Investor Immigration: Common Problems for E-2 Investor Visa Applicants

E-2 Investor Immigration visa - common problems

Not all business structures qualify for an E-2 visa. When you are considering investing in a US business, there are some important considerations to take into account if you want your business to meet the E-2 investor immigration rules and requirements.

What are the main issues E-2 investor visa applicants face?

Summary: Too much financing and incorrect type of financing, passive investments, and marginal investments are some of the main issues regularly encountered by E-2 investor visa applicants.

What is considered too much financing or an incorrect type of financing for an E-2 investor visa?  

Investor immigration lawyer answer: If you want to purchase a business that costs $300,000, but you only have $100,000, the seller may offer you a purchase contract with a promissory note for $200,000. Such an arrangement is a common business practice, but may be a significant obstacle to successful E-2 visa application.

The problem with such an arrangement is that the business is used as collateral for the loan. In this case, 67% of the investment amount ($200,000) is financed through a loan secured by the business and not by the investor’s personal funds. This increases the likelihood that the E-2 investor visa application will be denied by the embassy because the business does not meet the substantial investment requirement (hyperlink to E-2 requirements article).

When the business assets are used as collateral for a loan, it is generally recommended that such financing remain below 30% of the entire investment amount.

If you are concerned that the level of financing for your E-2 investor visa enterprise may not meet the E-2 investor immigration rules, or if you would like to develop your personalized investor visa USA strategy, contact our investor immigration lawyer.

What can you do if you do not have sufficient funds to outright buy the entire E-2 business?

Investor immigration lawyer answer: There are several options in such cases. For example, loans secured by the E-2 investor’s personal assets, such as personal guarantees or a personal loan on the investor’s assets, like a second mortgage, are generally considered to be the investor’s personal funds.   

This is why thorough investment planning is absolutely vital for an E-2 visa application. We highly recommend you work with an investor immigration lawyer who has experience in business law, executing effective investment plans and transactions, and in investor immigration law, preparing successful E-2 investor visa applications.

If you require financing to start your E-2 enterprise or if you want to make sure that your secured financing meets the E-2 investor immigration rules and requirements, contact our investor immigration lawyer. Our investor immigration attorney has the experience to develop your personalized investor visa USA strategy,

What is considered a passive investment for an E-2 investment visa?

Investor immigration lawyer answer: Many investors would like to purchase real estate to be rented out for a profit. Unfortunately, such an investment will most likely not qualify for an E-2 investor visa even if you purchase the properties through a company and hire an employee to perform repairs and maintenance.

The problem with such an investment for E-2 investor visa purposes is that the E-2 investor will not be actively managing and developing the business on a day-to-day basis. Any investment providing financial gains without the investor’s active day-to-day involvement in the business is considered a passive investment. Such passive investments do not qualify for an E-2 investor visa.  

The E-2 investor visa regulations require the investor’s active involvement in managing and developing the business. The company’s services are expected to be offered by employees rather than the owner.

If you would like to determine whether your proposed E-2 business qualifies as an active investment, or if you want to make sure your proposed E-2 enterprise satisfies all investor immigration rules and requirements, contact our investor immigration lawyer. Our investor immigration attorney has the experience to develop your personalized entrepreneur visa USA strategy.

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What is considered a marginal E-2 enterprise?

Investor immigration lawyer answer: An E-2 enterprise cannot be marginal. That is it cannot solely provide a living for the investor and her family.  Read more about the marginality requirement here.

Many E-2 investors are looking to buy distressed businesses which they can overhaul and develop at a significant profit. If you are planning on buying an existing business, it is very important to consider the company’s current financials.

For example, you may have found a business that employs three employees and has great growth potential, but the financial statements and tax returns show an annual income of only $25,000. The Consular Officer reviewing your E-2 application will likely consider your investment in this business to be marginal because of the low profits.

This is why it is important to work with an investor immigration lawyer who can review the proposed investment, including financial documents, to determine whether it could qualify for an E-2 investor visa. In many cases even if the initial investment strategy would not qualify for an E-2 visa, a few minor changes in the investment structure will qualify the investment for E-2 purposes.  

If you are concerned that your proposed E-2 business may be considered a marginal enterprise, or if you want to make sure your E-2 business satisfies all investor immigration rules and requirements, contact our investor immigration lawyer. Our investor immigration attorney has the experience to develop your personalized investor visa USA strategy,

What do I do if my E-2 investor visa application is denied?

Summary: Although receiving a denial on your E-2 investor visa application can be disappointing and a setback to your immediate immigration plans, it does not mean that you will not be able to obtain an E-2 investor visa in the near future.

Detailed answer from investor immigration lawyer: There are several options when you receive a negative answer from the Consular Officer:

221(g) Refusal – A refusal under section 221(g) of the Immigration and Nationality Act means that your application has been placed on administrative hold. Usually, this occurs when the Consular Officer finds that essential information is missing from your E-2 investor visa application. The Consular Officer will likely tell you or provide you with a list of documents that need to be submitted in order to obtain an E-2 investor visa. In essence, a 221(g) refusal often acts as a request for additional evidence by the consulate.

Reapply – If after you and your investor immigration lawyer review the Denial Letter, you determine that the officer has likely made a mistake, you can simply reapply. We have seen cases where, after reapplying, the same application was approved by a different Consular Officer. The Denial Letter should provide specific reasons for the denial. In many cases, it is possible to quickly make the requested changes or corrections and successfully reapply.

Appeal – If you filed your E-2 investor visa application with USCIS instead of a consulate, you may appeal USCIS’s decision to the Administrative Appeals Office (AAO). If the USCIS adjudicating officer’s decision was unfair and did not adequately consider the evidence provided, filing an appeal could be in your best interest. We highly recommend working with an experienced investor immigration lawyer to develop the best strategy for your case.

If your E-2 investor immigration application was denied and you are looking for advice on how to proceed, contact our investor immigration lawyer. Our investor immigration attorney has the knowledge and experience to develop your personalized investor visa USA strategy, including addressing denials of prior investor immigration applications.

Our Investor Immigration Lawyer Is Here to Help You

This article highlights some general problems that are regularly encountered in the E-2 visa application process. We recommend that you consult with an experienced investor immigration attorney who can help you develop the best E-2 investment strategy for your particular needs.

Would you like your own customized investor immigration strategy? Are you an entrepreneur looking for the most suitable entrepreneur visa USA option? Do you need assistance planning and filing your E-2 investor visa application? Our investor immigration lawyer can devise a custom tailored E-2 investor visa USA strategy and prepare your E-2 investor visa application in compliance with all relevant investor immigration rules. As an experienced investor immigration law firm, Pandev Law has the knowledge and experience to guide you through investor immigration journey.

Please complete our contact form, email admin@pandevlaw.com, or call us at 212-220-6652 to schedule a consultation with our investor immigration lawyer.

During your consultation, our investor immigration lawyer will provide an honest assessment of your case, and a recommendation about your next steps.  

Disclaimer: Although this article discusses general legal issues, it does not constitute legal advice. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Pandev Law, LLC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.