United States • Europe • Asia
The E-2 Investor Visa allows individuals from approximately 80 countries (and their spouses) to enter and work inside of the United States based on an investment he or she will be controlling while inside the U.S. This visa must generally be renewed every two years, but there is no limit to how many times it can be renewed. There is no defined size of the required investment but it must be "substantial" and at risk, i.e. secured loans do not qualify, and intended to make a profit. E-2 visas are also available to non-investor employees of the business, as long as the persons are of the same nationality as the investor and are destined for a role in the US business that is either executive/supervisory or requires specialized skills that are essential to the efficient operation of the U.S. enterprise. The underlying goal of the E-2 visa program is to create jobs in the United States. For additional details see 9 FAM 402.9.
If the investment involves an acquisition of a majority interest in an existing business in the United States, a business valuation from a certified U.S. valuation professional will often be requested in the E-2 visa process. Similarly if the investment consists of intellectual property such as patents or software which is being contributed into a U.S. business, a valuation report is likely to be required. In all of these cases it is important to demonstrate that there is a significant risk of monetary losses for the investor in order to provide a solid basis for the application.
According to the Foreign Affairs Manual: “Intangible Property Rights to intangible or intellectual property may also be considered capital assets to the extent to which their value can reasonably be determined. Where no market value is available for a copyright or patent, the value of current publishing or manufacturing contracts generated by the asset may be used. If none exist, the opinions of experts in the particular field in question may be submitted for consideration and acceptance.” (9 FAM 41.51 N8.2-3)
When valuing intellectual property such as patents, estimating the potential future income streams from licensing or royalty fees is often a critical step and for this a market size must be demonstrated unless there is an existing licensing or royalty stream. In addition, it is important to provide evidence of the costs incurred to develop the intellectual property. To the extent that the intellectual property will be used directly in commercial activities, its value can be estimated through the Relief From Royalty method or through a Real Options analysis.
Windeye Partners frequetly performs valuations of businesses and intellectual property for the purpose of E-2 investor visa applications. To discuss a potential valuation in connection with such a process please email us at windeye@windeyepartners.com or contact Michael Guthammar on telephone (929) 223-2935.