An E-2 investor visa allows foreign nationals of certain countries to run a business in the United States. They must own at least 50% of the business, invest a substantial amount of their personal funds and be planning to develop and direct the business in the United States. You can read more about the E-2 visa requirements here.
One of the main requirements of the E-2 investor visa is that the applicant invest a substantial amount of their personal funds to start the business. The investor must show that their personal funds are committed and at risk in the commercial sense, meaning that if the business were to fail, the investor risks losing these funds. The investor must also demonstrate that the source of funds for this substantial investment is legitimate, meaning they must show that the funds do not come from criminal activity.
Many of our previous clients have utilized gifts or loans in order to make their investment. When the money comes from a gift or a loan, the investor is still required to provide documentation to prove the source of the gift or loan. For example, if the investor is receiving a gift from a family member and the gift came from a sale of property, the investor would provide a signed gift letter, a copy of the Purchase/Sale agreement, proof of the family member receiving the funds from the sale of property and proof of the family member transferring the funds to the investor.
Loans are also a permissible source of funds for E-2 investment, with the caveat that the loan cannot be secured by the assets of the E-2 business. Loans secured by personal assets of the investor and unsecured loans are both permitted under the law, although some Consulates take a less favorable view of unsecured loans and these can be riskier. If an applicant is taking a loan from a bank, often the only documentation that needs to be provided is the signed loan agreement outlining the loan terms and security. In cases where the investor is getting a loan from a family or friend, the arrangement may be more informal than taking a loan from a bank so applicants sometimes ask if they must have a written loan agreement. The answer is yes, there should be a written agreement signed by both parties that outlines the loan details such as the timeline for repayment, interest rate, security and what would happen in the event of a default. The lender must also provide the applicant with documents to demonstrate that the loaned funds come from a legitimate, non-criminal source.
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