Three basic elements must be present for the E visa category to be available. If any of the three elements are missing, the E visa category cannot be used.
A treaty between the United States and the country of which the treaty enterprise is a “national”
At least 51% ownership of the investing enterprise by nationals of the treaty country
Citizenship in the treaty country by principal investors and enterprise employees seeking admission through the treaty enterprise. (Not applicable to beneficiaries of E-2 visa holders.)
The United States Consular Officer abroad or the Bureau of Citizenship and Immigration Services Officer reviewing your case will determine whether the particular financial arrangement is a qualifying “investment.” As per the Foreign Affairs Manual, notes 1 through 13, the following factors are relevant to this analysis:
The investor must make an irrevocable commitment of funds that represents an actual, active investment.
The concept of “investment” connotes risk. If the funds are not subject to loss if the business fails, then it is not an “investment” in the statutory sense.
If the availability of funds arises from indebtedness, then certain criteria must be examined. For instance, indebtedness such as a commercial loan or mortgage debt secured against the assets of the business cannot be counted toward the investment since there is no element of risk. If the business enterprise itself is used as collateral, funds from the mortgage or commercial loan are not at risk. This is true even if personal assets are also used as collateral.
Loans secured by the investor’s own personal assets (mortgage on a home; unsecured loans; and loans secured on the investor’s personal signature) qualify as an investment. Funds received as a gift or inheritance also meet the criteria.
In summary, at risk funds in the investment visa context include only funds in which personal assets are involved (e.g. including personal funds, mortgage on a personal dwelling, or similar personal liability.)
Payments in the form of leases, rents, property, or equipment are counted toward the investment up to the amount of funds devoted to a particular item in any one month.
A purchase of a business may be conditioned upon receipt of the visa. Notwithstanding the condition, the investment of funds constitutes a commitment so long as the assets to be used for the purchase are held in escrow for release only upon the condition being met. In other words, the investor must have reached an irrevocable point in the transaction to qualify. Note: the intent to invest is not enough. Likewise the possession of uncommitted funds in a bank account will not suffice. The investor must be close to the start of the actual business. It simply is not enough that the investor is in the process of negotiating contracts or lease agreements.
The investment must be substantial, taking into account only those financial transactions in which the investor’s own resources are at risk.
There is no bright line dollar figure test. The requirement is met by satisfying what the State Department calls the “proportionality test.” The test is a comparison between the amount of qualifying funds invested and the cost of an established business. For newly created businesses, the comparison is between the amount of qualifying funds and the cost of establishing such a business.
Stated another way, the actual amount invested in the business must be compared to the total value of the business. This is accomplished by assessing the percentage of the investment in relationship to the cost of the business. If the two figures are the same, the investor has made a 100% investment. For example, a new enterprise, such as an accounting or consulting firm, may need only $65,000 to become fully operational. An investment approaching 90 – 100% would clearly meet the test. However, a business costing $150,000 would require a lesser amount, let’s say an investment of only 75%. In the case of a business costing $500,000, an investment of 60% would meet the test. Some investments may qualify based on sheer numbers. For example, an investment of $10,000,000 in a $100 million dollar business would qualify without further analysis.
The funds should be sufficient to ensure the investor’s financial commitment to the successful operation of the business. Also, the funds should be of a magnitude to support the likelihood that the investor will be successful in developing and directing the business.
The investment cannot be marginal in nature. It must have the capacity to generate more income than just to provide a living to the investor, or it must have a positive economic impact in the United States, i.e., create job opportunities for U.S. workers.
The investment must not be solely for the purpose of earning a living for the investor and his or her family. In other words, if the income generated from the business exceeds what is necessary to support the investor and his or her family, then the investment is not marginal. However, if the investor cannot meet this test, the BCIS will look to other factors, including the economic impact of the business on the US economy. If the business demonstrates the present or future capacity to positively impact the economy, the marginality test is met. Projected future capacity should generally be realizable within five years from the date the business commences.
The person for whom treaty-investor status is sought must fill a key role with the company, either as the investor who will develop and direct the investment, or as a qualified manager or specially trained and highly qualified employee necessary for the development of the investment.
To meet this requirement, the investor should have controlling interest in the business. The rule of thumb here is that the investor should own at least 51% of the enterprise, and retain full right of control.
An equal share of the investment in a joint venture or an equal partnership of two parties, may give controlling interest, if the joint venture and partner each retain full management rights and responsibilities. This arrangement is often called “negative control.” With each of the two parties possessing equal responsibilities they each have the capacity of making decisions which are binding on the other party. Equal partnership with more than two partners would not give any of the parties control based on ownership, as the element of control would be too remote even under the negative control theory.
An equal share of the investment may qualify where the investor can prove that he or she possesses controlling management responsibilities. A joint venture may also meet the requirement, provided the investor can show that he or she has, in effect, operational control.