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Can I fulfill the E2 investment requirement by transferring most of my funds to my business account as working capital?

By January 11, 2023June 11th, 2025E-2 Visa, Uncategorized
A tree sprouting on top of an investment

Especially for types of business with low start up costs, such as service-oriented businesses which may practically be launched with only a laptop and an internet connection, entrepreneurs may be tempted to try and fulfill the E2 investment requirement by allocating funds to the business’s bank account as working capital, instead of by actually purchasing and expending these funds on materials and services.

Funds transferred to the business’s bank account reserved as working capital can and do count as part of the “investment” an entrepreneur makes to qualify for an E-2 visa. Having said that, working capital cannot be used as the bulk of your E-2 investment. You must spend a substantial amount of money on start up expenses. This is because the legal definitions of “investment” in the E-2 visa context require that the funds be “at risk” and “irrevocably committed” to the business’s operation. This means that the investment capital may be subject to partial or total loss if the business doesn’t work out.

The issue with a case where the majority of the funds are placed in a business bank account as working capital, is that it is easy to back out of the venture by simply transferring the money back from the business account to the entrepreneur’s personal account. In such a case, a consular officer may not be convinced that these funds are not at risk and irrevocably committed to the business.

In conclusion, to minimize the risk of your E-2 visa application being denied, it is very important to carefully review the expenditures you are claiming to meet the “substantial investment” threshold and evaluate whether a sufficient amount of capital arguably has been placed “at risk.” If not, it may be necessary to increase the amount of expenditures, in categories such as the ones listed in our earlier blog post here.

Consulates in different countries have varying thresholds in what amount of expenditure they view as sufficient, so it is highly recommended to consult with an experienced attorney especially if the amount of your expenditures is on the lower end.

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