This legal guide summarizes the eligibility criteria, application process, and considerations for a Canadian Citizen purchasing an existing business in the US
To qualify for an E-2 investor visa, the following eligibility criteria must be met: (1) The US company must be owned at least 50% by nationals of a "treaty country", i.e. a country that currently has a treaty of friendship and commerce with the United States (e.g. Canada through NAFTA); (2) The E-2 visa applicant must possess the same nationality as the US Company's owners; (3) The investor must have made, or must be in the process of making, an investment in an existing or newly established US business; (4) The investment must be substantial. Note that there is no set dollar amount that constitutes the "minimum" amount to qualify as a substantial investment; (5) The investment must be allocated towards an asset or expense associated with the operation of the US company (i.e. investment funds used to purchase the US business); (6) The investment must be "at risk", i.e. irrevocably committed to the US enterprise; (7) The capital used for the investment must have derived from a lawful source; (8) The US company must be a real and active business, i.e. not a passive investment in real estate; (9) The US company must be a non-marginal enterprise; (10) The E-2 visa applicant must either be in a position to direct / develop the enterprise (i.e. the "investor"), OR an employee of the entity who will work in a managerial, executive or essential capacity; and (11) The E-2 visa applicant must possess temporary intent, e.g. no intent to apply for a US green card.
Currently, all E-2 visa applications for new company's are adjudicated at the US Consulate in Toronto. Once the applicant has completed their DS-160 application and paid the visa appointment fee of $205 USD per applicant, an electronic copy of the application support package will be submitted to the US Consulate in Toronto via email. After a Consulate officer has reviewed the electronic submission, the applicant or legal representative will be: (1) notified that the review has been completed; (2) provided a list of any additional documents required; and (3) advised to schedule an appointment for an in-person interview. The E-2 visa applicant will then attend the in-person visa appointment at the US Consulate in Toronto. The Consulate will have authority to either approve or refuse the application during the interview. If further documents are required to make a final decision, these will be requested in a written document handed to the E-2 visa applicant. If the application is approved, the applicant should receive their passport back with E-2 visa stamp in approximately 1 week. For Canadian Citizens, there is a $40 USD Reciprocity fee that will be charged if the visa application is approved. The visa stamp should be valid for a period of 5 years from the date of issuance.
Special considerations for investors purchasing an existing US business
If you have found a business to purchase in the US, note that there is a legitimate method to protect your investment and still qualify for the E-2 visa. As mentioned above, the investment must be "at risk" and "irrevocably committed" to the US enterprise in order to qualify for the E-2 visa.
Nevertheless, the Department of State's Foreign Affairs Manual specifically allows an investor to make their purchase / sale agreement contingent on issuance of the E-2 visa, so long as this is the only condition to be removed at the time of the visa interview. In such case, when the E-2 investor attends the visa interview, the purchase / sale agreement would be signed by both the buyer and seller, subject to the E-2 visa issuance contingency yet to be removed. The funds for the purchase would be in an escrow account, and available to transfer to the seller upon approval of the E-2 visa application. If the E-2 is approved, the funds then transfer from buyer to seller in the US.
However, if the E-2 is denied for any reason, the purchase / sale agreement would become void, as the E-2 visa contingency was not met. The funds in escrow could be transferred back to the buyer, protecting the investor from a situation where they made the investment but were denied the ability to work in the US.
Even though the buyer is able to get the funds from the escrow account back in the above situation, the Department of State's Foreign Affairs Manual specifically states that, "Despite the condition, the purchase would constitute a solid commitment if the assets to be used are held in escrow for release or transfer once the condition is met." Hence, the arrangement satisfies the requirement that the investment must be irrevocably committed to the US enterprise.
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