Balancing Act

One of the fun things about running a successful consulting firm is that we have the opportunity to help clients realize their business dreams. One of the ways we do this by helping our entrepreneurial clients develop business plans that are detailed and at the same time functional.

It is particularly rewarding when we have the opportunity not only to help a client realize their dream of business ownership but also to help them realize their dream of immigrating to the United States. Though it may sound cliché’, the American Dream is still alive and well; even today, many citizens of other countries still aspire to live in the United States and to make a meaningful investment in the U.S. economy.

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We recently had an opportunity to help just such a foreign investor and thought it might be useful to share with you what is involved with making this dream of becoming an entrepreneur a reality here in the States.

There are a number of visas that may work for an individual depending on their particular situation. For those wishing to start a business or invest in an existing U.S. business, the E-2 Treaty Investor Visa is probably a viable choice as long as you are a citizen of a nation that the U.S. has a treaty with.

As you begin this process you will quickly realize that you need a team of professionals in your corner. At minimum, you will need to work with competent legal counsel here in the U.S. We work with a number of immigration attorneys throughout the country and would be happy to recommend someone to suit your specific situation.

You may find that you will also want someone familiar with securing the proper business licenses and who is able to assist with the negotiations that are always part of starting a new business. This is particularly true in terms of equipment and real estate purchases. Partnering with a company that has the necessary experience and is truly looking out for your best interest can save thousands of dollars.

The EB-5 permanent resident investor visa requires the individual to have $1,000,000 to invest. In contrast, the E-2 Visa does not place a specific dollar amount on the particular investment. Instead the E visas allow you to pursue long term investment objectives for two to three year periods. The investment threshold for the E-2 Visa depends on the type of business and industry.

The E visa program is administrated by the U.S. Consulate in the treaty country. The process is generally considered to be a discretionary process. Due to the discretionary nature of the visa approvals, it is imperative that the visa applicant prepare and plan with the following considerations in mind:

Nationality - the applicant must be a national of the treaty country. It is likely that the Consulate will look at the ownership of the business to determine that a minimum of 50% ownership is owned by a national of the treaty country.

The investment must be substantial - This is a very broad standard, but in general the investment that the investor applicant is making must be sufficient to ensure the successful operation of the enterprise. If the business already exists then it is important to establish that the investment is substantial in relationship to the value of the business. If the applicant is investing in a startup then the visa applicant will be asked to demonstrate that the investment is sufficient to start and operate a business of that particular nature. It is important to note is that the amount of investment that is deemed substantial may vary greatly depending on the type of enterprise. For example, a manufacturing business may require greater investment than that required of operating a hotel.

The investment must do more than provide a living for the investor; with this in mind, it is important that the business show an operating profit. The business financials will be examined periodically to ensure that business is not generating an operating loss.

The investment must be real and active. In short, this means that the investment must be of the type that the investment must represent a real risk. It is not sufficient to place the funds in a passive investment such as stocks or a bank account. Purchase of a franchise or real property provides a good example of an active investment.

Control - The funds used for the investment must be under the control of the applicant. The fund could come from gifts, inheritance or savings but the funds must be controlled by the applicant. It is also helpful to know that the location of the funds is not of particular importance. Only that the funds are under the applicant’s control.

Employees - Individuals who are necessary to the direction and operation of the company may also qualify for an E-Visa as long as they are from the same treaty country. These individuals typically work for the company as an executive, manager or specialized workers.

Along with the items listed above, the applicant will also need to provide information about the U.S. operations. The list is long but in essence you will need to provide evidence of ownership such as stock certificates, etc. You will also need to provide financial statements, sample contracts, organizational chart and a formal business plan.

The business plan will need to include revenue projections, estimated costs and staffing. It is in this area that we are able to help our clients. Creating a comprehensive business plan requires detailed research and the ability to articulate a successful business strategy. More importantly, we work with clients to create a business plan that is realistic, measurable and functional.

Want to realize your own version of the American Dream? We can help!

If you are considering applying for an E-2 Treaty Investment visa or if you are an immigration attorney with a client that needs help with their business plan, it would be our pleasure to talk with you and offer assistance.

Please contact us at (203) 404-3974.