The E-2 visa, or treaty investor visa, enables foreign nationals to invest in a U.S. business and obtain temporary residency to develop and direct that business. A key element of the E-2 visa application process is demonstrating a "substantial" investment in the enterprise. Unlike other visa categories, the E-2 visa does not specify a minimum dollar amount for the investment. Instead, the concept of substantiality is assessed through a proportionality test.

The Proportionality Test

The proportionality test compares the amount of capital invested by the applicant to the total cost of purchasing or establishing the enterprise. This test considers the nature and scale of the business. For smaller enterprises, a higher percentage of investment relative to the total cost is expected. For example:

• Small Retail Store: An investment of $75,000 in a retail store costing $75,000 would likely qualify, as it represents 100% of the business cost. This shows full commitment to the enterprise's success.

• Mid-Sized Restaurant: A $250,000 investment in a restaurant costing $350,000 may qualify due to the significant proportion of the total cost (approximately 71%). This demonstrates a substantial financial commitment relative to the business size.

• Large Manufacturing Firm: A $5 million investment in a manufacturing company costing $50 million would likely qualify because of the significant absolute dollar amount, even though it represents only 10% of the total cost. The large investment indicates a strong commitment to the enterprise.

The Department of State emphasizes that the proportionality test is not a mere arithmetic calculation but a nuanced assessment of the investment's sufficiency and the investor's commitment to the business.

Factors Considered in Assessing Investment Amount

When determining whether an investment is substantial, several key factors are considered:

1. Successful Operation: The investment must be sufficient to ensure that the enterprise can operate successfully. This implies that the business should be viable and capable of generating enough income to sustain itself and potentially create jobs for U.S. workers.

2. Development and Direction: The amount invested should reflect the investor's ability to develop and direct the enterprise effectively. This means the investor must demonstrate a clear role in managing the business and making strategic decisions.

Documentation to Demonstrate Investment

Applicants must provide thorough documentation to prove the amount and source of their investment. Acceptable documentation includes:

• Bank Statements and Transfers: Detailed records showing the transfer of funds into the U.S. and their use in the business.

• Contracts for Equipment and Inventory: Agreements and receipts for purchasing business assets, such as machinery, inventory, and equipment.

• Appraisals: Professional appraisals of real estate, equipment, and other tangible assets used in the business.

• Accounting Audits: Audited financial statements providing an accurate picture of the business's financial status.

• Government Records: Documents filed with governmental authorities, such as tax returns and business licenses.

Additional Evidence

For smaller businesses or startups, additional evidence may be necessary to establish the investment's reasonableness and sufficiency. This could include:

• Letters from Chambers of Commerce: Endorsements or testimonials from local business associations.

• Trade Association Statistics: Industry data showing typical investment amounts for similar businesses.

• Business Plans: Detailed plans outlining the business strategy, financial projections, and operational plans.

Scrutiny and Verification

The Department of State and USCIS scrutinize E-2 visa applications, especially for smaller investments. They may request additional documentation or clarification to ensure that the investment is substantial and that the business is viable. Applicants should be prepared to provide detailed and verifiable evidence to support their claims.

Conclusion

The E-2 visa offers a flexible pathway for foreign investors to live and work in the United States. Understanding the substantial investment requirement and preparing comprehensive documentation is crucial for a successful application. By demonstrating a significant commitment to their U.S. enterprise, investors can leverage the E-2 visa to achieve their business goals and contribute to the American economy. For personalized advice and assistance, consulting with an experienced immigration attorney is highly recommended.