BUYING REAL ESTATE IN THE USA: WHAT DO YOU NEED TO KNOW ABOUT THE E-2 VISA?

 BUYING REAL ESTATE IN THE USA: WHAT DO YOU NEED TO KNOW ABOUT THE E-2 VISA?

Purchasing real estate in the US as an investor and making your money grow is entirely possible, provided you follow the legal requirements. Investir.US invites you to learn more about one of the essential visas for investors: the E-2 visa.

E' visas for investors in the United States

Investor visas in the United States come in several forms (E-1, E-2, EB-5) and apply to foreigners wishing to invest their money or expatriate across the Atlantic:

The EB-5 visa, created in 1990, grants the famous green card to anyone investing $1 million in an activity in the United States;

The E-1 visa meets the needs of investors who can prove that their business generates at least half of its gross profits between the US and their home country. The latter must have a trade treaty with the US. In addition, it is also necessary to prove that the business needs the person requesting the visa in the US for a specific period of time;

The E-2 visa is the most common. The reason for this is the investment amount, which is much more affordable than that required for the EB-5 visa. Although there is no investment ceiling, the E-2 visa generally corresponds to a financial commitment of around $70,000 to $100,000. The validity period of this visa varies depending on the partnership signed with the investor's country of origin. For example, for French citizens, it is 25 months, renewable.

What does the E-2 visa allow for foreign investors?

The United States Citizenship and Immigration Services ( USCIS ) defines an E-2 investment as "the investment by the investor of capital, including funds and other risky assets, in the commercial sense of the term, for the purpose of generating a profit." An E-2 investment can therefore be used to create a new business venture, as well as to purchase an existing business.

It is important to note that the E-2 investor visa is a non-immigrant document reserved for foreign entrepreneurs. The country from which they originate must have previously entered into a trade treaty with the United States. Through this visa, investors can enter and work in the United States, based on a substantial investment in a bona fide business. Obtaining a visa grants the investor who holds it:

To travel freely within and outside the United States

To stay for an extended period by regularly renewing your visa

To be accompanied by dependents under 21, parents and a spouse

On the other hand, the E-2 visa has limitations that you should be aware of:

It is limited to nationals of countries that have concluded a trade treaty with the United States.

It only allows holders to work for the employer or company that sponsored the visa

It is limited in time and requires renewal, which may cause possible delays in the application and extension process.

E-2 Visa Requirements for Foreign Investors

The E-2 visa requires the investor to engage in a bona fide business, otherwise the application cannot be considered. Immigration authorities define a bona fide business as "a genuine and active commercial or entrepreneurial enterprise that produces services or goods for profit."

The investor applying for the E-2 visa must therefore demonstrate the bona fide nature of his company, by presenting, for example:

Notice of Assignment of an Employer Identification Number by the Internal Revenue Service (IRS)

Tax returns

Financial statements

Quarterly payroll reports or payroll summaries (W-2 and W-3)

The company's organizational chart

Operating licenses

Bank statements, utility bills, advertising, telephone directory

Supplier/customer contracts or agreements

Escrow documents

The lease contract

Understanding the key requirements for obtaining the E-2 visa allows you to prepare your application in advance in order to present yourself as a qualified applicant.

What type of investment for a real estate purchase in the USA?

To qualify for the E-2 visa, certain rules must be followed.

A substantial investment

First, the investment must be substantial, meaning that its amount must be sufficient to ensure the proper functioning of the business. While some investments below $100,000 are approved, it is fair to say that the capital and investment reserves, for their part, cannot be less than this amount.

Personal and/or business bank statements required for an E-2 visa application, a detailed list of goods and materials purchased for the business, and associated accounting documents are all evidence that should be used to prove the size of the investment. It is also a good idea to prepare a business plan that illustrates the intended purpose and demonstrates the investor's ambitions.

Investor commitment

The investment must meet a certain level of risk. If the foreign investor is able to withdraw without losing anything, it is highly likely that they do not meet the required requirements. To start or take over a US business, the applicant must already have spent money. Note that loans secured by the assets of the investment company are not permitted. The amounts committed must reflect a risk in the event of failure. This is why, when purchasing an existing business, it is important to know everything about the latter and its counterparts.

Investing in a real, operating business

For an E-2 visa application to be eligible, the business must be operating, meaning it offers tangible goods or services. For example, restaurants, retail stores, and medical practices are considered investments. However, this is not the case for speculative or idle investments, or businesses in which the investor does not intend to serve as an officer. Similarly, uncommitted funds in a bank account or similar security are not considered an investment.

Sufficient return on investment

Authorities do not accept applications for "marginal" investments. This means that the return on investment must be sufficient and the economic contribution significant. The U.S. company must generate revenues far greater than those sufficient to simply support the investor and their family. In other words, the investment must have an economic impact on U.S. territory.

Furthermore, the investor must be involved in the United States to manage and develop the business. If the applicant is not the primary investor, they must be employed in a supervisory or management capacity, or demonstrate highly specialized skills. The investor's role in the business, and therefore their hierarchical level, must be sufficiently senior for the visa application to be admissible.

When it comes to buying real estate in the USA, when it comes to an investment, it can lead, under certain conditions, to obtaining an E-2 visa. Under the law, "the acquisition of one or more real estate properties on American soil may give rise to an E-2 visa under certain conditions if the investment made is active and the operation generates jobs." To discuss your project with a French-speaking expert, to get support