Moving your entire life to a new country is rarely easy, especially for entrepreneurs. Starting a new business in your own country comes with a plethora of issues and factors to consider.
Doing it in the U.S. brings its own set of difficulties. But, after all, this is the land of opportunity. If you are interested in coming to the United States through an investment in a U.S. business, then you’ve come to the right place.
Entrepreneurs have two main ways to work in the U.S. through their investment: the E-2 visa and the EB-5 green card. The main difference between the two is that the E-2 is a temporary visa while the EB-5 is for entrepreneurs who want to stay in the U.S. permanently.
Because it’s more accessible, we’ll focus more on the E-2 visa. Though if you are interested in getting the EB-5, you should know that the minimum investment requirement for businesses in rural areas is $500,000. In all other cases, the minimum is $1 million.
To meet the main requirements for the E-2 visa, you need to:
Seems simple, right?
However, if you didn’t notice, those last two requirements are relatively vague, especially coming from the cut-and-dry methods of the United States Citizenship and Immigration Services (USCIS). Because of this, countless E-2 applicants end up making major mistakes that cost them their visas.
Here are some of the common mistakes they tend to make and how you can avoid them.
One of the issues that we see come up time and time again has to do with the vague instructions surrounding the amount that should be invested. All that the USCIS seems to say on the amount is that it should be “substantial.”
So, what does a “substantial amount” mean?
It means that your investment amount should be considered substantial compared to the cost of either starting a new business or purchasing an existing one. Unfortunately, because there is a sort of sliding scale that varies depending on the size of the business, this doesn’t do very much in clarifying the requirement.
Basically, the smaller the business, the larger percentage your investment must be of its value. Here’s an example:
Neil is a foreign-born entrepreneur who is interested in acquiring a small bakery in the U.S. worth $150,000. To qualify for an E-2 visa, Neil will likely have to invest 90%-100% of the funds necessary to purchase the bakery. On the other hand, if Neil were interested in investing through a midsize restaurant chain worth $10 million, he might be responsible for investing just 15%-20%.
A general rule of thumb is to make sure your investment is at least more than $150,000. If the business you are starting/buying is not worth that much, you might risk having a marginal business, which we’ll talk about in a little bit.
It can be tempting to think of your E-2 visa finds as simply something that you can invest and let be. However, then you would be missing the point of the immigration system altogether.
The USCIS wants to see that your admission into the country will be beneficial for both you and the U.S. By showing that you plan on investing not just your money but also your time and effort, you end up with a solid case.
The requirements state that you must be coming to the U.S. solely to develop your enterprise. This means that you can’t simply “buy” this visa. Many people think that they can simply purchase a piece of land and use it a vehicle to enter the U.S. You need to work on growing the business and extending your impact on the community and on the U.S. economy.
There are several ways to immigrate to the U.S. by starting a business. While these generally do not explicitly state that you need to have a business plan, you probably won’t get far without one.
Like we said earlier, the USCIS wants to see that you have a high likelihood of succeeding here. They want your business to flourish so that you can contribute both to the economy and the local job market.
That’s right, the best thing you can do is include a plan to hire U.S. workers. We’ve seen very few petition get approved without this. In fact, for the EB-5 green card, you will be issued a two-year probationary period that will end if you’ve hired at least 10 U.S. workers by the end of that time.
As for the rest of your business plan, you should collect financial statements, equipment and labor costs, leasing information, and profit margins into a comprehensive plan that you can present to the USCIS or immigration officer. Remember, you don’t have to prove that your business will succeed, only that you are prepared and willing to make it succeed.
Plainly put, a marginal business is one that does not and will not have the capacity to support you and your family during your stay. This goes along with having a robust business plan. By showing that you are in a position to develop the business and make it succeed, you end up proving that the business isn’t marginal.
But then you might ask, what if I want to start a business from scratch? The USCIS takes this into account when you petition. According to their website, “A new enterprise might not be considered marginal even if it lacks the current capacity to generate such income.”
To fulfill the requirement, however, you will need to show through your business plan that your business can generate the necessary income within five years of your arrival in the U.S.
Lastly, the easiest way to sabotage your own entrepreneurial efforts in the U.S. is to do it all on your own. Because there are so many forms to fill out, payments to make, and documents to send, one small mistake can damage your case and cause unwanted or detrimental delays.
When hundreds of thousands of dollars are on the line, you don’t want to leave anything to chance. To avoid this pitfall, hire an expert in immigration law to help you through your case from start to finish.