For individuals who live in a treaty country and are thinking about starting or acquiring an existing franchise in the United States, one of the first steps is often to apply for an E-2 visa. The E-2 visa is available to foreign nationals who are prepared to invest “a substantial amount of capital” in a U.S.-based business. Due to the benefits that a franchise can offer, many foreign investors choose to pursue a franchise as a means for obtaining an E-2 visa. Here, franchise lawyer Jeffrey M. Goldstein provides an overview of the E-2 visa requirements as well as some other important considerations for buying a franchise in the United States.
Who Qualifies for an E-2 Visa?
The qualifications for obtaining an E-2 visa are available from U.S. Citizenship and Immigration Services (USCIS). E-2 visas are available to foreign citizens lawfully residing both within and outside of the United States, although those who are currently in the U.S. must file a different form (Form I-129) to request a change of status. The basic qualifications for obtaining an E-2 visa to buy a franchise in the U.S. are as follows:
- Being a national of a treaty country;
- Investing “a substantial amount of capital in a bona fide enterprise in the United States;” and,
- Owning at least 50 percent of the franchise and/or having operational control.
What are the Investment Requirements for an E-2 Visa?
U.S. immigration laws do not specify a dollar amount for determining what qualifies a “substantial” investment in a franchise. Instead, when evaluating E-2 visa applications, USCIS considers the following factors:
- Whether the investment is, “[s]ubstantial in relationship to the total cost of either purchasing an established enterprise or establishing a new one;”
- Whether the investment ensures the investor’s “financial commitment to the successful operation of the enterprise;” and,
- Whether the investment is of, “a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise.”
It is also worth noting that purchasing a franchise can help with meeting the requirement to invest in a “bona fide enterprise.” For well-known franchise brands in particular, investing in a franchise can help demonstrate to USCIS that the business is legitimate and meets all other pertinent legal requirements.
What are the Other Steps Involved in Buying a Franchise in the U.S.?
In addition to securing an E-2 visa, buying a franchise in the U.S. involves a thorough due diligence process, and it is necessary to carefully review both the Franchise Disclosure Document (FDD) and the franchise agreement. Our firm offers four tiers of fixed-fee franchise business review packages, and we can help you choose the package that is best suited to your specific needs.
Request a Free Consultation with Franchise Lawyer Jeffrey M. Goldstein
Do you have questions about investing in a franchise in the United States? If so, we encourage you to get in touch. To arrange a free consultation with franchise lawyer Jeffrey M. Goldstein, please call 202-293-2947 or tell us how we can reach you online today.