Between paperwork, interviews, and investment data, it can look quite an intimidating process. However, as with most things that seem scary and complicated, you can ease your burden by talking to experts and to people who have already gone through the process!
In a recent episode of The Global Talk, we spoke with McKenzie Powell, Operations Manager at Strive, a recruitment business headquartered in Manchester. McKenzie has successfully set Strive up stateside by navigating the complexities associated with expanding to the US, including leading the E2 visa application process for their employees.
What is an E2 Visa?
The E2 visa is an investor visa that enables a national of a treaty country to be admitted to the US. It is a non-immigrant visa, which means that it is issued to foreign nationals seeking to enter the US temporarily. Those who are approved for an E2 Visa are allowed to establish or invest their money in a U.S.-based business. The E2 is one of the most common types of visas we witness among our international clients when they are looking to expand their business to the US.
How long can you stay in the US with an E2 Visa?
For UK citizens, the E2 visa can be granted for up to 5 years and allows recipients to exit and re-enter the US multiple times. Extension requests can be granted in increments of up to two years each, with no maximum limit. E2 visa holders can bring their spouse and children to the US.
Can I Renew or Extend an E2 Visa?
There are no limits on the number of times an E2 visa can be renewed or extended. However, each country of citizenship has its own visa terms and conditions. To request your E2 visa to be renewed or extended, you must display that you will continue to meet the E2 criteria and requirements. To ensure you have met these requirements, an immigration official will review your case. To apply for an E2 visa renewal, you must complete an online Form DS-160 with the Department of State.
To renew your E2 Visa, you must provide the following:
- Completed Form DS-160
- Proof of profit and loss statements
- Proof of business viability
- Other supporting documents
To extend your E2 visa, you must provide the following:
- Completed Form I-539
- I-94
- I-797 (only if you have extended your E2 visa previously)
- Copy of your passport
- Proof of a physical US presence
- Proof of personal and business tax returns (over the last 2 years)
- Proof that you have maintained your non-immigrant status
Requirements For E2 Visa
To be eligible for an E2 visa, you need to show:
You are a national of a country that has a US Treaty. There are currently 70+ countries that are part of the US Treaty, including the UK.
You are in the process of making a substantial investment in the US economy.
You own or have control of at least 50% of the business.
The E2 Visa Process
1. Immigration Lawyers
One of the first stages is to select an immigration lawyer. With multiple immigration lawyers available, engaging in conversations with a few can help you gauge who would be the best partner to align with your business goals and aspirations.
McKenzie said, “We spoke to three different immigration lawyers that were recommended to us, and we were able to get a feel for who would be best to partner with.”
2. Find a Tax Accountant
US accountants offer a strong support mechanism to ensure your business remains compliant. By engaging an accountant who understands the tax treaties between the UK and the US, companies in the UK can make the process of expanding to the US as tax-efficient as possible.
McKenzie says, “We selected our US accountant before starting the E2 visa application. He was just so knowledgeable and informative. We ensured that we were taking the right necessary steps for the IRS, as US legal compliance can be a bit of a minefield for UK companies.”
3. Set up a US Entity
The next step involves setting up a US entity. This is where your business is officially registered, but not necessarily your primary operations base.
For example, setting up your business in Delaware allows you to register to do business further down the line in another state of your choice. Over 50% of publicly traded companies in the US choose to incorporate their business in Delaware, due to their state’s laws and tax regulations.
McKenzie said, “We set up an entity in Delaware, and although we’re not based in Delaware, when speaking to people, it’s very commonly known that Delaware is a very UK law-friendly state.”
4. Apply for an EIN
An EIN is also referred to as a Federal Tax ID Number. This unique number, which is issued by the federal government, is used by the IRS to quickly and easily identify each business for tax purposes.
Make sure you leave enough time to apply for an EIN, as the lead time can fluctuate. In the recent podcast, McKenzie said, “That caused a bit of an issue for us because the lead time on that is meant to be six weeks; it ended up taking 13 weeks to come through from the IRS.”
5. Open a US Bank Account from the UK
Opening a US bank account from the UK eliminates the exchange fees that are associated. The processes of the financial sector in the US may come as a surprise to UK businesses, with many perceiving it as not as up-to-date as financial systems in the UK.
McKenzie states that she had to use fax communication with the IRS, in addition to many banks requiring a signature on paper when opening an account. This is further reflected in many US clients opting to pay businesses using cheques.
“A lot of the big banks aren’t interested in UK businesses. You usually need a presence in the US, some form of trading history, but we used a recommendation from our accountant, and so we were able to set up one very shortly after we got the EIN.”
6. Create a US Business Plan
Creating a separate business plan for the US market is important as the audiences, customer behaviours, and overall markets are completely different. As well as behavioural factors, legal aspects, including budgets and tax regulations, all account for within the business plan. McKenzie states that Strive was able to engage with a third party to help them detail their business plan as part of the E2 visa application.
“Alongside all of that, you’ve got all the documentation you need to have your accounts ready from the UK, company organisation charts, what it looks like in the UK, what it looks like in the US. How the US company is owned.”
7. Track your E2 Visa Investment
As part of the E2 visa process, companies must demonstrate a sizeable investment in their US business. Although there is no mandatory minimum requirement or target total for businesses to reach to guarantee a successful application, it is not uncommon for businesses to invest anything from $50,000 to $100,000 as part of their application. As a result, you must track your investment throughout.
At Workwell Global, we recommend that founders at the very beginning stages of accessing the US market track any revenue raised on a state-by-state basis. Since any spend generated as part of the US business will count towards the investment required for the E2 visa.
What To Be Aware Of Before Applying For An E2 Visa?
Conduct Initial Research
Conducting industry research, reviewing your business goals, and aligning your objectives will help you begin your research project. Depending on your business size, tax regulations (state-dependent), different state employment laws, and cultural differences in the US compared to the UK, considering all these factors will make a difference.
McKenzie at Strive said, “We ended up doing a three-month research project on where we should locate, which was just fundamental in choosing the state we set up in.”
Check the E2 Visa Processing Time
While the E2 Visa research can take some time, so can applying for one. According to NNU Immigration, the review process that is undertaken by the E-Visa Unit for the UK can take as long as 60 days. When this has been completed, you will be told to attend a US Embassy interview within a 90-day timeframe. However, depending on when everything gets approved, the overall process can take as long as 10-11 months.
Beware of Delays
When applying for an E2 Visa, you may experience some delays. Across certain holidays within the US, this may slow down the process, which is essentially out of your control. However, other factors, including missing information or documents, could delay a successful application.
Choosing a US Location To Set Up In
There are lots of states to choose from when doing business in the US. Following the below criteria of what is important before choosing a location to set up in can help you decide on a state with best suits your business goals and objectives. These include:
- Availability of local talent pools of local
- Cost of living for UK expats
- Lifestyle
- Business taxes
- Travel time from the UK
- Time zones
- Client base
Entering the U.S. Market: Steps to Get Started
Strive made the choice of opening an office in Tampa, Florida. We are witnessing Tampa emerging as a real business hotspot and becoming one of the top US tech cities. We previously discussed why we believe Tampa is one of the best places to start a business in Florida.
“After completing the research, three cities stood out: Tampa, Charlotte, and Austin. You want the team that you send over to the US to be happy and thrive from both a career perspective and a life perspective. If they’re not happy, ultimately, it’s going to reflect and performance for the business as well.”
E2 Visa Key Takeaways
Build a US Team
At Workwell Global, we advise our clients entering the US market for the first time, to build a US local team. It is important to take the culture and identify of your UK company and use that to build your American business, then bring in American talent.
Research Is Your Foundation
One key learning McKenzie shared if she could do it all over again is to carry out more research on the location after it has been chosen. Mckenzie said,
“Research into every single element, especially where you going to base yourself and where you're going to be asking people to come into the office on a daily basis.”
Network With Others
Based on McKenzie's advice, she said,
“One of the key learnings is to network and speak to people. Speak to recruitment companies who have done it before - I could not recommend it more!”
What Is The Difference Between An E2 Visa and an H1B Visa?
An E2 is an employer-sponsored visa that is often used to relocate employees to a company that is going to reside and operate in the United States. Whereas an H1B visa enables US employers to employ workers temporarily. Both visas are issued to foreign nationals; H1B to those who have been offered a job in the US, and E2 to those who are making a significant investment in a US business.
Ready to Enter the US Market?
Workwell Global has three decades of experience helping international companies, specifically recruitment agencies, hire talent; whoever and wherever in the US as an Employer of Record. Begin your US expansion journey and book a call with one of our employment experts today.
Disclaimer: The information provided here does not, and is not intended to, constitute legal or accountancy advice. Instead, the information and content available are for general informational purposes only.