When we speak to clients who are interested in the E-2 visa, they often ask what the first step will be in the process. If the E-2 investor plans to start a new company (as opposed to purchasing an existing company), the first step is the E-2 visa business entity setup and incorporation in the United States. Below we discuss tips and important information to be aware of to ensure this process can go as smoothly as possible.
- Incorporate your E-2 business in the *State* where you will *operate* to avoid extra *compliance* obligations and *fees* in multiple jurisdictions like Delaware.
- Choose the right *entity type* (corporation or LLC) and review *State-specific requirements*, such as New York’s LLC publication rule, before filing.
- Secure a *registered agent* and, if needed, a *local address*, then file incorporation, obtain an EIN, open a *U.S. business bank account*, and begin qualifying E-2 investments.
Key Steps for an E-2 Visa Business Entity Setup
Deciding Where to Incorporate Your E-2 Visa Business Entity Setup
The first step in the entity set up process is to decide where to incorporate your business. While many investors assume that Delaware is the best option, this is not always the case.
If your primary office will be located in another State and you incorporate in Delaware, then you will need to register to do business in the State where your business will operate. This means your company will be subject to compliance requirements in two jurisdictions, Delaware and the State where you will actually operate.
Unless there is a specific reason you want to incorporate your business in Delaware, we generally recommend incorporating in the State where you plan to operate to avoid excessive compliance requirements and fees as you launch your business.
Legal Considerations for Your Entity Type
Consider Whether to Set Up a Corporation or Limited Liability Company
The next step in the process is to decide which type of business entity to set up. Our firm has created a useful resource in the chart found at this link to help clients determine which option works best for them.
You should also research State-specific information for each type of entity as some States have additional compliance requirements for certain types of entities. For example, New York requires that all LLCs meet a publication requirement.
Essential Requirements for Incorporation
Confirm Your Chosen Name is Available
Before filing your paperwork, ensure that you have read the instructions on the State website carefully and confirmed that the name you have chosen is available. Many States have a business entity search function on their website that allows you to check whether a name is available before you file.
Obtain Office Space and Hire a Registered Agent
All States require that you have a registered agent listed on your incorporation documents. The registered agent can be an individual or a company with a local street address who is authorized to receive legal documents on behalf of the company.
While you can use your own address or that of a friend or family member if they live in the State of incorporation and are willing to act as registered agent, this means the information is publicly available. Given this, many of our clients prefer to hire a company to act as registered agent.
It may also be necessary to obtain a local office address. While a physical location is a key factor, you should understand the role of lease agreements in securing your visa. Some States require a local address be provided on the incorporation documents while others allow addresses from outside the State or even outside the U.S.
File Your Incorporation Paperwork
Once you have completed the steps above, you can move forward with preparing the Articles of Organization or Incorporation and filing with the State. Most States have online filing options and some have options for expedited filings. It is important to read the incorporation instructions carefully to ensure your filing is not rejected. Once it is approved you will receive the filed Articles, usually by email. Retain a copy in a safe place, as you will need to provide this as part of your E-2 application.
Next Steps After Setting Up Your E-2 Entity
Congratulations, your E2 entity is set up! What should happen next to keep the E-2 process on track?
Once the entity is set up, the next step is to apply for the Employer Identification Number (EIN), also called a Tax ID. If you do not have a U.S. Social Security Number, you should review the steps for opening an EIN number and a U.S. bank account specifically for nonimmigrants.
You should also prepare your corporate ownership documents, which will vary depending on the entity you picked. For example, you can operate multiple businesses under a single LLC if you structure your entity correctly from the start.
After the EIN is issued and the corporate ownership documents are drafted, the next step is to set up the U.S. business bank account, fund the account, and start making common E-2 investment expenses to get your company up and running. Remember that even attorney fees can be included in your total investment amount.
Expert Guidance for Your E-2 Visa Journey
At Scott Legal we have experience guiding our clients through every step of the E-2 process. We also offer the service of incorporating your E-2 entity. If you are interested in learning more about the E-2 visa we invite you to download our free immigration guides or join one of our webinars to learn more. To discuss your case and receive personalized advice, you can also schedule a consultation with our team.
