E2 article

[peter gold]

ESSENTIAL CHECKLIST BEFORE UNDERTAKING ANY US BUSINESS PURCHASE AND TO ENSURE COMPIANCE WITH E-2 VISA COMPLIANCE
Treaty Investor (E2 Visa)
You must be coming to the United States to carry on substantial trade or to develop and direct the operations of an enterprise in which you have or are actively in the process of investing, a substantial amount of capital.
E-2 visas are nonimmigrant categories, and do not confer permanent residence in the United States though they permit the applicant and qualified family members to live in the United States for an extended period.
To qualify
1. You or your company must be a national of a treaty country which includes the United Kingdom.
2. The investment must be substantial. It must be sufficient to ensure the successful operation of the enterprise. The percentage of investment for a low-cost enterprise must be higher than the percentage of investment in a high-cost enterprise.
3. The investment must be a real operating enterprise. Speculative or idle investment does not qualify.
4. The investment must generate significantly more income than needed to provide a living for you and your dependants, and it must have a significant economic impact in the United States economy. They are looking for at least $38,000 income a year to support wife and child and two US employees.5.
5. You must have control of the funds, and the investment must be at risk. For the purpose of measuring the investment, loans secured with the assets of the investment enterprise are not counted.
Investments, however, may be prospective, provided that the funds are irrevocably committed to the investment, contingent only upon the issuance of the visa.
There is no fixed amount which is considered "substantial." A substantial amount of capital constitutes that amount which is ample to ensure the investor’s financial commitment to the successful operation of the enterprise as measured by the proportionality test.
The proportionality test compares the total amount invested in the enterprise with the cost of establishing a viable enterprise of the nature contemplated or the amount of capital needed to purchase an existing enterprise.
Such comparison constitutes the percentage of your investment in the enterprise. That percentage must compare favorably in the fashion of an inverted sliding scale starting with a high percentage of investment for a lower cost enterprise. The percentage of investment decreases at a gradual rate as the cost of the business increases .An amount of capital invested in an enterprise is merely presumed to be substantia when it meets or exceeds the percentage figures given in the following examples):
75% investment in an enterprise costing no more than $500,000 (if the cost of the enterprise is substantially lower than $500,000, 85-90%, or even 100% investment may be required).
 50% investment in an enterprise costing more than $500,000 but no more than $3,000,000.
 30% investment in any enterprise costing more than $3,000,000.
 WE SUGGEST A MINIMUM INVESTMENT OF $135,000 OF YOUR FUNDS
A marginal enterprise is an enterprise which does not have the capacity to generate significantly more than enough income to provide a living for your family and other alien employees.
You must have the intention of departing the US upon conclusion of the commercial activities. Nevertheless, holders of E-visas may reside in the US as long as they continue to meet E-visa qualifications.
Whist in E-2 status and in the United States you may seek to apply to change to an immigrant status (lawful permanent residence with green card).
Spouses and children under age 21 qualify for derivative E-visas based on the principal applicant’s qualification.
Look at the Rules as well
http://www.foia.state.gov/masterdocs/09fam/0941051N.pdf

[kirtida8]

Thanks for the info Peter - very helpful. Just a couple of questions - if you can answer them?

1-How can an E-2 holder change status to that of a LPR? I know that a spouse can get employment - and if lucky can get sponsored by their employer - but what if the holder does not have a spouse?


2-Can an E-2 company convert to EB-5 if it meets the criteria for the $1m investment? What time frame would be necessary to comply with the requirement? ie - does the company have to grow substantially within a span of say 1-3 years, or can it be over a longer period as long as it can prove that it has increased in size by over 140% and employs more than 10 USC's and is now worth over $1m? Or can you never convert?

Any light you can shed would be greatly appreciated. I realise that this would only be your opinion of the rules as not to be taken as fact.

[McSporran]

Hi Peter,

Great article...some FAM facts...and some of your companies opinions too (based on they're experience no doubt). Perhaps you could have made clearer which is which (for the un-initiated).

But a very informtive post non the less.

[Ray10]

Whist in E-2 status and in the United States you may seek to apply to change to an immigrant status (lawful permanent residence with green card).

Great advice !!!!!

[peter gold]

The only opinion is the reference to a $130,000 investment
An E2 is a non immigrant visa an so the visa holder cannot change status except by the EB5 route i.e. employing 10 workers in a business worth a million.
An E2 dependant is not a visa holder he/she is deriviative status and so can change by the PERM route.

[McSporran]

And the $38k in point 4?

Dont get me wrong Peter - I think the post is great...and I'm not even on E-2, I just wanted to clarify...you know how these things if repeated often enough seem to then be classed as "gospel".

[InnVic]

The only opinion is the reference to a $130,000 investment
.

.....two employees is an opinion also Peter :-)

[bobinalbuquerque]

EB5 route....10 workers ,1 million business value? I have seen this mentioned several times yet never in any official or knowledgable situation.Is it not more a wishful thinking route or is there a clear road map out there that I am clearly unaware of?

[JulieC]

I always thought it needed to be a different business to your existing one, ie you had to sell up and buy a new one that satisfies the criteria. Dont know if someone has found a creative way of re-organising an existing business that gets around this one??? Check it isnt only $500,000 in your area, Bob, New Mexico may be one of those where you can get it with the lower value investment.

[peter gold]

Julie
The way the rules are written a good case could be made out for using your own business with ten plus employees and value in excess of a million .
I am working with an attorney who is doing this.
The $500k investment must be in a designated area and the fact that they seek investment always concerns me why normal investors have not invested in the area.
Be very cautious with the investment. You may be buying a conditional green card for half a million..lose the $$$$ and not have the green card renewed. I would beg steal or borrow and go the million route . It does not need all the money to come from cash

[peter gold]

The minimum investment and 2 employees stated by me are based on my opinion having had contact or dealings with over 50 E2s

[JulieC]

Who values the business at the 1 million dollars if it is your own business you have built up?

As far as I know there are three ways to invest in EB5.
One may qualify for an EB-5 as follows:
1. Invest $1 million and hire ten employees anywhere in the USA
2.Invest $500,000 and hire ten employees in an area where the unemployment rate exceeds the national average unemployment rate by 150%
3.Invest in a regional center.

You are referring to no 3, Peter. I was actually thinking of no 2 when answering Bobs post, I dont know enough about Alberquerque to know if it qualifies on umemployment levels but it may be worth checking.

Re regional centres, I only know what I have been told, am not thinking of going this oute myself or not at the moment anyway, money tied up in other things at the mo actually, but close friends have done it and there are a number of people, even institutions like pension funds, actually investing in their scheme. I think you just dont hear about them.

[peter gold]

You are mixing the two up
500 k in a regional center or 1 million and ten employees.
If it is your own business you need evidence of value and would use a business appraiser.

[kirtida8]

Peter, I think I am going to have to side with Julie on this. It does say that you can invest only $500000 if it is an area where the unemployment level is 150% above the national average, and you still need to employ 10 people.

[peter gold]

The main difference is that you do not need to be in a regional center and get a full green card if you invest a million.

[JulieC]

That is true Peter but what I was saying is that a business in Alberquerque may qualify on the lower investment level, say his business only appraised at $800.000, I am aware that it wouldnt then qualify in Florida as you need to invest a million. But Bobs business isnt in Florida. I dont know enough about Alberqueque to know if it falls within the rules for lower investment but it is worth checking. No one is talking regional center here, that is a separate category.

[kirtida8]

This why I was intrigued when James said that possibly Haines City or Polk County as a whole, could be coming into this classification - ie the high unemployment compared to the national average. If this did occur then you could purchase a business in the Haines City area for $500000, employ 10 people and qualify for the EB-5. It would not be a regional center, but an area of high unemployment - and USCIS would have to designate it as such for the EB-5.

[InnVic]

EB-5 visa must create 5/10 NEW jobs. I doubt they'd consider allowing E2 visa holders to convert unless the capacity to increase employment was significant

[kirtida8]

EB-5 visa must create 5/10 NEW jobs. I doubt they'd consider allowing E2 visa holders to convert unless the capacity to increase employment was significant

I agree Julie, but consider my business as an example. I purchased a dry cleaners that was a mom and pop business. I immediately employed 2 people. To increase my business further I could easily employ another 2-3 people by starting up a route ie pickup and drop off service. Within a year I could very easily double this by opening another store thereby complying with the 10 employee rule and as a result of the extra investment, definitely the $500000 and maybe even $1m rule. If I have met all the criteria, why would I not be able to convert to EB-5?

[InnVic]

I agree Julie, but consider my business as an example. I purchased a dry cleaners that was a mom and pop business. I immediately employed 2 people. To increase my business further I could easily employ another 2-3 people by starting up a route ie pickup and drop off service. Within a year I could very easily double this by opening another store thereby complying with the 10 employee rule and as a result of the extra investment, definitely the $500000 and maybe even $1m rule. If I have met all the criteria, why would I not be able to convert to EB-5?

I don't make the rules......

[InnVic]

http://www.uscis.gov/portal/site/uscis/menuitem.5af9bb95919f35e66f614176543f6d1a/?vgnextoid=4ff96138f898d010VgnVCM10000048f3d6a1RCR D&vgnextchannel=4f719c7755cb9010VgnVCM10000045f3d6a1 RCRD

Link to USCIS website Investor visa

[bobinalbuquerque]

Firstly, Albuquerque would not be accepted at the 500k level for the economy here is much more buoyant than most other parts of the U.S. Specifically unemployment levels are inline or indeed lower than the national average.There are of course other parts of the New Mexico state where the lower level would in theory qualify.
Peter's continued input on "making progress with an attorney" on a "conversion" type situation will be eagerly awaited.
In my meeting with Congresswoman Heather Wilson we did touch on the EB5 visa which essentially is a buy your way in ticket. The Congresswoman recognised immeadiately that any long standing E2 operation will often also have made a 1m or more investment albeit over a longer time frame.Indeed you can easily present a case whereby an E2 investor is of greater benefit to the U.S. economy than an EB5 one.Consider the hands-on nature of an E2 with continued development of revenues ,investment & taxation,with increased staffing levels,combined with timescales of 5,10.15 years or whatever.The EB5 delivers the green card but also enables the individual to divest themselves from that initial investment/involvement after a fairly brief period.

[Susie]

Hi Bob,


Any news on Heather's legislation efforts, sorry if you have updated elsewhere as I may have missed any update on this by others or yourself

[Kriz1]

The 500k level is used around here...the Cape is a depressed area ...an English couple had a hotel here on a $500k plus investment...they were doing OK...had greencards...but sold up and went home...they had a nice place if a bit run down...good food...