What Principal Investors should know about E-2 Visa for Startups

The E-2 visa for startups is a great way for bootstrapped startups to get a startup visa. There are a lot of advantages you get in an E-2 visa for startups: it is available all year round, you can renew it indefinitely, it is open to sole or majority owners, and a business can get it by showcasing a strong business plan even if they aren’t already in full swing.

The drawbacks to E-2 visa for startups is that it is only available to citizens of treaty countries (Brazil, China, and India are not treaty countries). Also, the initial funding for the startup has to come from citizens of the applicant’s country. This means that you cannot get funding from US Venture Capitalists or Angel Investors.

There are two categories of people who can qualify for an E-2 visa: the principal investor and employees. This post would focus on the principal investor category. This category is ideal for founders who have invested their own money in the startup and are actively involved in its management.

E-2 Visa for Startups Requirements

The following are some the requirements you need to fulfill in order to qualify for an E-2 visa for startups:

• Citizenship: To qualify, you need to be a citizen of an E-2 country. You should note that being a permanent resident of an E-2 country will not qualify you for an E-2 visa.
• Ownership: The Company must at least be owned by citizens of your treaty country. Note that a person who holds a US Green Card would not qualify even if he is a citizen of your country.
• Personal Investment: In order to qualify, the funds you invest need to come personally from you. This means that it must be money in your private control. For instance, funds you get as gifts from family, friends, or cofounders would qualify.

On the other hand, a loan you secure with a company asset would not qualify. Also, if the funds were invested by a company you own, it would not qualify. The funds have to be personally guaranteed.

• Substantial Investment: Another metric used to grant you an E-2 visa for startups is whether or not your investment is substantial. Your investment can be in the form of cash, intellectual property, or physical property.

For your investment to be categorized as substantial, it needs to be an investment that is essential to keep the business up and running. If the business is one that requires a lot of heavy equipment and inventory, your investment amount would be high. If it is just a startup that requires a laptop and an internet connection, your substantial investment would not be so high.

• Irrevocability: This means that you need to have your investment tied down in the US. This can be by using it to purchase things like equipment and other initial costs.

Alternatively, you can put your funds in an escrow account and instruct that it should be used to buy startup equipment if your visa is approved. If it is not, then your funds would be returned to you.

What the department of state does not want is a situation where there are some funds sitting in a corporate bank account. This is because those funds can be easily returned to the investor after getting the E-2 visa for startups.

There are a lot of other complexities involved with getting an E-2 visa for startups.