Introduction: Best Businesses for E2 Visa
The E2 visa enables foreign investors from treaty countries to live and work in the United States by investing in an E2-qualifying business. It is a renewable non-immigrant visa that allows business owners and employees to be directly involved in the business venture. While there’s no definitive answer as to which is the “best business for an E2 visa,” it is certain that E2 visa business opportunities consistently stand out for entrepreneurs seeking profitability and scalability.
Before diving into the E2 investment opportunities, it is important for investors to understand the key requirements in applying for an E2 visa to ensure that the criteria align with the investor’s chosen business.
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The E2 Visa and Its Key Requirements
The E2 visa is an investment-based visa available to foreign investors who hold the nationality of a country with which the United States has a treaty of commerce and navigation. Once obtained, the visa can also be used to apply for visas for foreign employees of the primary E2 business. The U.S. Department of State maintains a current list of countries with which the United States keeps such treaties.
As mentioned, the E2 visa is based on an investment in a U.S. enterprise. Naturally, many foreign investors wonder about the specific E2 visa business opportunities and E2 visa investment opportunities. While it is difficult to specify which is the best business for E2 visa, there are certainly some favorable E2 visa business ideas that many foreign investors have chosen in the past.
Prior to the evaluation of the E2 visa business ideas, let’s take a look at the general requirements of the E2 visa, as the best business for an E2 visa is often a business that helps an investor easily meet these requirements:
- Real and Operating Business
The business must actively produce goods/services or introduce a commodity and not just exist on paper. It should be a legitimate, operational enterprise with a proven or operational track record. Dormant businesses, most commonly known as passive investments, do not qualify for an E2 visa. - Non-Marginal Enterprise
It should generate enough income to exceed the investor’s living expenses and contribute to the U.S. economy by creating jobs for U.S. citizens. - Treaty and Nationality Compliance
- The E2 visa requires that the individual or business possesses the nationality of the qualifying treaty country.
- At least 50% of the business is owned by nationals of the treaty country.
- Substantial Investment
- While no set minimum amount is required, the investment must be proven “substantial”. Hence, a proportionality test is conducted to compare the invested amount to the total cost of the business to become operational.
- Funds must also be “at risk” and committed, with proper documentation that they are legally acquired.
The specific cost of a business depends heavily on its nature and industry. Manufacturing businesses, like automobile manufacturers, often require millions of dollars to establish or acquire due to the machinery needed for the daily operation of the business. In contrast, service-based companies like consulting firms may have lower initial costs. This is an important consideration when evaluating the best business for an E2 visa.
- Active Involvement
The investor must be actively involved in the business’s operations or demonstrate direct authority over the business. The same goes for foreign employees with specialized skills who will apply for an E2 visa to work in a specialty capacity or to supervise the enterprise from inside the United States. - Intent to Depart
The investor must intend to depart the United States once their E2 status ends.
Investors are reminded that U.S. consulates around the world often impose different requirements regarding the exact documentation required to apply for an E2 visa. Thus, foreign inventors considering an investment in the United States for an E2 visa should familiarize themselves with the specific E2 requirements.
What is the Proportionality Test?
The proportionality test for the E2 visa assesses the relationship between the amount of capital invested in a U.S. business and the total cost of establishing or purchasing that business. The investment must be proportional to the overall value of the business and sufficient to ensure its successful operation.
Generally, smaller businesses require a higher percentage of investment to meet the substantiality requirement, while larger businesses can often satisfy the test with a lower percentage of investment. The test ensures that the investor has a significant financial stake, demonstrating their commitment to the success of the enterprise.
Factors to Consider When Choosing an E2 Business
Many aspiring E2 investors might get overwhelmed by tremendous businesses out there. To increase the success rate of the E2 visa application, E2 investors should go beyond simply considering the type of business industry. E2 visa investment opportunities have several key factors that can significantly impact the long-term growth and success of the business.
Investor’s Skills and Interests
Selecting the best business for an E2 visa is all about finding a business that aligns with your skills and interests. Having experience in the industry or a good understanding of the business you intend to invest in will put you in a much better position to handle challenges and identify opportunities. Moreover, being passionate about your chosen business will become more rewarding and fulfilling.
For example, an investor with a background in marketing or technology might find it easier to run an online business or a tech start-up, as they would have the expertise to understand market trends, customer needs, and the technological infrastructure required. Additionally, when investors are passionate about the business they’re involved in, they are outstandingly committed and motivated, resulting in the overall success of the business. A mismatch between the investor’s skills and their chosen business could lead to mismanagement, poor decision-making, and failure. Keep in mind that a successful business with solid revenue and growth makes E2 visa renewals much easier.
Location
The location of the E2 visa business idea is another key factor in its success. The type of business should ideally match the demographic and economic characteristics of the target location. For instance, certain businesses, like restaurants or retail shops, generally perform better in densely populated areas with high foot traffic, as they rely on a constant influx of potential customers.
On the other hand, businesses that rely on local services or have specific regional demands may fare better in suburban or rural areas. Alternatively, companies that operate online or offer digital products face fewer geographic constraints since they can reach customers globally through mail or package delivery. The location also affects the operational costs, such as rent and utilities, which can impact the overall profitability of the business. A thorough understanding of the market demand and consumer preferences in the chosen location is vital for the business’s success.
Also, we often see that E2 applicants have particular states or cities in the U.S. to which they want to move. In these cases, it is important to consider whether the proposed business endeavor is well-suited for the area. Other E2 investors are set on a particular geographic area. In this case, it may make sense to choose the location of the business based on which area would be best suited for the type of business. It is important to note that U.S. states vary substantially when it comes to local rules, including income and property taxes as well as licensing requirements. Attorneys, like our team, can help in analyzing these tax and liability factors. You can check out our recommendations for choosing the best location for your business here.
Employment Potential
Another significant factor that can impact the success of an E2 visa business idea is its potential to create jobs which is also a compliance to E2 visa. Hiring employees and establishing a workforce not only demonstrates that the business is “non-marginal” (the ability of the business to generate revenue that is sufficient beyond the investor’s personal living expenses) but also strengthens the business’s chances of success.
Having staff members also means that the business can scale operations, manage day-to-day activities more effectively, and improve customer service delivery. Moreover, creating jobs positively impacts the local economy and boosts the business’s reputation within the community. As the business grows, the potential for more job creation increases, which can further contribute to the long-term sustainability and growth of the enterprise. It also demonstrates to the U.S. government that the business contributes to the local economy, which is a helpful factor in E2 visa approval.
Investor’s skills and interests, location, and employment potential are all critical factors that can shape the success of an E2 visa business. A business that aligns with the investor’s expertise and goals has a better chance of thriving. Choosing a suitable location and hiring employees can further increase the likelihood of scalability and growth. These elements work together to create a strong foundation in choosing the best business for an E2 visa and enhance its chances of meeting the E2 visa requirements.
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Schedule a consultationPopular E2 Visa Business Opportunities
The E2 visa presents an advantageous opportunity for foreign investors looking to establish or purchase a business in the United States. However, selecting the right type of business is crucial for success. While there is no definitive answer as to which is the best business for E2 visa, certain industries have proven to be more viable and successful for investors. Below are some popular E2 visa business opportunities that align with E2 visa requirements.
Please do not take the below E2 visa business ideas to mean that you have to start one of the below businesses to qualify for an E2 visa or that these are necessarily the best in your particular case. You should carefully evaluate any business before committing any capital. In this article, we are strictly looking at the E2 requirements and which business types can meet them. This is not investment advice. We just want to highlight some business types that we have seen succeed with E2 visa applications. This, however, is not an exclusive list. We have seen many different business ideas lead to successful E2 visa applications.
Franchises
One of the most popular E2 visa business opportunities is investing in a franchise. It is popular among previous investors because it comes with several advantages. Franchises offer a proven business model that helps draft a well-structured E2 business plan, making it easier to project costs and revenues. It also comes with an established brand reputation and wide customer base. This significantly reduces the risks associated with starting a business from scratch. Fast-food chains, retail stores, and service-based franchises are excellent choices as they typically meet E2 visa requirements. Additionally, franchises often provide training, marketing support, and operational guidance, making it easier for investors to manage their businesses successfully. The investment required varies depending on the franchise, but many fall within the moderate range, making them an attractive option for starting foreign entrepreneurs. Franchises come in many different forms, including popular options such as:
- Hospitality and Restaurants – Hotels, cafes, and restaurants thrive in high-traffic areas. These businesses often meet the “non-marginal” requirement due to their job creation potential.
- Retail – Clothing stores and specialty shops appeal to investors seeking to launch a small to mid-size business with a reasonable investment amount that meets the E2 criteria. This type of business also meets the “active involvement” criteria of the E2 visa, as it requires hands-on management for inventory, marketing and customer service.
- E-Commerce – Online shopping websites have gained immense popularity due to their fast scalability and lower overhead costs. Online businesses allow investors to operate with minimal expenses, eliminating the need for physical office space. Dropshipping, subscription services, and branded merchandise stores are all viable e-commerce models that can qualify under the E2 visa.
Service-based Businesses
Service-based businesses can be another attractive E2 visa investment opportunity for E2 investors, as they cater to essential needs and have relatively low startup costs. Some examples of service-based businesses include consulting firms, cleaning services, landscaping companies, and fitness centers. These businesses are often demand-driven and require straightforward operations, making them easier to manage and scale. Additionally, these businesses also have the capacity to create employment opportunities, fulfilling the E2 visa requirement that the business should contribute to the U.S. economy. Investors should leverage their expertise and skills to choose a service-based business that aligns with their background and interests.
- Consulting Firms
Starting a consulting firm can be a thriving E2 visa business opportunity for professionals with specialized knowledge and expertise. Consulting businesses require minimal initial investment, as they primarily involve providing expert advice and solutions to clients. Common consulting niches include business strategy, IT solutions, marketing, financial advisory, and human resources. This type of business offers flexibility and can be operated remotely or from a small office, further reducing costs. Consulting firms that establish a steady client base and generate significant revenue can easily meet E2 visa requirements.
Best Business to Buy for E2 Visa
Buying an E2 Business For Sale
Some investors think they must build a business from scratch to start their E2 visa investment opportunities. However, one of the popular E2 visa business ideas is purchasing an already existing business.
Purchasing an already established business can offer key advantages to investors, such as proven financials that can potentially meet the non-marginal criteria. It can also offer simplified compliance by having an already established operation meeting “real and operating enterprise” requirements. Buying an existing business for E2 visa investment opportunities can streamline the E2 visa application process. Additionally, purchasing an existing business eliminates the challenges of building brand recognition from scratch.
However, buying an existing business also has its risks. Before making an investment, Investors should conduct thorough due diligence to ensure that the business they are acquiring is profitable, sustainable, and compliant with E2 visa regulations. You can check out our video discussing the key steps in buying an E2 business for sale. This option is particularly beneficial for investors who are looking to fast-track their E2 visa application and business operations.
Where Can I Find the Best Business to Buy for E2 Visa?
Finding the right business to buy for an E2 visa investment is a crucial step in securing a successful business venture in the United States. The E2 visa requires applicants to invest in a non-marginal business which should generate sufficient revenue and employment opportunities. To maximize the chances of approval and long-term success, investors should conduct thorough research and explore various resources to identify the best E2 visa investment opportunities. Below are some of the most effective ways to find the ideal business for an E2 visa investment. As always, it is critical that the investor perform necessary due diligence before committing to any particular investment or before deciding to work with any advisor.
Business Brokers
One efficient way to distinguish the best business for an E2 visa is through professional business brokers. These experts specialize in connecting buyers with businesses for sale, ensuring that the investment meets the necessary legal and financial criteria. Business brokers provide valuable insights, assist with negotiations, and help streamline the acquisition process. They also have access to a wide range of listings, including franchises, retail stores, and service-based businesses that qualify under the E2 visa program.
Online Business Marketplaces
Numerous online platforms exist nowadays where investors can find E2 visa investment opportunities. These websites feature extensive listings across various industries. These platforms allow investors to filter search results based on location, industry type, and price range, making it easier to identify businesses that meet E2 visa requirements. Additionally, many of these websites provide detailed financial information and seller contact details to facilitate transparency and due diligence.
Franchise Opportunities
Franchises are one of the top options for E2 visa investment opportunities, as they offer a proven business model and established brand recognition. Franchise opportunities can be found through franchise directories. These online platforms provide detailed information on available franchises, investment requirements, and ongoing support provided by the franchisor. Since franchises often come with training programs and operational guidelines, they are an attractive option for investors who may not have prior business experience in the United States.
Industry Associations and Chambers of Commerce
Local industry associations and chambers of commerce can be excellent resources for finding businesses that are for sale. These organizations often have insider knowledge of business owners looking to sell their businesses and can provide networking opportunities with potential sellers. Additionally, they can offer guidance on local business regulations, market trends, and legal requirements related to E2 visa investments.
Networking and Word of Mouth
Sometimes, the best E2 visa business opportunities come from personal connections and networking. Attending business events, industry conferences, and local meetups with other investors can provide valuable leads on businesses that are available for purchase. Engaging with other entrepreneurs and professionals in the field may uncover hidden opportunities that are not publicly listed. Leveraging personal and professional networks can give investors an edge in finding a well-suited business for their E2 visa application.
Potential Downsides of Buying an Existing E2 Visa Business Opportunity
While purchasing an E2 visa business opportunity offers several advantages, it also comes with potential disadvantages. An existing business may carry liabilities or be bound by unfavorable contracts from prior agreements, which the new owner would need to manage or resolve. While our firm routinely mitigates these risks through legal strategies, such as purchasing the asset rather than the company itself, there is an increased liability risk in these transactions. Additionally, the available businesses in the market might not fully align with the investor’s vision or business aspirations, limiting their ability to fully engage in the business and innovate. In the case of franchises, contractual obligations are often tied to the business. These obligations must be met to maintain franchise status, such as adhering to specific operational standards or paying ongoing franchise fees. These commitments can reduce the flexibility an investor has in running the business, which may be a significant consideration for investors seeking more independence.
Can I Open an LLC on an E2 Visa?
An LLC is a Limited Liability Company that is often the entity type chosen for an E2 investment. When considering the best businesses for an E2 visa, you should also consider the right entity structure for the business. The LLC is often chosen because of its flexible business structure in the United States. It combines the benefits of a corporation (limited liability protection) with the simplicity of a partnership or sole proprietorship. It is a popular E2 visa business opportunity for entrepreneurs and small business owners because it offers liability protection while being relatively easy to form and manage.
To answer the question above, yes, you can form and operate a Limited Liability Company (LLC) on an E2 visa, provided the business meets the visa’s requirements. An LLC is also a popular choice for E2 visa applicants due to its flexibility, limited liability protection, and favorable tax treatment. To qualify, at least 50% of the LLC must be owned and operated by nationals from a treaty country. The visa holder must also play an active role in managing the LLC, as passive investment is not permitted.
The formation process of an LLC involves filing Articles of Organization with the state, preparing an Operating Agreement, and maintaining detailed records to support the E2 visa application. LLCs can function as pass-through entities for tax purposes, meaning that profits and losses are reported on the owner’s personal tax returns. The LLC structure is flexible and can be used for various businesses, including service-based ventures, retail stores, franchises, and online businesses. Overall, an LLC offers several benefits for E2 visa holders, including liability protection, management flexibility, and ease of setup. Based on my experience helping E2 investors form these structures for their U.S. investments, it’s critical that a strategy considering liability, tax, and immigration plans is created from the start so that the right entity can be chosen and the E2 investment can be structured in the most advantageous way for the E2 visa applicant.
How Much Should I Invest In For E2 Visa?
When considering the best business for an E2 visa, new investors are surprised that there is no legally defined minimum investment for the E2 visa. However, the investment must be substantial and sufficient to ensure the successful operation of the enterprise. For the investment to be “substantial”, it needs to meet several criteria:
- Proportionality: The investment will be considered as substantial when it is proportional to the total cost of the business to become operational. In this regard, the proportionality test is applied. This test compares the amount of money invested to the total cost of the business. If the investor has contributed 100% of the required funds, then the investment is clearly substantial. However, a lower percentage than 100% will suffice in most cases. The proportionality test functions as an inverted sliding scale: for lower-cost businesses, a higher percentage of investment is necessary, while more expensive businesses may require a lower percentage of investment.
- Marginality: To be considered substantial, the business should be non-marginal. This means that the business should generate enough revenue to employ at least a few U.S. employees and provide the investor and his family a comfortable life in the United States which is expected within 5 years of the date of E2 visa issuance.
- Financial Commitment: The investment must be considered “At risk” to demonstrate the treaty investor’s financial commitment to the successful operation of the enterprise. This means that the
- Likelihood of Success: The investment amount must indicate that it is significant enough to support the business’s successful operation.
While the U.S. government does not specifically require a fixed amount to be invested, it is safe to assume that it will depend on the scale and type of industry the E2 investor seeks to invest in.
How Much Are E2 Expenses?
Aside from the investment amount needed to fund the best business for E2 visa, investors should also take into consideration the application fee for E2 visa and other additional costs it entails. When applying for an E2 visa, applicants should be prepared for the following basic expenses:
- MRV Fee: After completing the DS-160 online application, a fee of $315 is required. In addition to this, depending on your country of citizenship, there may be additional DOS reciprocity fees that you must pay.
- USCIS Filing Fees: If the investor is applying from within the United States, the filing fees are $1,315. Investors who are opting for premium processing incur an additional $2,805. For premium processing, USCIS will issue a response within 15 business days.
Beyond the primary investment and application fees, the investor must also consider professional fees for business and immigration attorneys and travel expenses associated with traveling to the U.S. embassy or consulate for interviews, including transportation and accommodation, business formation fees, and business plan fees. Initial costs for establishing the business, such as office supplies, equipment, inventory, permits, and licenses, should also be considered.
Can E2 Visa Lead to a Green Card?
The E2 visa is a non-immigrant type of visa that allows investors from treaty countries to explore E2 investment opportunities and operate a business in the United States. While it does not directly lead to a green card, E2 visa holders can explore alternative pathways to permanent residency. One common route is transitioning to an EB-5 green card, which requires a larger investment and job creation criteria to be met. Other options are EB-2 NIW (National Interest Waiver) and EB-1A green cards, which may be available if the E2 business is a significant success. The EB-1C green card can also be an option if the E2 investor worked in a managerial role at a foreign affiliate company in the last 3 years prior to filing for permanent residence.
Alternatively, employer sponsorship through an EB-2 (available to those with advanced degrees or exceptional abilities) or EB-3 (unskilled/skilled workers) employment-based green card if they qualify. Furthermore, some E2 visa holders may seek family-based sponsorship. Though the E2 visa alone does not grant a direct path to a green card, strategic planning can help investors and entrepreneurs achieve permanent residency over time.
Conclusion
The best business for an E2 visa depends on an investor’s goals and expertise. Franchises and service-based businesses are popular for their ease of setup, while purchasing an existing business also offers the advantage of an established track record and established customer base. Investors should perform careful due diligence and assess industry trends, profitability, and scalability when choosing the best business for an E2 visa. However, success in the E2 visa process goes beyond business selection, it also requires strict compliance with all eligibility requirements as well as a proper corporate structure for your investment.
Given the various liability, tax, and immigration considerations, working with an experienced business and immigration attorney can simplify the process. Ultimately, securing an E2 visa requires a strategic approach and careful planning. By making informed decisions and leveraging available resources, investors can increase their chances of approval and build a thriving business in the United States.
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Our team has extensive experience helping E2 investors launch and scale their U.S. businesses. From creating the right company structure to ensuring proper liability protection and, finally, the E-2 visa application, we help guide our clients through the entire E2 visa process. In fact, many of our clients continue to work with us on corporate and tax matters after they obtain the E2 visa so that they can continue to scale their E2 enterprise while complying with all relevant rules, which ensures seamless future E2 visa renewals. If you would like to schedule a consultation with our immigration lawyer, follow the link and click on “Schedule a Consultation.” You can also reach us via email at [email protected], or call us at (646) 354-3780.
During your consultation, our E2 visa attorney will review your goals and provide an honest assessment as well as customized plan for your case, and guidance regarding your next steps.
Disclaimer: This blog article is provided by Pandev Law, LLC for general educational and informational purposes only. Although this article discusses general legal issues, it does not constitute legal advice nor does it establish an attorney-client relationship. No reader should act or refrain from acting on the basis of any information presented in this article, or elsewhere on this website, without seeking the advice of appropriate legal counsel, or other professional counsel, licensed in the relevant jurisdiction. Pandev Law, LLC expressly disclaims any and all liability with respect to any actions taken, or not taken, based on any content of this article or website. This blog article may constitute attorney advertising. Prior results do not guarantee a similar outcome.
