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Welcome back to our blog series, Attorneys Ask, We Answer—an initiative designed to address the most frequently asked questions from immigration attorneys across the country. Whether through webinars, presentations, or everyday conversations, we’re constantly fielding questions that shed light on the unique business-related challenges attorneys face in guiding their clients through the visa process. By sharing our insights here, we aim to offer practical, up-to-date business guidance that attorneys can rely on to better support their clients.
Today’s topic centers on a common query we receive: What is considered a “substantial investment” for E-2 visa applicants in the real estate industry, particularly those looking to construct small homes for sale?
Understanding the “Substantial Investment” Requirement
A core requirement for the E-2 visa is that the investor’s capital must be a substantial investment in an active, for-profit enterprise in the U.S. The U.S. Citizenship and Immigration Services (USCIS) and U.S. Consulates assess the investment to ensure it isn’t merely a passive holding but a business that will stimulate economic activity. For real estate ventures, where passive investments are common, it’s essential to present a clear picture of how the investment qualifies as active and substantial.
Avoiding Marginality in Real Estate Investments
One of the biggest challenges for E-2 real estate investors is proving that their enterprise will be more than marginal. A marginal enterprise is one that lacks the future capacity to generate more than enough income to support the investor and their family. USCIS wants to see that the business can create a lasting economic impact—meaning it has the potential for ongoing revenue generation and job creation in the future.
For example, consider an E-2 investor who allocates $400,000 to purchase land and construct two single-family homes with the intent to sell or rent them. For the E-2 visa to be approved, the business plan needs to illustrate how these homes will generate revenue and profits. This could involve estimating the sale prices for each home or projecting rental income if the investor plans to lease the properties. The plan should also detail the anticipated profitability and whether additional projects or developments are on the horizon to ensure continuous income.
Demonstrating Active Investment
In the real estate business, it’s essential to establish that the investor’s role is active, not passive. For USCIS, passive investments, like purchasing a property to hold as an asset, do not qualify for the E-2 visa. Instead, the investor must play an active role in developing or managing the project, such as overseeing construction, marketing the properties for sale or rent, or managing future projects if the initial properties sell.
Key Components for a Real Estate-Based E-2 Business Plan
To support a successful E-2 visa application in the real estate sector, a business plan should address the following:
- Revenue and Profit Projections: Clearly outline the revenue-generating potential of the investment, whether through property sales or rental income. For example, include anticipated sale prices or monthly rental rates, along with any projected increases over time.
- Path to Non-Marginality: Show that the business has a viable path to producing more than a minimal living for the investor and their family. This could mean detailing future developments, expansions, or reinvestments that will drive continued growth and profitability.
- Active Involvement of the Investor: Demonstrate that the investor will be actively engaged in the business operations. Specify the investor’s role in managing the project, including responsibilities like overseeing construction, handling marketing, or managing tenant relations if properties will be rented.
Final Thoughts
Real estate can be a promising avenue for E-2 visa applicants, but it requires careful planning and a well-structured business plan to meet USCIS standards. For real estate investors, a substantial investment means more than just capital—it’s about building an enterprise with real economic impact and the potential for growth.
If you’re an attorney guiding a client through an E-2 application, our team is here to help develop a credible and thorough business plan tailored to USCIS requirements. Contact us today to learn more about how we can support your client’s E-2 real estate venture with a customized plan that meets all the necessary standards for success.
The information provided in this blog is intended solely for informational purposes. While we strive to offer accurate and up-to-date content, it should not be considered legal advice. Immigration laws and regulations are subject to change, and individual circumstances can vary widely. For personalized guidance and legal advice regarding your specific immigration situation, we strongly recommend consulting with a qualified immigration attorney who can provide you with tailored assistance and ensure compliance with current laws and regulations.
Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in four different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital, and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of U.S. and Canadian immigration, SBA loans, and others.
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