How to obtain E-2 treaty investor status

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    How to obtain E-2 treaty investor status

    Specific Requirements for E-2 Treaty Investor Status:

    Treaty Country

    * The investor, either a real or corporate person, must be a national of a treaty country.

    Definition of Investment

    * Investment means the treaty investor’s placing of capital, including funds and other assets, at risk in the commercial sense with the objective of generating a profit. The investment may be in either a new or existing enterprise in the United States.

    Possession and Control of the Invested Funds

    * The treaty investor must be in possession of and have control over the capital invested or being invested. The capital must not have been gained, directly or indirectly, through criminal activity. Income from other business operations, gifts, loans, contest winnings or inheritances may qualify, provided that the investor has lawful possession and control of the funds.

    Bona Fide Enterprise

    * The enterprise must be a real and active commercial or entrepreneurial undertaking, producing some service or commodity for profit and must meet applicable legal requirements for doing business in the particular jurisdiction in the United States. Speculative or passive investments will not qualify, nor will non-profit enterprises.

    Irrevocable Commitment of Funds

    * Future intentions to invest are not sufficient. The investor must have already invested or be actively in the process of investing the funds. Capital that is “in the process of being invested” must be irrevocably committed to the enterprise. It is permissible to use an escrow arrangement if the funds are committed to the project and the only pre-condition to release of the escrow funds is the issuance of the E-2 visa.

    Investment at Risk

    * The capital must be at risk in the commercial sense with the objective of generating a profit. It must be subject to partial or total loss if the enterprise’s business fortunes decline. The investment capital must be the investor’s unsecured personal business capital or capital secured by personal assets. Loans secured by personal assets such as a second mortgage on a home or unsecured loans are considered “at risk.” Loans secured by the assets of the treaty enterprise (for example, purchase money mortgages) are not considered to be at risk.

    Investment Is Substantial

    * The law is silent regarding the precise amount of the required investment. The decision of what is a “substantial amount” is ultimately made by the U.S. consular officer or immigration adjudicator who reviews the application or petition. The Foreign Affairs Manual states that the requirement of substantiality is met by satisfying the “proportionality test,” which it defines as a comparison between two figures:

    * The amount of qualifying funds invested in the treaty business; and

    * The cost of the business (for example, its purchase price) or, if a newly created business, the cost of establishing such a business.

    * The proportionality test is similar to an inverted sliding scale. Thus, investors in small enterprises that require relatively low amounts of start-up capital should expect to invest all or nearly all of the required capital in advance of filing the E-2 visa application.

    * The FAM states that, 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. In

    Investment Must Not Be Marginal

    * The E-2 treaty investor must demonstrate that the treaty enterprise has the present or future capacity to generate sufficient income to provide more than a minimal living for the investor and his/her family, i.e., it must be more than a “marginal” investment.

    To conclude, nationals of the treaty country must own, directly or indirectly, at least 50% of the treaty enterprise.