accompany you to the consulate or embassy for an interview at the same time.
Your embassy/consulate may also require them to do an interview, which can cause a lot of scheduling problems.
3. Pass the process
If your application is approved on the spot, you will be asked to drop off your passport at the consulate/embassy, as well as your spouse and children.
You will also have to pay an additional fee to cover the visa. The immigration officer will tell you whether you must pick up your passport and visa in person or whether it will be mailed to you.
If you thought that being approved for a visa was your golden ticket to the United States, we regret to inform you that this does not technically guarantee your entry into the United States.
After you arrive, you can still be turned away at the port of entry by a U.S. Customs and Border Protection (CBP) officer.
In the vast majority of cases, you won't have much to worry about as long as you don't bring any agricultural products or any other prohibited or illegal items with you.
If you are allowed to enter, your passport will be stamped, which means that your visa period has begun.
Unless you apply for an extension of your stay, staying in the United States beyond the visa period can result in serious consequences, including ineligibility for any other future visas.
The pros of getting an E2 investor visa
O E2 visa is a really solid option for those who want to do business in the United States, especially for those who have no interest in U.S. citizenship and its tax burden. Let's take a look at some of the more specific benefits:
- Fast processing time: you might imagine that applying for anything in the US would take years to process, but this is not always the case. While the popular EB5 immigrant visa for investors can take a few years to process, the E2 visa takes only a few months.
- More control over your investment: Although the E2 visa requires much more work on your part when it comes to business, it offers much more control over your investment. In comparison, for both the Canadian federal investor visa program and the EB5 US immigrant visa program, you must release your funds to be invested by a third party. Not only are you not guaranteed to see that money again, but you may be required to invest more than $$1 million to qualify. The E2 investor visa, on the other hand, generally requires a much smaller investment and you have full control of your funds; it is up to you to determine if you will get a return on your investment.
- Bring the whole family: For investors with families, the E2 visa will include their loved ones. Your spouse and any unmarried children under the age of 21 will be allowed to accompany you when you move to the United States. Your spouse can then apply for a work permit. If granted, there will be no restrictions on where your spouse can work. Your children will also be able to attend school in the United States. And if they go to a state college, they will be eligible for in-state tuition.
- Travel flexibility: One of the biggest benefits of the E2 visa over the EB5 program is travel flexibility. For investors, the need to travel internationally for pleasure or to pursue other business interests makes many investment visa programs impractical. Because the E2 is a non-immigrant visa and you will never apply for citizenship, you do not need to meet strict attendance requirements.
The cons of getting an E2 investor visa
O E2 visa is an excellent option for those who want to do business as we have seen in the pros above. But the benefits do not apply in all cases, next we will take a look at the cons of getting an investor visa:
- It is necessary to workAs mentioned, some visa programs allow you to make a passive investment or even donate to a non-profit organization in exchange for the right to live in the country of your choice. This is not the case with the E2 visa. You will need to actually work in the United States and prove that you are doing so. This means that you will have an income from the US that will be subject to tax. It also means that this may not be the right option for you if you are looking for a beach vacation.
- No path to citizenship: While it may be a benefit to some, this visa does not present a clear path to U.S. citizenship. If your intention is to eventually become an American citizen, look for other options, such as the EB5 immigrant visa. The E2 visa is best for those who travel frequently, have business interests elsewhere, and wish to avoid the cumbersome U.S. tax laws as much as possible.
- Renewal fees: Although the legal fees for the E2 visa tend to be lower than for the EB-5 visa, you should consider that you will have to renew the E2 visa every few years, depending on which E2 country you have citizenship of.
- It is not suitable for all businesses: The E2 visa is more geared towards domestic business. If you intend to undertake an import/export company, you should check the E1 treaty trader visa.
Is the E2 visa made for you?
While dealing with US immigration bureaucracy is rarely a pleasant experience, you can probably tell that the E2 visa process is generally simpler than some other options out there.
This is mainly because the E2 visa is a non-immigrant visa.
For those who dream of U.S. citizenship, this is probably not the visa option for you, but if you already have a passport and simply want to do business in the United States, the E2 visa is an excellent option.
To summarize, the process for an E2 visa works as follows:
- Hold or obtain citizenship of one of the E2 treaty countries through descent, marriage, residence and naturalization, or investment (if you do not already have it);
- Apply for an E2 visa online and pay the fee;
- Check the US Embassy website for an appointment at a nearby consulate;
- Find out what specific documents they will require for your case;
- Show up for your interview with all the necessary documents and hope they don't ask you to come back;
- Get the endorsement and pay the issuing fee;
- Wait a few weeks for your passport to be returned with the E2 visa;
- Enter the United States;
- Launch your company and live the American dream, but for no more than 120 days a year to avoid being triggered o Substantial Presence Test and bear the full brunt of U.S. income taxes
The E2 visa application is not the most rigorous or expensive, but it requires careful planning.
There may be other options that allow you to access the United States without submitting to a business investment. If your goal is tax reduction in the long run, options such as citizenship may be better.
We recommend that the entire immigration process be done in conjunction with a licensed immigration attorney experienced in the type of visa being sought. This text is intended to be informative and does not replace the need to speak with an immigration attorney to obtain all the information necessary for a smooth process with no surprises.
Are you in doubt?
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