Immigration attorney Elizabeth Jamae breaks down the E-2 treaty investor visa for entrepreneurs from treaty countries. You need at least 50% ownership, typically $100,000 to $150,000 invested (cash, IP, or company valuation), and must put $10,000-$20,000 at risk before your consular interview. Your spouse gets work authorization, and you can renew as long as the business stays viable.
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All right. Enough about the H-1B. You know how I feel about it. Let's talk about a visa that a lot of people don't— a lot of attorneys really don't focus on, but I think it's really valuable to you guys. And that's the E-2 treaty visa. Have you guys heard of it?
No.
OK. Well, I think it's something you should consider down the road. It's an investor visa, but it's really, really useful for those of you that are from countries that we have treaties with. And there's a lot of them. And I put the address on there. And I think this will be on the website later on. But you can just Google E-2 treaty countries. Because it's a great way to structure your company and funnel— I'll give you an example. Say you're from France. And you start a company. You have 4 individuals, 4 executives. And then you have 2 software developers. And you're all from France. Then you can set up a company in in the U.S. and just bring that team over on the E-2 visa. It's very cost-effective. And I'll explain to you in a little bit why. So, what's required? You have to at least— the company has to be owned by the treaty country national, at least 50%. And you can be an investor or an employee. This is why investors really like this visa as well. You have to have a substantial investment. Now, the rules don't tell us how much a substantial investment is. But we've known the last couple of years— and this is kind of what key metrics are— around $100,000 to $150,000 is a really solid investment to bring into the States to get an approval on an E-2. That number isn't thrown out a lot. And I don't know why, but I think attorneys try to keep it as their little secret weapon. But I'm telling you now. It's about $100,000 to $150,000. That can be in cash or that can be in IP. So we've been very successful in— if you have a valuation and saying you're bringing in, say, your company is valued at $3 million because you went through a seed round or whatever the number is.
$3 million.
We can use that valuation as long as you don't have a lot of debt. So as long as you don't have a lot of convertible notes in that investment, then you can use it as your substantial investment. That's why I have convertible notes there. You can use them, but just don't get so many that the debts outweigh the assets of your company. Okay? And what is investment at risk? That means that When you bring money over, you have to spend some of that money. So, getting a lease, incorporating your company, IP attorneys, stuff like that. There's lots of expenses that go towards putting your investment at risk. You don't have to spend all of it before your interview. Another key metric here is at least spending between $10,000 and $20,000 of that investment before you go to your interview in the consulate. Cannot be marginal. This is where the business plan comes in. You have to produce a business plan when you submit an E-2 application. That business plan just has to say that your company is going to support more than just you. So, how do you show that? You show that by creating your projections over the next couple— next 5 years to say that you're going to hire X number of individuals. Are there any questions about this one? How many countries are in it? There's a lot. There's a ton. It's kind of easier to name the countries that are not on the treaty. There's some Central African countries that aren't. But if you go— it's just a long, long list. I didn't want to bore you with putting lists on there, so— but check it out. Where are you from?
I'm here.
Oh. Okay. The other thing I like about the E-2 treaty visa is there's no filing fees. So, all you have to pay is, of course, your attorney's fees, but your visa application fee, which is somewhere around $200 USD at the consulate, which is extremely cheap when you're looking at the H-1B over the E-2. You usually get between 1 and 5 years for your visa. The officer determines that at your interview. The way that we submit these is we put together a bunch of information, we send it to the consulate from wherever you are, and you do an interview, and the officer asks you a bunch of questions. So depending on how the officer views your business, if it's viable or not, that allows him to determine how many years he wants to give you in a visa. So it's very discretionary. Typically, if you have a good business plan, you have a good model, especially if you have a little bit of traction, then you'll get your 5 years. And you get 2 years entry. So every time you come in, you get 2 years at a time. Your spouse can work, which is great because H-1B spouses, as you know, don't get to work. And that becomes a big issue. They can now in some situations, but it's difficult. So your spouse can work. You can renew it as many times as your company is still moving forward. And it's my favorite visa. I like it. It's really easy to work with the U.S. consulates abroad to have a successful outcome. It's not like working with officers here. The common issues I see around E-2 Visas are making sure that your source of funds is legal. So tracing where you got your funds. So I see that money— Does it matter where is it from? Like from the US or from— It can be from the US. That's great. And it can be from wherever your home country is.
And it can be split with the 2 families, right?
Can you—
Like the fee for this visa can be split by the 2 families.
There's no fee, right? So each individual that goes to an interview at the consulate has to pay their visa fee, because the visa fee is attached to the individual. But as far as attorney's fees, are you asking? As far as you can split that up?
No. I mean, does it have an amount— like, to apply this visa, you have to pay—
Oh, I know what you're asking. So, if you're 2 people, do you have to put $200,000 in?
Yeah.
No. So, it's just one main investment. And then, you can use that investment to base multiple applications. So, the company— you have to think of it like this. The company is the applicant. So, the company is receiving an investment. And then you have other— then you have your found— say, 2 founders. That's a separate application that piggybacks on the company's E-2 application. Does that make sense?
Yeah, more or less.
Okay. So, when you go— when you get ready to submit an application, you have basically 2 applications, one for the company, to designate it as an E-2 company and one for the individual that's coming over. But it's the same investment across the board.
Okay.
So, for example, say you're a gaming company and you put $300,000 in and you bring 2 founders over. And then 2 years later, you want to bring 2 more engineers over from, say, France. Then you can go back and use that initial investment with the additional developers' applications.
Okay. Thank you.
Mm-hmm. Another issue I find is that your cap table from your home country is a mess. Oh, go ahead.
Is there a limit for that?
How many people you can bring? No, there's not a limit. There's nothing in the regs that say there's a limit. I will tell you, however, that if you only want to put $100,000 in, but you're bringing 5 engineers over, Even though you don't have to go up against a salary requirement like you do with the H-1B, it's going to be hard to prove to the officer that you can support 5 individuals on a $100,000 investment. You have to get a little bit creative. Does that make sense?
Mm-hmm.
Your cap tables. In your home countries, So the example I would give is that you take some seed money from 15 individuals. And somehow you've given up about 40% of your equity in your company. It happens. So when I go to try to prove that the company is 50% owned by, say, a national from Britain, it's really, really difficult because I have to go back and trace all of the investors. And make sure that there is at least 50%. So if you can keep your cap tables nice and clean prior to coming to the U.S., I know it affects you in many different ways. So it's just something to keep in mind. And then also the only other issue that comes up with the E-2 is say, for example, you have 45% owner— sorry, you have 55% ownership in your company when we do an E-2. And then you come over here and you go through a Series A round, you're going to lose that 50% majority. So, it might not be the best visa in that case for you because you'd have to flip from an E-2, say, to another type of visa very quickly, and that's stressful. So, just keep that in mind if you're coming over. Your attorney should recognize that. But if you're coming over here and you've already given up quite a bit of your— your equity, it might not be the best visa available for you.
