Can I Include Intellectual Property as an E-2 Visa Expense? Is IP a valid E-2 Visa Expenses? How do I Value my IP so that I Can Include it as an E-2 Visa Investment?
One E-2 visa requirement is that the investor must invest a certain amount of money in the United States. The government does not specific the exact amount that has to be spent but instead the amount depends on the type of business, the cost to get the business up and running and where you are applying.
You can find out more about the amount required for Investment for an E-2 visa by clicking here.
You can find out more about the E-2 visa requirements by clicking here.
One often overlooked E-2 visa expense is Intellectual Property (IP). Intellectual Property is a valid E-2 visa expense under certain conditions and the regulations specifically address it. The relevant regulation states this:
Intangible Property Rights to intangible or intellectual property may also be considered capital assets to the extent to which their value can reasonably be determined. Where no market value is available for a copyright or patent, the value of current publishing or manufacturing contracts generated by the asset may be used. If none exist, the opinions of experts in the particular field in question may be submitted for consideration and acceptance. -9 FAM 41.51 N8.2-3
So what does this mean? When can Intellectual Property be included as an E-2 investment amount?
The key here is that you are able to provide objective evidence regarding the value of the intellectual property and the more objective and reliable the evidence, the more it will support the inclusion of the amount as an E-2 investment expense. We have created a chart that lists some different types of evidence and commentary regarding their effectiveness.
|Evidence||Quality of Proof||Comments|
|Money paid to developers of IP||High||If you paid a third party to develop intellectual property (even if the payments were made to people outside of the U.S.) this forms an objective basis for value and the full amount of the money paid can usually be included in the E-2 investment.|
|Documentation of Investor time spent on developing IP (eg. an hourly rate multiplied by time)||Low (no value)||Individual investor time spent on developing a software cannot be included as an E-2 expense|
|Letter from Expert regarding the valuation of the IP||High||The key here is that the person is an expert in the field. In addition, the expert should write a formal report that shows how they arrived at their conclusions (Eg. references to sales and or contracts) and what assumptions they made. The letter should also explain the background of the writer and why they are an expert.|
|Letters from third parties (or the applicant) who are not experts regarding the merits and value of the IP||Low (no value)||Letters from experts are the evidence that any examine expects if a letter is being put forth.|
|Independent valuation from a company that specializes in this type of valuation.||High||There are many companies that offer the service of valuing IP and this process is similar to the process of getting an expert to write a letter. The fees will depend on the complexity and formality of the valuation process and the more formal and detailed the valuation is, the more credence it will be given.|
|Evidence of contracts/bookings, that show the value of the IP.||Medium||This is acceptable evidence but it is hard to put a firm dollar value on this type of evidence.|
The ultimate determination of whether a value for IP can be included in an E-2 investment will depend on the facts and circumstances but Scott Legal has included IP in numerous E-2 cases (past results do not predict future outcome) and can guide you through the process.
For more practical information and legal advice on immigrant and nonimmigrant visas, contact Scott Legal, P.C. Call 212-223-2964 or email firstname.lastname@example.org for a consultation.
Ian E. Scott, Esq. is the Founder of Scott Legal, P.C. He can be reached at 212-223-2964 or by email at email@example.com.
This website and blog constitutes attorney advertising. Do not consider anything in this website or blog legal advice and nothing in this website constitutes an attorney-client relationship being formed. Set up a one-hour consultation with us before acting on anything you read here. Past results are no guarantee of future results and prior results do not imply or predict future results. Each case is different and must be judged on its own merits.
- Can I apply for an E-2 visa with minimal startup costs? If I am starting a consulting firm with almost no overhead to startup, why do I need to make expenses now for an E-2 Visa?
- What are Common E-2 Investment Expenses? How can I increase my E-2 Investment Amount?
- How will my E-2 investment be calculated? Can I apply for an E-2 visa if my investment was made several years ago? Can I include expenditures in my E-2 investment that were made before I started the business?