An E-2 visa is a visa that entrepreneurs can obtain if they start or buy a business. You can find out more about the E-2 visa requirements by clicking here.
One of the E-2 visa requirements is that the applicant must invest personal funds in a business. The funds can come from any legitimate source including personal savings. Funds can also be gifted or loaned to the applicant. Both secured and unsecured loans are acceptable, as long as the security is not the E-2 business.
One question that often arises is whether funds can be gifted or loaned from someone who co-owns the E-2 business.
For example, let us say that Frank and Fred are brothers who would like to buy a business. Frank has $200,000 that he has obtained through employment, and the business purchase price is $200,000. Both Frank and Fred would like an E-2 investor visa and Frank is willing to gift or loan Fred $100,000. Would this work? The short answer is probably not.
While gifts or loans are permitted for an E-2 visa, a Consular officer is likely to conclude that Fred did not really invest anything and that Frank bought the business and gave half of it to Fred. While it is possible a Consular officer would accept this arrangement, it is not recommended. One option might be to hire Fred as the E-2 Employee, but the investor option is not a good one. Another option is for Fred to borrow the money from another friend or relative. The key take-away point is that it is not recommended to loan or gift funds to another E-2 investor if person giving the loan or gift owns some of the business.
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