Immigration
2024 E-2 Visa Reference Guide for Real Estate Investors
Author:
Date:
September 3, 2024
5
min read
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- Introduction: The E-2 visa continues to provide flexibility for foreign investors desiring to
develop and direct enterprises in the United States. Foreign investors willing to invest to launch
a start-up, buy a franchise, or buy an existing company may seek the E-2 visa by establishing a
real estate related business. - Fundamentals:
- Treaty Country. The foreign national seeking an E-2 visa must be a national of a treaty
country. To determine if a country has a treaty with the U.S., one must review the U.S.
State Department website at: https://travel.state.gov/content/travel/en/us-visas/visa-
information-resources/fees/treaty.html For purposes of an E-2 visa, a person’s
nationality proven by a passport establishes nationality. It is not necessary to have been
born in the treaty country. Thus, for example, an Indian born investor, that obtains
Canadian nationality may seek an E-2 visa through the Canadian nationality. - Determine if the investor will be an individual or a foreign corporation.
- Determine the source of the investment. Foreign investors must establish that they
obtained the investment funds through legal means. Accordingly, they must show that
they have possession and control of the investment funds. Thus, if a foreign corporation
owns and controls the funds, then that entity may be the investor. In some cases, the
owners will take a shareholder distribution from the foreign entity, and then apply for
the E-2 visa as an individual investor. Most legal mechanisms qualify for investment
sources. Examples of legal sources include: earnings and savings; sale of property;
inheritance; gifts; unsecured loans; loans secured by personal assets; and lottery
winnings. Of course, keep in mind that the U.S. will want to scrutinize the
documentation proving the investment source. - Determine the most practical corporate form and jurisdiction to incorporate in the U.S.
In the U.S., individual states regulate the formation of legal entities. Foreign investors
should consult with tax experts to evaluate the best corporate form for tax purposes.
Furthermore, consider the optimal state for business operations and for tax
management. For example, many foreign investors decide to incorporate in Texas
because Texas does not impose individual income tax. - Determine whether a U.S. based partner will be necessary. It is not a requirement to
partner with a U.S. citizen or resident. However, some foreign investors have found it
helpful to partner with a local so that they may launch operations at a quicker tempo.
Please note that the foreign investor must control the enterprise by maintaining a
minimum of 50% ownership interest. - Determine if employees will be necessary for the business model. The statutes and
regulations do not require employees to qualify for an E-2 visa. However, the laws do
require that the enterprise has the capacity to generate more than sufficient income to
provide for the investor and his or her family. One way to establish this requirement is
to show employees or usage of independent contractors. With planning, the foreign
investor can establish this requirement. Verdin recommends a detailed business plan to
satisfy this requirement. - Determine the real estate strategy.
- Strategies: In real estate not one size fits all. Depending on available investment funds, on
experience, and market conditions, the foreign investor can determine the real estate strategy
that fits his or her needs. Fortunately, the U.S. government has shown flexibility in
adjudicating real estate related E-2 visa applications. Below is a non-exhaustive list of some
strategies that have proven successful in the past:
- Buy single family residence property, add value, then sell for profit. A proven track
record in utilizing this strategy is helpful, but not necessary. - Buy a portfolio of residential properties, then rent and manage them. Being a landlord
for multiple properties takes time and effort, and thus depending on the number of
properties, this can be an effective strategy. - Buy a commercial center with the goal of developing the center to lease out to
commercial tenants. - Buy raw land or lots, develop the land, build, and sell residential properties.
- Set up a property management company to manage properties for others.
- Provide consulting to other real estate investors.
- Combine any of the above.
- Benefits: Below is a list of benefits that an E-2 visa holder may seek:
- Ability to develop and direct an enterprise in one of the strongest and most stable
economies in the world. - Obtain a U.S. Social Security number to build credit and access U.S. capital markets.
- E-2 dependent spouse may obtain employment with any U.S. employer.
- E-2 dependent spouse may also obtain a U.S. social security number.
- Dependent children under 21 may attend school without obtaining an F-1 visa.
- Ability to renew the E-2 visa indefinitely.
- E-2 investors desiring to grow their companies with other key executives and specialized
individuals with the same nationality may sponsor E-2 visa employees. This is a creative
strategy to grow one’s business.
- Risks: Every investment carries risk. However, many foreign investors have considered real
estate investing as a viable option because it is tangible asset that has a liquidity level that is
generally higher than other corporate investments such as franchises or existing companies.
Moreover, there is a risk of a visa denial. In most cases, an applicant may seek to overcome the
basis for denial. However, this generally requires more investment.
- Opportunity: Globally, E-2 visas have a high approval rate because the U.S. government is
motivated to encourage foreign investment into the U.S. Furthermore, most consulates
process the E-2 visa efficiently so that a foreign investor may obtain results within a matter of a
few months, and not years. For foreign investors, entering the U.S. quickly to develop an
enterprise may be another way to diversify business interests around the world.
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