How much do I have to invest for an E2 visa?

Probably less than you think.

As discussed in detail in the prior post, the E2 visa is a great option for founders from certain countries who have invested their own money into the initial operations of the company. After establishing that they might qualify, the next question is always "how much do I have to invest?"

There is a common misconception among potential E2 applicants that $100,000 is the minimum. This is a myth, completely unfounded in law. Unlike the EB5 Investor Green Card, which requires a specific investment amount, there is no set amount of investment that needs to be made for an E2 visa. Really.

Instead, the amount of investment required is defined relative to what it costs to start the particular type of business you are founding. Some businesses require a lot of capital to get started, others very little. To quote directly from the US Department of State Foreign Affairs Manual (the guidebook that the officer deciding your E2 case will refer to):

Any manufacturing business, such as an automobile manufacturer, might easily cost many millions of dollars to either purchase or establish and operate. At the extreme opposite pole, the cost to...establish a service business, such as a consulting firm, may be relatively low. As long as all the other requirements for E-2 status are met, the cost of the business per se is not independently relevant or determinative of qualification for E-2 status. (9 FAM 41.51 N10.3)

If your business requires little more than you, your living room couch, and a laptop you bought 5 years ago, however, don't get too excited yet! While it is true that what is "substantial" investment depends on the particular company, the investment must also be "sufficient to ensure the treaty investor's financial commitment to the successful operation of the enterprise." Basically, if you have invested nothing but your used laptop, in the US government's eyes you have very little to lose if the company fails, and therefore little incentive to try your hardest to make it a success.

E2 clients who are concerned about their ability to qualify based on the fact that their company simply does not require early-stage investment are often surprised at the amount of investment they come up with when they sit down and start adding costs up. Normally to incorporate or form an LLC you need to hire a business attorney, and pay state registration fees and associated expenses like publishing a notice in the newspaper. The company will probably need to buy a new computer or two, and a printer or other office equipment. You may need to hire a professional business plan writer to help you map out your growth plan. Maybe you need to hire someone to design your website or make a few promotional videos to get you started. These expenses quickly add up to a significant number which, along with a modest cash investment into the operating account, can make an E2 case.

Another consideration frequently more important than the amount of investment is the percentage of investment that came from the E2 applicant. The Department of State uses a sliding scale to determine what percentage of the total investment must have come from the E2 applicant in order to be considered substantial.

Generally, the lower the dollar amount of the investment, the higher the percentage of total investment made in the company should come from the E2 investor. For example, for a company that requires $500,000 to get started, it might be acceptable to have only 50% ($250,000), come from the E2 investor. For a company that requires $50,000 to get started, however, 100% ($50,000) should come from the E2 investor. 

If you are considering an E2 visa and have partners who will also be investing, it is important to plan the investments so that your partners will not water down your own E2-qualifying investment.

This post provides general information on a very tricky topic, and the solution for each case depends entirely on the particular facts. Before you make a plan for investing in your company for E2 purposes, it is important to talk to an attorney about the details of your particular case.