The article discusses E-2 visa for Airbnb vacation rental business model. The short-term vacation rental business is a growing and very popular business in South Florida.
With the work from home model here to stay after the COVID-19 pandemic, more US workers have the flexibility to travel not just on weekends and holidays but also during regular workdays.
While some workers are required to come in the office 2 to 3 days a week, that still leaves them plenty of time for short domestic trips. This creates favorable conditions for the short-term vacation rental business as an alternative to more expensive hotels. Therefore, there is no wonder why not only US investors, but also foreign investors and entrepreneurs want to enter the short-term vacation rental market in the USA.
To do that, foreign investors and entrepreneurs who wish to manage their business actively from US territory need an appropriate visa. The most popular option for foreign investors and entrepreneurs is the E-2 Treaty Investor visa.
What is short-term vacation rental business?
The short-term vacation rental business involves the purchase of a single or multiple residential properties which are then listed on various marketplaces such as Airbnb, Booking.com, Vrbo or Expedia. The listing features pictures of the property, lists its amenities, and specifies the minimum stay, the price per night and other fees.
Owners are typically responsible for cleaning and maintenance in order to keep the property in guest-ready condition. Most owners usually use subcontractors to perform these functions, such as property management companies, pool cleaning services and landscaping companies.
What is E-2 Visa?
The E-2 Investor Visa is a non-immigrant visa for individuals who make a substantial investment in a US commercial enterprise. The E-2 Visa allows a national of a treaty country to temporary come to the United States together with their spouses and children to live and work. To learn more, visit our E-2 visa page.
What are the basic requirements for an E-2 Visa?
In order to qualify for an E-2 Visa, the applicant must meet the following requirements:
- The investor is a citizen of one of the E2 Treaty Countries
- The investor has invested or is in the process of investing in a US business
- The business is real and operating
- The investment is substantial
- The business is not marginal
- The applicant is in a position to develop and direct the business
- The applicant intends to depart the United States when the E2 status ends
Does an Airbnb business meet the E-2 Visa requirements?
There are two main issues with an Airbnb short-term vacation rental business meeting the requirements for an E-2 Visa.
The first issue is that in order to qualify for an E-2, the business in which the investor has invested must be real and operating.
If the investor only hires subcontractors, including a property management company to coordinate the cleaning and maintenance, the business may be considered passive and may not qualify for an E-2 Visa.
The investor can overcome this by performing most of the services required to run the Airbnb business in house by hiring staff on payroll. Such staff could be cleaners, a handyman, a property manager, an electrician, a plumber, accountant, an administrative assistant and others.
The second issue that an Airbnb short-term vacation rental business must overcome is to prove to US immigration officers that the business is not marginal.
Marginal business is a business that will only have the capacity to provide a living income for the investor and his family. Rather, the investor must demonstrate that the business will benefit more than just himself and his family and therefore contribute to the US economy.
The issue with the Airbnb vacation rental business is that income per property is limited by the days in a calendar year that the property could be rented. This issue can be overcome by purchasing numerous properties but that makes the solution very costly. For example, 1-bedroom apartments in Miami, Florida start at $300,000 in popular and desirable neighborhoods. Purchasing a number of those would require significant capital, even if mortgage financing is used.
In short, an E-2 Visa is possible for an Airbnb short-term vacation rental business. However, it will require an investment far above the customary $100,000 to $300,000 investment made to get an E-2 Visa.
What are my options if I still want an Airbnb business in USA?
One option to overcome the burdens imposed by the real and operating, and marginality requirements, is to purchase or otherwise invest in a business that provides services to short-term vacation rental business. That could be a property management company, a cleaning service, landscaping, pool cleaning or other.
Based on individual circumstances, other options may be available for E-2 visa for Airbnb vacation rental business model.
If you are interested in applying for an E-2 Visa and running a short-term vacation rental business in the US, contact us or directly book a consultation with our experienced E-2 visa lawyers in Miami, Florida USA.
Malescu Law P.A. – Business & Immigration Lawyers