E2 Visa Investment Amount: How Much Do You Need?

hey everyone welcome back to my channel this is Adrien pandev business and immigration attorney and today we're going to continue talking about the E2 Visa specifically in this video we're going to talk about the E2 investment amount and this is without a doubt the number one question I get asked by all prospective clients clients and everyone interested in an E2 visa and the question goes how much money do I have to invest in order to obtain an E2 Visa um now in order to answer the question let's start with the rule right what does the

rule say the rule says you have to make a substantial investment in a US Enterprise now the word substantial is not defined with a specific dollar amount so in sharp contrast to the eb5 investor green card program where you get a specific number in the E2 context for when you're applying for an E2 Visa the government does not give you a specific number it says you have to make a substantial investment so you know what what number is sufficiently large enough to be considered substantial and frankly put that's going to depend on the specific business

that you're trying to start and develop in the US now before we dive into the specifics let's um talk a little bit higher level about what the government's trying to achieve here right so think of it very simply right the E2 Visa um helps the US economy right because it brings in foreign Capital it launches a business that business is going to pay taxes on income right any property taxes on properties Etc and that business will employ us employees right which will further help the US economy and will further you know result in taxes Etc

so it's it's a boost to the US economy right and this is important to keep in mind because there's a few Concepts here that are that are that come back to this right and the first one is what's called marginality if you're reading about the E2 investment amount you probably have come across this this word marginality marginality simply put means that the business the E2 business that you're investing in right has to be one that's capable and will likely create jobs for others than the investor and the Investor's family so the best way to think

about this is right the government doesn't want you to just put a bunch of money into a business where you're G to make you know a a lot of money but you're not going to create jobs for us workers but that's not a huge benefit to the United States that is why those types of businesses are this favored right so let's talk about the actual investment amount just keep the previous sort of in in mind as you're thinking through this right um there's two separate concept Concepts right and when we're talking about the Investments one

is capitalization right and the the the way you should think about capitalization is you've opened a US company right you've you're going to wire in or you know you're going to fund that company with a certain amount of capital cash right and that is cap what I'm going to refer to in this video as capitalization right now that money that just sits on a bank account right the money you've just wired in to fund the company is not going to count in totality right the total number towards the E2 investment why because simply put that

money is not put at risk it shows no commitment from the E2 investor and what the government wants to see is that you're serious about this plan right that you're serious about scaling this business to where it's going to employ people it's going to have revenues you're going to pay taxes Etc so the number that the government is specifically looking at is how much of that initial capitalization have you actually committed irrevocably committed to this business right how how much of it have you put at risk right so to think about this very simply what

is considered committed well any business expenses that you needed right necessary business expenses that you paid for right on behalf of the company are committed Capital so simply to think about this simply right so for example you may have you know inventory that you need you may needs you know lease a warehouse lease an office lease other premises you may need to hire accountants lawyers right to to get the business um off the ground right all of these expenses depending on the type of business um you're in will count is committed Capital because you you

cannot you know get that money back you've already spent it on behalf of the business the more Capital you commit right the stronger the case becomes however it's not just that simple because otherwise it would be how do I put this unfair right because if someone's going to be starting a manufacturing business and they're leasing Factory space and you know building out all this crazy expensive stuff um if we're going to hold everyone to that standard well then a lot of other businesses that have way lower Capital requirements will not qualify and this is why

the government doesn't give a specific number the government says it has to be substantial in proportion to the type of business right so the best way to think about this right is that um the the bigger the amount that's needed right to get the business off the ground and um operational the less of that total amount you have to upfront invest before applying for the E2 Visa right so say am I hypothetical with the manufacturing facility right it's probably going to take many years of many millions of dollars to get that business totally off the

ground and operational so the government allows after you've committed a smaller portion of that total big number for you to go and apply for the Visa because they understand that this is going to be a substantial investment over many many years so they're allowing you to apply earlier on the flip side um many businesses and frankly most E2 businesses that that I see dayto day right they don't require a huge enormous um Capital commitment in that case what the government wants to see is that you've actually committed a significant percentage of that total business cost

right that's required for it to be operational right so let's think about this I want to offer you some examples and kind of explain how this all um plays out in in practice right so the vast majority of businesses right um that I see right whether they be um e-commerce businesses Professional Services companies software as a service or other you know technology startups a lot of franchises right they don't generally require many millions of dollars to be operational in fact many of them don't even require you know much more than you know 20 3040 $50,000

right depending on the business now the best way to think about this if this is where where your business Falls now keep in mind if your business requires you know significantly larger amounts of capital than this well then that's that probably means that the the chances of it being deemed substantial are good right I'm trying to focus more on the lower investment amounts because that is where I see um that you know clients and prospective clients are are more worried so the way I look at this is I draw I put it on like a

sliding scale right and I draw several lines and the first line I draw is at $100,000 in my experience for the vast majority of businesses right if you show that you've made an um an initial you know investment call it the initial capitalization of $100,000 or more right $1 15 2 200 and of that amount of money you've actually committed 60 you know 50 60 70% depending on say 50 to 70% generally speaking for most businesses that will be considered substantial right so basically over $100,000 capitalization and about 60 um that's just called 65% of

that committed now again it's going to depend on the specific business so don't hold me to any of these numbers I'm just trying to give you more concrete numbers um because a lot of the people I speak with are frustrated right that they can't get concrete numbers online and and when they talk to to advisor so basically just to repeat this right $100,000 or more um initial capitalization 65% committed generally speaking um I see in most cases is is viewed as a serious investment by by the um government then I draw a second line at

50,000 so now we're talking 50,000 to 100,000 right um of initial capitalization um in these cases right um what I find is that a lot of my cases for Professional Services a lot of e-commerce they sort of fall into this range simply put because if you're starting a Consulting business or or an advisory business or something similar the business really doesn't need a whole lot of initial expenses right it may need um a physical office space it may need um you know some techn ology some software phones Etc but not much more than that so

what I see is a lot of businesses fall into this range um in this range I say the same I think you have to about commit about 65 70% or at least 50% of that initial investment amount for it to be viewed as substantial right now again there's always wiggle room there's no specific numbers but that's a good way to think about it now as you fall below $50,000 right 50,000 to Z with each and every dollar that gets closer to zero you're taking on more and more and more risk right and the closer you

get to zero the more I think it's becomes more and more critical that you actually commit the whole amount or 90% of it or 80% of it right but a huge percentage of that amount simply put because otherwise your committed investment will be too little now why is it hard to put numbers on this because I want I want to share with you some examples on the lower end right the lowest E2 investment I've ever done was $7,000 um and obviously it needed a really good business plan but we were able to explain the business

really just did not need a whole lot of capital investment it was the knowhow of the investor and the team that he was building that you know were where the scale was and frankly there were already contracts with us companies willing to engage so we were able to explain that there was not a huge need for more cap right but for you to to think about this simply right um the closer you get to zero the more risk you're taking on and the more of that initial capitalization amount right you have to commit right now

the follow-up question to this I always get is okay but okay you've gone as low as$ 7,000 does that mean that oh if I I'm investing 10,000 Etc it's a strong case my answer is generally no right it has to be viewed Case by case but generally speaking right I've been successful I've had several cases in the you know 10 11 12 13 Etc um ,000 Range but these are not I wouldn't call these particularly strong cases simply because the officers are used to seeing bigger investment amounts right so immediately there's going to be more

skepticism simply put it is an investor visa and those numbers look less substantial that being said do not be discouraged the actual investment amount I'm sorry the exact the exact business type right and and your business plan matter a lot and this brings me to my to my next point you really the best way to think about this right people are so focused on the number rather than being focused on the number allow yourself to be guided by the business that you're starting so the best way to to the way I explain it to clients

is right um there's two parts to the business plan right there is the IM migration business plan that you are going to have to submit to um the consulate or to USCIS depending on how you're applying um that allow that to be your advisor's problem basically right like in our case um we work with a we have a company in house that we work with and we prepare um those um business plans and that's our job right because we use that to explain why the business qualifies now um the other part of the business plan

is has nothing to do with the VISA it's simply put your plan as the investor as the business owner of how you're going to build this business how you're going to make money how it's going to grow and how much money most importantly for the purposes of you know investment how much money do you actually have to spend to get this business off the ground right what does this business need what kind of expenses are absolutely essential for this business to get it off the ground right by starting here basically working backwards to you know

from the back forward it's going to be it's going to help you determine how much money you have to invest because once you figure out for example right you're starting um that's just use a e-commerce type business right okay you're going to be selling certain products well you need an inventory of those products okay where are you going to keep those products you need to Warehouse them somewhere okay so now you have you know cost for um the actual Goods themselves for the inventory then you have a cost for warehousing you probably have a cost

for equipment um certain technology right software Etc once you add these up you'd be surprised how quickly you would get to a bigger number because don't forget even though you might be paying just a one month um subscription or a six- Monon subscription initially for a particular software or you know particular expense you're going to need those month after month after month so the so the government understands that hey these are commitments that are more longterm than just simply put oh they've only paid for one month right so create a reasonable business plan looking at

your fixed cost that you're going to need to get the business off the ground and then figure out how much operating um Capital you need to start this business on top of that because you can assume that initially you may not have clients as quickly as you know as as as you're anticipating so basically um think through your own business plan and then build the strategy from there right now one thing I want to warn everyone about I always get asked this and a lot of times people assume that oh I hired a immigration lawyer

and he's going to once I hire the lawyer he's going to take care of all of this and and the answer is unfortunately not right um because a I'm not an investment adviser I can't tell you what to invest in and nor am I qualified to tell you what to invest in and also I don't know your business right I I don't know what this business needs right so rather than thinking that you know your your lawyer is able to advise you on that just start by creating this plan and then contact a lawyer to

kind of guide you through how you can um explain this plan in terms that the government can understand for Visa issuance purposes now I want to make a a final Point here about about the investment amount um well actually two final points one is don't forget that you have to prove that the what the amount you're investing comes from lawful source of funds right you're going to have to show that the amount you're investing in this us company was lawfully earned so you're going to have to show a tax return or you know a transaction

say you sold the property abroad you're going to have to show how you got the fund right so as you're thinking through um the investment amount consider this because what I see often is a lot of my clients get a gift from a relative right a parent or someone else for the um for the E2 investment um that for the funds they're going to use for the E2 investment and even though um the client is willing to provide tax returns Etc the individual gifting the funds the parent or whoever else the relative is not willing

to show where they got the money right they're not willing to show their tax returns so it's hard to prove this lawful source of funds so just keep in mind don't forget about this requirement because it's also important and then finally to give you sort of peace of mind um um if the government deems your investment amount um low right and they say look we don't think this is substantial at your E2 visa interview well they're going to tell you right like they're going to tell you look we want to see this this and this

we want to see a bigger amount we want to see bigger commitment so it's not the end of the world to put it bluntly it just means you can cure you can literally cure um this issue by investing more capital or maybe you know I've done this in the past where it was a low investment case and the government initially pushed back we were able to explain in with more detail with with more specific documents why it qualifies right and why the amount is substantial so the bottom line is rather than being Guided by the

Visa itself right be guided by your goals and what you are trying to achieve because keep in mind after you get the visa you actually have to operate this business you have to go in and you know create those jobs otherwise you won't be able to renew the E2 Visa right so rather than um being quote unquote annoyed by the lack of a specific number given to you by the government instead um use it as an opportunity to figure out exactly what your plan is um figure out a good business plan on how you can

make money and then use the E2 visa to realize um that goal and anyway I don't don't want this video to get too long but the bottom line is um the fact that there's no specific number for the E2 um investment amount is a huge advantage to all E2 investors and you should um use it to your advantage I hope this video was helpful I know this is a confusing topic I hope I was able to make it a little bit easier if you find any of this you know helpful please like subscribe to the

channel if you have other topics you may want me to You Know cover or that I can speak on just comment them below and I will try to do videos on those as well thank you so much for watching bye-bye [Music]