The article discusses E2 visa for software company. Before going into the particularities of E2 visa for a software company, we briefly discuss the general requirements for E2 visa.
The E2 visa is a nonimmigrant visa which allows investors and entrepreneurs who make a substantial investment in a US business to come live in the US and develop their business. E-2 visa is only available for investors from countries that have a treaty of commerce and navigation with the US, hence its name E-2 Treaty Investor Visa. To learn more about the requirements visit our E2 visa page.
If you are not a national of an E2 treaty country, you may be able to first obtain another citizenship through investment from a country that has an E2 treaty, for example Grenada. For more information visit our page on E-2 with Grenada citizenship.
Immediate family members, spouses and children under 21, can accompany the E2 investor. The visa can be renewed indefinitely as long as the investor meets the conditions for the E2 visa. To learn more about spouses of E2 visa holder visit our page.
E2 Visa for Software Company
Entrepreneurs and investors who have the means to invest in a US business often wonder what is the best business to qualify for an E2 visa? In our experience the best business for an E2 visa is the one the investor has experience in.
Since the software industry has been a major driver for the creation of wealth, both in the US and abroad, we find that many potential E2 investors have experience developing and/or selling software products.
How to get an E-2 visa for a software company?
A. Purchasing an existing business
One option is to purchase a fully operational software company, with employees, existing clients and vendors. This option requires the least work on the part of the investor, but it comes with its own set of problems and challenges.
The main challenge will be the price of the business. If the company is profitable and without major issues the seller will want to get paid accordingly. Software companies typically sell for 3 to 5 times revenue, which means a company with an annual revenue of $200,000 could sell from $600,000 to $1 million.
Other challenges include retaining key employees, non-compete agreements with employees and the seller, contracts with clients and vendors that are expiring and need to be renegotiated, or licensing agreements with clients for the use software that will lead to a significant revenue reduction upon expiration.
B. Starting a new software company
A second option is to start a software company in the United States.
E2 visa regulations require that the investor seeking an E2 visa has invested or is in the process of making a substantial investment in a US business. This does not mean that entire investment funds must be spent before applying for the visa.
The investor must spend enough money to ensure that the software company can start operations upon receiving the E2 visa, while maintaining sufficient cash as working capital in the business account. The lower the investment amount, the more the investor needs to spend upfront to get the E2 visa approved.
In terms of spending the E2 investment funds, the software business presents its own challenges. This is because a software business requires mostly human capital and does not require much in terms of upfront investment.
Some of the upfront investments that will be recognized for E2 visa purposes include equipment, such as computers, servers and printers, professional services, costs of setting up the company, as well as any initial payments for renting an office, first, last month rent and deposit.
However, most of the costs for a software company are ongoing. That includes employee salaries, a very large expense item for software companies. Other ongoing costs are associated with acquiring new clients, such as marketing and advertising expenses.
E2 investors who choose to start a software company can hire staff and start marketing the company prior to sending their E2 visa application. That may show US consular officers that a higher proportion of the E2 investment capital has been spent, strong commitment on part of the investor and a greater probability that the business venture will succeed.
Hiring US software development staff can be problematic during the initial stages of the business because of the high salary requirements and scarcity of such specialists. It may be prudent to start with hiring marketing and sales staff first, such as business development specialists.
How much money do I need to get an E-2 visa for a software company?
For an E2 visa for software company the money you need depends on the software product or service being offered. and your business model. For a company that offers custom-build solutions for small businesses $100,000 to $200,000 may be enough, although some cases may be approved with less.
Companies that are building complex software with a long development cycle may need to invest more capital to get them through until they start generating revenue.
Malescu Law can assist with E2 visa for software company
If you an investor, entrepreneur or software engineer looking to start a software company and get an E-2 visa for the US, contact us or book a consultation with one of our E2 visa lawyers in Miami, Florida USA.
Malescu Law P.A. – Business & Immigration Lawyers
