[227].png)
An entrepreneur approached Visa Business Plans with $100,000 available to invest in a specialty food distribution company in the United States.
We had already helped him establish his LLC and open his U.S. business bank account, two important steps in getting his company started. He also began researching suppliers and incurred preliminary business expenses.
However, when we discussed his investment strategy, we learned he planned to make most of his larger purchases after receiving his E-2 visa.
He wanted to avoid putting too much money at risk before knowing whether his application would be approved.
From a business owner’s perspective, his caution was understandable. Why commit thousands of dollars to inventory, equipment, and commercial premises before receiving permission to move to the United States?
Unfortunately, that approach presented a significant problem for his E-2 application.
Although he had $100,000 available, most of it was still in his business bank account.
Having money available to invest is not the same as making an E-2 investment.
The Problem With Keeping Most of the Investment in the Bank
One of the fundamental requirements of the E-2 visa is that the investor must have invested, or be actively in the process of investing, a substantial amount of capital in a real and operating commercial enterprise.
The investment must also be at risk in the commercial sense.
Simply transferring personal funds into a U.S. business bank account generally doesn’t satisfy these requirements. The money may be available, but that alone doesn’t establish that it has been committed to the enterprise.
This distinction is particularly important for entrepreneurs who believe that showing a large bank balance will strengthen their application.
In fact, when most of the proposed investment remains uncommitted, it can raise questions about whether the investor has taken sufficient steps to establish the business.
There is also another issue: the business itself must be ready to operate, or sufficiently close to commencing operations.
A company that exists primarily on paper, with an LLC, a bank account, and plans to make purchases after visa approval, may have difficulty demonstrating that it meets the E-2 requirements.
For our client, the challenge was determining how to move forward with the investment in a way that supported both the visa application and the actual launch of his business.
We Started With What the Business Needed to Operate
At Visa Business Plans, we don’t approach this question by asking clients how much more money they can spend.
We start by examining what the business needs to operate.
For our client’s specialty food distribution company, that meant evaluating the practical requirements of importing, storing, marketing, and distributing products to U.S. customers.
Would he need warehouse space or could he initially work with a third-party logistics provider?
What inventory would he need to fulfill his first orders?
Which equipment, technology and systems would be necessary to manage inventory, process orders and coordinate deliveries?
What licenses, insurance and supplier arrangements would need to be in place?
And how much initial marketing would be necessary to begin attracting customers?
These were business questions, but their answers also helped identify expenditures that could potentially support the E-2 investment.
Sometimes the Best Investment Strategy Is to Make Purchases the Business Already Needs
As we developed the startup budget, we identified expenditures our client planned to postpone until after receiving his visa.
For example, he expected to purchase initial inventory once he arrived in the United States.
But if he needed that inventory to begin fulfilling orders, postponing the purchase could leave the company unprepared to operate.
The same reasoning applied to necessary equipment, commercial arrangements, operating systems and other startup expenses.
We could recommend a strategy for making appropriate purchases and commitments before the application, provided those expenditures were commercially justified and consistent with the company’s actual operational needs.
This is an important distinction.
The objective isn’t to spend money just to increase the E-2 investment. It’s to identify expenditures the business genuinely needs and determine whether making those commitments earlier can help establish operational readiness.
In some cases, that may involve purchasing equipment or inventory. In others, it could mean securing premises, engaging necessary service providers or investing in the infrastructure required to begin serving customers.
Of course, not every business expense automatically counts toward an E-2 investment. The nature of the expenditure, the degree to which funds are committed and the supporting documentation must be evaluated carefully with immigration counsel.
The Business Plan Must Reflect a Company That’s Ready to Do Business
Once we identified the operational requirements, we needed to make sure the business plan accurately reflected how the company would launch.
For example, if our client intended to begin distributing specialty foods shortly after approval, his startup budget and financial projections needed to account for the inventory, storage arrangements, operating systems and other resources necessary to make that possible.
We also needed to examine whether the proposed investment was sufficient for the business model.
A distribution company that requires substantial inventory, warehousing and transportation arrangements may have very different startup costs from a consulting company operating with minimal equipment.
There is no universal investment amount that guarantees E-2 eligibility. The substantiality of an investment is evaluated in relation to the cost of establishing or purchasing the particular enterprise, among other considerations.
That makes a realistic startup budget especially important.
At Visa Business Plans, we develop financial projections based on the business’s actual operating requirements, including startup expenditures, expected revenue, staffing needs and ongoing expenses.
If the numbers indicate that the business requires more capital than the investor has available, that needs to be addressed before presenting a plan that assumes the company can operate with insufficient resources.
What About Investors Who Don’t Want to Risk Everything Before Approval?
Our client’s concern about committing funds before receiving his visa was reasonable.
An E-2 investment involves financial risk, and no business plan can guarantee visa approval.
However, attempting to eliminate that risk by keeping nearly all the capital in the bank can undermine the investment case.
Certain arrangements, including appropriately structured escrow agreements, may be relevant in some transactions. Their suitability depends on the circumstances and applicable immigration requirements, so they should be evaluated with qualified immigration counsel.
From our perspective, the priority is to develop an investment and operational strategy that makes commercial sense.
We want clients to understand which expenditures are necessary, when those commitments need to be made and how they fit into the company’s launch.
That allows them to make informed decisions about their capital while coordinating the immigration implications with their attorneys.
An E-2 Investment Should Build a Business, Not Just Support an Application
Our client initially viewed the $100,000 in his bank account as evidence that he had the financial resources to establish his company.
And having adequate capital was certainly important.
But the E-2 application also needed to demonstrate that those resources were being used to establish a real commercial enterprise.
For his specialty food distribution business, that meant moving beyond preliminary planning and identifying the inventory, infrastructure, supplier arrangements and other commitments necessary to begin operations.
At Visa Business Plans, we do much more than prepare financial projections.
We help entrepreneurs establish their U.S. companies, including LLC formation and assistance with opening business bank accounts. We also analyze proposed business models, identify startup requirements, develop realistic budgets and help clients evaluate how to deploy their investment in ways that support the company’s operational needs.
When appropriate, we can recommend a strategy for accelerating necessary business expenditures so the investor can demonstrate meaningful progress toward establishing an operating enterprise.
We coordinate those recommendations with immigration counsel, who determines how particular expenditures and commitments should be treated for E-2 purposes.
The distinction matters because money sitting in a bank account may show financial capacity, but it doesn’t necessarily show that an E-2 business has been established.
For entrepreneurs pursuing an E-2 visa, the investment strategy should be built around what it takes to get the business ready to operate.
That is where thoughtful business planning can make a meaningful difference.
Contact us today to get started
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.
If you are looking for any of the following, we can help you!
EB-5 Visa Business Plans
EB5 Business Plans
L1A Business Plans
L Visa Business Plans
L-1 Visa Business Plans
E2 Business Plans
E2 Visa Business Plans
E1 Business Plans
E1 Visa Business Plans
Business Plan for Investor Visa
Business Plans for Immigration and Visa Purposes
Business Plan for Visa Application
Market Analysis
Feasibility Studies
Investor Visas Business Plans
NIW Business Plans
NIW Personal Endeavor Plan
NIW Personal Statement
EB-2 Visa Business Plans
Visa Business Plans
[131].png)
[225].png)