This article is based on a video originally recorded on Visa Franchise Youtube Channel
Elizabeth: Hi, everybody. Thank you so much for attending this webinar with Visa Franchise and GETS Immigration. So, before we begin, I just want to say if you have any questions regarding the investor immigration process, please ask on the chat room, and we’ll answer all the questions in the end, or you can email us at info@visafranchise.com You can find more information in the chat room.
Visa Franchise is an immigrant investor advisor, so we help find the best franchises for foreign nationals, we’ve helped hundreds of clients from over 35 countries, and we’ll actually start with Brian Getson who will be reviewing the types of immigration investor options out there. So, thank you so much, Brian, for being here and for being a part of it. If you could take it away. I will pull up your presentation.
Brian: Very good. Thank you so much for having me today, Elizabeth and Visa Franchise. So, my name is Brian Getson, I’m with the law firm of Getson & Schatz in Philadelphia, Pennsylvania and we represent individuals seeking to apply for E-2 visas in the United States and immigration is federal law, so we can represent individuals anywhere in the United States, in any state where they are applying for an E-2 visa. And I have been practicing immigration law, I’m entering my 24th year of immigration practice and our firm has handled many E-2 visa cases for investors.
E2 Visa issuances with President Trump
There’s really only one way to start talking about immigration in the year 2018, and that is with President Trump, and, you know, what I find with a lot of prospective clients is there’s a lot of just fear and anxiety, and, you know, basically just rumors and misunderstanding about, you know, what is going on with U.S. immigration.
Certainly you’re constantly hearing about the President in the news with building walls and, you know, dealing with caravans and trying to deport criminal aliens and my message for everybody is that investors are welcome to the United States in 2018, that the legal process for E-2 visas has not changed and, you know, the laws are still the same and, you know, E-2 visas, they’re still being approved around the world by consular officers and the immigration service in the United States. So, if you would like to come and invest, and live, and work in the United States the E-2 is still an extremely viable option and, you know, the message is that investors are welcome in 2018.
About E-2 Visa
To give an overview of what an E-2 visa is, it is to come to the United States to legally start, own or work for a company in the U.S. So, you know, this is not where you’re coming to work for a foreign company, if you’re opening a company in the United States that you’re going to have ownership interest in, and you are going to work for that company. And a franchise is an amazing way to do that. It is extremely straightforward to, you know, do an E-2 through a franchise.
You’re allowed to travel without restrictions when you have an E-2 visa and the visa validity is different for different countries. Some have longer validity period than others, some have a limited amount of entries, so when we say travel with no restriction, for some countries there are restrictions on the nature of the business that you’re going to obtain, but generally speaking, most countries, you’re gonna have a five-year multiple entry visa.
E-2 Visa validity time
You can bring employees of the same nationality to work for the company, and you can bring a spouse and children under 21 as your derivatives. E-2 is a non-immigrant intent visa to the extent that you have to have intent to return to your home country at the conclusion of the visa. But at the same time, as long as you’re running the business and, you know, you’re successful, you can remain in the U.S. indefinitely as long as you meet the E-2 requirements. You would simply need to maintain your status in the United States and extend your visa when necessary. And those terms, a visa is a travel path.
It’s the right to enter in and out of the United States. And again, that’s normally a five-year validity period from both countries and then your status is how long you’re allowed to stay in the United States following an entry and for E-2 that is two years at a time. And that’s governed by what’s called an I-94 card. And an E-2 it’s a temporary work visa, it does not lead to a green card, but you could apply for a green card by other means if you were eligible.
E-2 Visa, the path to other Visas
For example, there’s an EB-5 investor visa where the investment amount is much higher, but an E-2 visa could lead to an EB-5. If you have a family member who could sponsor you for a green card that could go on simultaneously while you have an E-2 visa. If you could maybe apply for a green card through what’s called a national interest waiver. So, there’s, you know, different ways that you can apply for a green card while you hold the E-2 visa.
But again, the point of the E-2 is to temporarily live and work in the U.S. So, I’m gonna go over the basic requirements now for obtaining an E-2 visa. So, the most basic one is that you have to be a national of a country that has a qualifying treaty with the U.S. And there’s a list of treaty countries on the U.S. Department of State website. And there are different treaties for E-2 which is the investor visa, and E-1, which is the trade visa.
E-2 Visa Basic Requirements
You just wanna check the website to make sure that your country is on the list of E-2 treaty countries. If you have a dual nationality, you hold two passports, then you can choose which nationality you want to apply for the E-2 visa under and, you know, you wanna pick the one with the better reciprocity schedule and that’s what I was talking about earlier, the visa validity period, the number of entries allowed. If one country has a more favorable what’s called reciprocity schedule, then use that nationality to apply for the E-2 visa.
However, if you’re applying for a change of status from within the United States, then you have to use the nationality of the passport that you used when you entered. So, again, that’s just something to keep in mind, we’re gonna talk about where to apply a little bit later, but if you are applying in the U.S. you can only apply based upon the passport that you used to enter. And while this is, you know, usually not common you can have multiple individuals of different nationalities apply for an E-2 visa under the same business ownership if they own at least 50% and develop and direct the business.
Investment Amount
The third main point is that the investment has to be substantial in relation to the cost of purchasing and starting the E-2 business. The more you invest the better. So, again, the higher the amount of the investment, the greater the chance of you receiving the E-2 visa, because the consular officer is gonna believe that the business is real and legitimate, and is going to work if you’re investing more money.
To determine what is substantial there’s something called a proportionality test, so you compare the total amount of the investment in relation to the total cost. So, I like to tell clients that $100,000 is a good investment amount and you can usually get a good franchise for that amount of initial investment and, you know, if you’re gonna invest for that amount you wanna be investing at least 75% to 100%. And the lower you go, the higher the amount of the investment.
With a $50,000 investment, you need, you know, 90% to 100%, if you were investing like a million dollars, you would probably only need to invest 60% of that…sorry, if the total investment were $1 million, then, you know, maybe a 60% investment will qualify. And then you could have other people investing the other amount.
But, in a franchise situation, usually you’re looking at this $100,000 investment. And the higher, you know, some are certainly higher, and the higher you go, the higher the chance of approval. And again, with most franchises, you’re the one investing the full amount 100%. So, it becomes very straightforward and, you know, you should look for a goal of $100,000 of an investment, the higher the better, but certainly, if it’s less than that it can still be feasible.
Funds for E-2 Visa
The next main point is that the funds have to be invested or you have to be actively in the process of investing in a U.S. business. So, you know, I, as a lawyer like to minimize risk for clients. So, if you go ahead and you invest the full amount in the franchise and the visa, the E-2 visa is denied, then you will have invested that money and you won’t have the visa and then you’re gonna have to turn around and sell the franchise. Because you would not have been allowed to come in and work in the United States.
How To Avoid The Risk?
A way to avoid that risk is to make the investment contingent on receiving the E-2 visa to avoid losing the investment if the visa is not approved. And that’s something that you have to talk about with the franchisor, you know, I think that most of them are amenable to that, you know, they’re interested in selling the franchise, you’re interested in, you know, being able to run the business to get the E-2 visa. And at the same time, you don’t wanna lose your money if the visa is not approved.
The investment funds have to be what’s called at risk if the business fails. In other words, you can’t have a loan that is secured by the business, because then if the business fails, you do not personally lose your money. So, you have to show to the consular officer or the immigration service that if the business fails, your funds will be at risk. So, if you’ve already paid the money to the franchisor, then obviously the funds are at risk if the business fails. But the way to make the funds contingent is what’s called using an escrow agreement as a tool to commit the funds.
Escrow Agreement
You would have an agreement with the franchisor and it would say that as soon as…you’ll hold the money in what’s called an escrow bank account for the cost of the investment into the franchise. And as soon as the visa would be approved, the escrow agreement would call for the money to be automatically transferred to the franchisor and if the visa were denied, then the money would be refunded back to you, the investor.
An escrow agreement is an excellent way to still have the funds at risk, but to protect yourself from a visa denial. And in addition to the actual purchase price of the franchise which goes towards the investment, you can keep funds in a bank account for expenses related to starting the franchise because, you know, every franchise you’re going to have to have some money that you have to invest in in addition to the franchise fee. You know, you might need to buy equipment, you might need to have a lease, you’re gonna need to do marketing, whatever it is.
Possess and control the funds
if you have a certain amount of funds set aside in the company bank account, then those funds would count towards being at risk funds and you could also pre-pay rent and that would also count as at risk fund. And, you know, the franchise business, you have to show the consular officer that as soon as you get the visa, it’s ready to open, that you’re gonna be able to come to the U.S. and hit the ground running and start the business right away. And that would always be the case with a franchise.
The next major point is that you have to improve the investment and the source of funds. So, the first thing is you have to possess and control the funds, you have to show that the funds, you know, they’re coming from your bank statements. There’s gonna be a wire transfer probably into the escrow account and all of the money has to be available.
Legitimate sources
The second thing is you have to prove that the funds come from legitimate sources. In other words, you’re not getting the funds for the investment through drug dealing, or an arm sale, or robbing a bank, or anything like that. So, you have to show where the funds come from. So, you know, in most cases the funds are coming from your career earnings, through your job, and your investments and savings. As a client, you could also get the funds through a gift, through an inheritance, through selling property, through having a mortgage, you know, or a loan on your property, etc. And, you know, you have to basically show the records of where the funds came from.
Also you have to show immigration the tax return from your job, your payroll record, your earning statements, your investment statements, you know, if you had an inheritance the estate documents, things like that. So, it’s just a matter of being very well-documented. You know, that’s extremely important in all aspects of E-2 cases is to be well-documented about where your funds are coming from and the nature of the business that you’re purchasing. You wanna, you know, create a very well-prepared application, and that’s the role of an immigration lawyer in helping you do that. So that, you know, the consular officer, all the Is are dotted and all the Ts are crossed before you walk in to that interview.
Develop and direct the Business
The next main point is you have to develop and direct the business. And, you know, there’s really…there’s two ways to do that and the first is that you’re owning at least 50% of the business. And this is usually always the case with a franchise and in most cases, with a franchise, you’re owning 100% of the business. If you don’t have at least 50% ownership, you have to have managerial control. But, you know, again, you’re gonna own 50% of the business at least. And in most cases, with franchises, you’re gonna own 100% of the business.
And from a legal standpoint, you’re not going to wanna own the business in your own name, you’re going to wanna form a U.S. corporation and then you will own 100% of the corporation. And the corporation will then enter into the agreement with the franchisor. And this provides liability protection, so that you’re not gonna be personally liable in case, you know, if you own a store and somebody slips and falls and gets hurt, then, you know, they could only go after the assets of the business and not you personally. So, having a corporation purchase the franchise is a good way to provide liability protection.
Managerial Skills
It’s helpful to have managerial skills when applying for the E-2 visa. It’s not absolutely necessary, you know, anybody with any background can qualify for an E-2 visa. But again, if you have some managerial skills that, you know, it’s helpful to show the consular officer that you’re in a position to develop and direct the business. When you’re in E-2 status you can only work for the E-2 business, you’re not allowed to work anywhere else. But your derivative or spouse can obtain an open market work authorization, which is called an EAD. And your spouse can then work anywhere.
Investment more than marginal
This is a really important part of E-2 visas, the next main header, which is that the investment must be more than marginal. And this is, you know, one of the main reasons why E-2 visa cases may be denied. And what this means is that you have to earn more than just enough income for you and your family.
There’s no real way to know what that means, you know, there’s no definition of it. It’s just you kind of know it when you see it. If you’re gonna be having a business and you’re only projected to earn a salary of $15,000 to $20,000 a year, you’re probably not gonna get the E-2 visa because that’s not providing for more than just an income for you or your family. So, the business has to generate more than enough income to support you. And, you know, when you’re buying a franchise, you know, there’s projections of the finances, the growth of the franchise, etc., and they have a history of how other franchises performed, and you would show all of that information to the consular officer.
Contribution to the community
Another way to prove that your investment is more than marginal is that the business has the ability to make a significant economic contribution to the community within five years. But again, you know, you’re gonna have the highest chance of approval if you show that the business is generating more than enough income to support you and your family. So, every E-2 visa application has to be accompanied by a business plan with five-year financial prediction.
And, our law firm works closely with a E-2 visa business plan writer and, you know, the business plan talks about the franchise, it talks about what you’re gonna do to run it and grow it. And then it talks about your salary, your financial projections, job growth, etc. So, you know, if I could say, what’s the number one most important part of an E-2 visa application is the business plan.
Hire U.S. Workers
You don’t have to hire U.S. workers initially. But, you know, you have to have employees and projected employee growth. And that’s a major consideration in an E-2 visa application and a plan to hire U.S. employees to show the business is more than marginal. Again, the consular officer wants to see your business plan, they wanna see growth, they wanna see that you’re gonna hire U.S. workers. If there’s no plan to hire anybody and to grow the business, you’re probably not gonna get the visa.
You know, that’s one of the things that is important to the Trump administration, there’s this memo called Buy American, Hire American. So, if you can show that you’re going to, you know, employ U.S. workers, then, you know, that’s almost a must, at this point in order to show the investment is going to be more than marginal. And, you know, during the course of the initial period of stay, you wanna be able to maintain financial records of the business, because when you have to go back for the renewal you wanna show the consular officer that the business plan you gave them has actually been followed through on, that, you know, you’re not in the same place you were when you first started the franchise.
The problem of bringing your own workers
In any event, to run a franchise business you’re going to need employees anyways, so that’s not something that you usually do by yourself. As an E-2 investor, you can bring employees of nationals of your home country to work for the business and they have to be in an executive or a supervisory role or they have to possess what’s called specialized skills. And generally, those are our short term specialized skills. If you’re looking to just bring in all employees of your home country and no U.S. workers, that’s not going to sit well with the consular officers, there’s certainly a role for employees of the same nationality if necessary but, you also want to keep in mind U.S. worker employment.
Logistics of applying for E-2 status
What’s the logistics of applying for E-2 status? It’s strongly recommended that you apply at the U.S. Embassy abroad to obtain an E-2 visa and any dependent visa. So, again, you can apply from the embassy abroad or you can apply if you’re already in the U.S. and another status. But the strong recommendation is that you apply for this at the embassy abroad. It’s best to apply in your home country, but you don’t have to apply in your home country. You know, for example, I had somebody who was a citizen of the U.K. and the wait time to get the visa interview in the U.K. was longer than this person wanted to wait for. So, they went to Belgium and applied for the visa there. And it was not a problem.
The interview
And again, the procedure and processing time depends on the embassy, it’s usually a few weeks, you know, each embassy has their own procedures to apply for the E-2 visa, the documents they want, the order they want them in, how you get them the application package, and this is all set forth in the website of each embassy and, you know, normally you’re sending the entire E-2 visa application to the embassy before you go for the interview and they’ve had the opportunity to look it over. And, you know, the main advice I give people when they go to the interview itself is two things. Number one, be completely honest at all times. And, you know, just know the details of your application.
Everything about the business, the franchise, the business plan, you should know it inside out when you walk in to that interview. So, you can apply for a visa in the U.S., but there’s a lot of factors that go into that. There’s a new rule under the Trump administration, it’s called the 90-day rule where if you enter into the United States in one status, you should not do anything contrary to that status within 90 days of your entry.
Whether you’re coming into the U.S. as a visitor, for example, I would wanna wait at least 90 days after your entry before applying to change status. But, you know, if you’re gonna apply in the U.S. and you need to travel then when you travel, you’re gonna need to apply for a whole brand new application at the U.S. Embassy anyway to obtain a visa.
Apply at the U.S. Embassy
For that reason, you know, it usually makes a lot of sense to just apply for the visa initially at the U.S. Embassy, there’s a lot of pitfalls that can come your way, if you try and apply for a change of status in the U.S. Again, it’s possible, it’s really client specific as to whether to do that or not. But the recommendation is to apply at the embassy. And if you are applying in the U.S., you can use something called premium processing so your case is decided in 15 days or less. And that would be recommended if you were applying in the U.S. because otherwise it can take a few months.
If you remember earlier I said the visa is the travel pass, and then your status is governed in the U.S. by an I-94 card. So, every time you enter the U.S., you’re given a new two years of status in the I-94 card. So, you know, if you’re traveling frequently, and you have a five-year multiple entry visa, every time you come in, you’re gonna get two new years of status until your visa runs out and then you have to apply for a new visa.
Monitor your status
In addition, you would want to monitor your status, you know, you absolutely cannot let that I-94 card expire and, you know, to get an extension you can either apply at the U.S. Embassy or if you didn’t need a visa then you could apply for an extension of status for another two years from within the United States. It’s certainly okay to visit the U.S. beforehand to investigate the prospective business, you know, you could come into the U.S. as a visitor, you could, you know, look at locations for your franchise, you could, you know, meet with the franchisor if possible…possibly, so, you know, that’s perfectly fine to come and investigate the business.
And, you know, you can’t appeal a denial of an E-2 visa, but you can resubmit it. So, if the consular officer said you know, “Hey, you know, I didn’t really think that the business plan was detailed enough then,” or that, you know, “I want more information about the financials of the franchise,” then you could resubmit the application with what the consular officer was looking for.
Professionals that you need in you E-2 Visa process
There’s essentially four professionals that you need to assist with the E-2 visa process. The first one is Visa Franchise to help you find the franchise.
The second is a corporate lawyer and the corporate lawyer assists with incorporating the business that you’re gonna have in the United States to purchase the franchise, and that might be set up as an LLC, it might be set up as an S corporation, that really would depend on the state you’re living in and, you know, the nature of the business and that’s what the corporate lawyer helps to do. A
Then the corporate lawyer reviews the franchise agreement and, you know, drafts the escrow agreement for the investment funds. And then, you know, you need an immigration lawyer and, you know, what I tell people as my role is kind of the quarterback of the process.
I am the liaison with Visa Franchise, I liaison with the corporate lawyer, I liaison with the business plan writer. I make your that everything is done properly. And then I, you know, provide you advice on what documents you need and, you know, give you guidance on the business plan and, you know, how to present the case and then I will actually draft the entire application package and supporting documents and then submit it to the embassy.
And then the fourth professional that you need is a business plan writer, and again, we normally work with the company called JDC Consultancy, I’ve been working with them for many years and, you know, I think they do an amazing job in putting together a business plan.
Contact Brian
That is an overview of the E-2 process, and my website is click4immigration.com. You can find out more information about me on that website, my email is there also which is, bgetson@getsonimmigration.com. And, if you have any questions legally about an E-2 visa, feel free to either call or email. I’m gonna turn it back over to Patrick.
Patrick: Hello, this is Patrick Findaro. I’m the business development director with Visa Franchise. Thanks again Brian, Elizabeth, for commencing the presentation today. So Brian already went through the investor visa focus on the E-2 Visa, so which the majority of our clients apply for. Let’s talk a little bit about Visa Franchise, the US franchise opportunities, why we believe that investing franchises is the best opportunity for the majority of our nationals. And then criteria when evaluating businesses and a little bit more about our process and how we work.
If you want to watch the rest of the webinar, please visit the video on Visa Franchise’s Youtube channel by clicking here.
