Franchise Things

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Important timestamps:

  • 00:36 What is an E-2 Visa and how does it compare to the EB-5 Visa?
  • 11:21 Qualifying investments, documents, and individuals
  • 12:44 As a franchisor, how does this process intersect with the normal process of opening a franchise?
  • 24:40 Who can you bring along and are there any specific requirements for said peoples?
  • 28:16 What’s okay prior to the approval of an E-2 Visa?
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Episode #1

FRANCHISE THINGS: Franchising and the E-2 Visa

September 24, 2020

What is an E-2 Visa and how does it compare to the EB-5 Visa?

  • Considered a temporary Investment Visa, the E-2 Visa is very specific in its criteria and is dependent on factors such as the location of the business, the business you can work for, and what position you have.
  • The list of approved countries under the treaties list with the US, does fluctuate, and is worth noting.
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Ownership

  • You must be a citizen of that country and not simply a resident of that country.
  • Being associated predominantly with the financial investment, the Franchisor could seek a foreign investor and have another entity perform the “sweat equity”.
  • Does the entity need prior establishment in that country, like US LLC, to be able to invest in the franchise?
  • It does not have to be a direct investment from a treaty country’s person to a US entity, it may also come from the company entity

Qualifying investments, documents, and individuals

  • Qualifying investments must be traced back to the country of origin.
  • The investment amount should be more dependent on what the business needs to operate as opposed to a specific dollar amount.
  • If the investment is not substantial, you may find yourself and your company under more scrutiny.
  • Understand the risk involved with making this investment as there is no guarantees to you obtaining the E-2 Visa.
  • The Consulate wants to see exactly how you received the funds you plan to invest.

As a franchisor, how does this process intersect with the normal process of opening a franchise?

  • A process or business plan needs to be committed to and moneys invested in the business before the E-2 Visa should be applied for.
  • Be close to or ready to open the doors of your franchise.
  • Much of the work will be done by the Franchisee prospect.
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How can you prospect for things like land for a store front, purchase a warehouse, or equipment for your business?

  • A Visitor’s Work Visa is available for you to take steps to get your business ready.
  • There is a chance you will need a US Guarantor to “vouch” for you as you consider things like leasing buildings or equipment, as this is also a risk for them.

Who can you bring along and are there any specific requirements for said people?

  • Spouses, children, and other dependents may qualify to come without having their own E-2 Visa; however, they will need to apply for what is called a E-2 Dependents Visa if they do not plan to work.
  • An E-2 Work Visa is required for any persons who plan to work under the applied for E-2 Visa.
  • There is no set limit to the number of those who come to the US.
  • Each person must be a citizen of the treaty country and not another.

Practical tips and procedures for applying for an E-2 Investment Visa

  • Healthy advice: Avoid a change of status with the UCIS because if that person ever needs to travel, they will have to prepare and submit to the Consulate office an entirely different application. If travel is necessary, go directly to the Consulate office to apply for the travel Visa to begin working.
  • You do not necessarily need to interact with Immigration services at all.
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What’s okay prior to approval of the E-2 Visa?

  • Money may be given.
  • The franchisee may come in and investigate business opportunities and sign agreements.
  • They may also open US bank accounts.

The tricky question is, what about training?

  • To avoid more risk, there are Training Visas such as a H-3 Travel Visas that may be used for such instances, as you are limited in training that may be done under a work Visa.
  • Virtual training is also an option.
  • A franchisor needs to understand the need for flexibility when trying to open a franchise in a foreign country.
  • Have a contingency plan for if the E-2 Visa approval falls through!
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