If you're a Canadian citizen interested in investing in property or other business ventures in the U.S., an E-2 visa is not the only way you can do so. However, there are advantages to obtaining an E-2 visa if you can qualify.
The E-2 visa allows people from other countries (including Canada), to enter legally if they are investing substantial capital into the U.S. economy. For Canadian investors who can meet specific qualifications, the E-2 visa has many benefits, including allowing them to freely travel between countries without restrictions on the length or frequency of trips.
An E-2 treaty investor visa enables citizens of countries with which the United States maintains treaties of commerce to buy or start businesses in the U.S. For Canadians, an E-2 visa will be valid for five years and can be renewed for as long as the business remains in operation.
So you’re a Canadian who wants to get in on the super-hot U.S. real estate market. Does that mean you have to move to the States?
No way! Getting a treaty investor visa does not require you to move to the U.S.! You can remain a Canadian taxpayer and resident while managing your business. Getting an E-2 visa is more about giving you options and simplifying business travel to and from the U.S.
For you to qualify for an E-2 visa as a Canadian citizen, you must have “invested” a “substantial amount of capital” in a “bona fide enterprise” in the United States or be actively in the process of making such an investment.
*All of the terms in quotes have a special legal meaning in immigration law, so we’ll define and discuss each of them below.
You also must show that you are only seeking to enter the U.S. to develop and direct the business by proving you own at least 50% of the enterprise or have operational control over the business.
In this context, the term “invested” is defined as placing capital, such as funds or other assets, “at risk” with the goal of earning profit. This means that the capital must already be subject to partial or total loss if the enterprise fails. You can’t qualify for an E-2 if you have only planned to make an investment; you must have already done it.
The law does not set a specific monetary threshold that must be met for your investment to qualify as a “substantial amount of capital.” Instead, it establishes guidelines that look at the proportionality of your investment compared to the entire cost of establishing or purchasing and operating the business. Your investment must also be of a sufficient amount to prove your financial commitment to the business’s success.
A “bona fide enterprise” is defined as a real, active, and operating business that produces services or goods for profit. The condition that businesses be “active” is often the trickiest part for real estate investors. Ordinary buy-and-hold real estate investing won’t meet the qualifications for an E-2 visa, and a simple real estate flipping business probably won’t either. Investment plans involving managing multiple rental properties or consistently buying, selling, renovating, and renting properties are more likely to satisfy this requirement.
So to sum things up, Canadians don’t need an E-2 visa to invest in the U.S., but it can be a valuable thing to have if you plan on running an active real estate investment business in the States. However, it will not be a feasible option if you just want to passively invest in U.S. real estate.
If you want to know the best course of action for your situation, ask a real estate investment attorney for their advice. Even if an E-2 visa does not work for your investment business, there are other options you can pursue that better meet your needs. An experienced professional can help you make the right decision for your investment plan.
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Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
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