E-2 Visa: LLC Formation, Bookkeeping and Tax Planning

E-2 Visa: Launch Your U.S. Business and Improve Your Approval Chances Through Proper LLC Setup, Bookkeeping, and Tax Planning.
Are you considering investing in a business in the United States? The E-2 Visa could be the opportunity you’re looking for.
This visa allows nationals of treaty countries to invest in and actively manage a business in the U.S. Below is a clear overview of the most important aspects you should understand before applying.

Who Is Eligible?

To qualify for an E-2 visa, you must meet the following requirements:

• Be a citizen of a country that maintains a qualifying treaty with the United States (refer to the U.S. Department of State website for the official list).

• Make a substantial investment in a real, operating U.S. business, not in stocks or undeveloped land.

• Ensure that the investment is at risk, meaning the capital could be lost if the business does not succeed.

• Play an active role in managing the business and maintain control over the invested funds.

• Intend to leave the U.S. once the E-2 visa expires, although extensions are available.

What Types of Businesses Qualify?

Most for-profit businesses can qualify, including restaurants, service companies, and technology startups. The essential requirement is to prove that the business:

• Is legitimate and operational

• Has a strong likelihood of success

• Will contribute to job creation in the United States

How Much Investment Is Required?

There is no fixed minimum investment amount. However, the investment must be considered substantial relative to the total cost of purchasing or starting the business.
Generally, lower-cost businesses require a higher percentage of investment.

What Does the Application Process Involve?

The process includes several key steps:

• Establishing a U.S. business

• Registering it as an E-2-eligible entity

• Applying for the visa through a U.S. consulate in your home country

Applicants should expect interviews and extensive documentation requirements.

Can You Bring Employees?

Yes. Employees may be brought to the U.S. provided that they:

• Share the same nationality as the E-2 investor

• Hold essential positions within the business

Bookkeeping: Creating a Strong Financial Foundation

Bookkeeping is the financial language of your business, it organizes daily transactions into a clear and reliable record.
For E-2 visa applicants, proper bookkeeping is especially important for two key reasons:

• Supporting the Visa Application

Well-organized financial records demonstrate that your business is legitimate, stable, and professionally managed, which strengthens your E-2 application.

• Ensuring Long-Term Business Success

Accurate bookkeeping allows you to monitor income, expenses, and profitability, manage cash flow effectively, and make informed financial and tax decisions.

Developing a Chart of Accounts

A solid bookkeeping system starts with a chart of accounts, which categorizes your business’s financial activity.
This chart should be customized based on your specific business model.

For example:

• A restaurant may include accounts for inventory, equipment, and payroll.

• A technology startup may require accounts for software subscriptions and marketing expenses.

Consulting with a professional bookkeeper can help you design a chart of accounts that fits your business needs.

Payroll Setup: Employees and Contractors

As your business expands, you may hire employees or work with independent contractors. Proper payroll setup ensures compliance with U.S. tax regulations and reflects financial responsibility.

• Hiring employees requires withholding income taxes and paying Social Security and other payroll taxes.

• Payments to contractors may require issuing Form 1099 to report compensation.

Using a payroll service or consulting a payroll specialist can help ensure compliance.

LLC Formation and EIN Setup

Although forming an LLC is not mandatory for an E-2 visa, it offers important advantages:

Benefits of an LLC

• Limited liability protection: Separates personal assets from business liabilities.

• Pass-through taxation: Business profits are reported on the owner’s personal tax return, avoiding double taxation.

How to Obtain an EIN as a Foreigner

Step 1: Confirm the Need for an EIN

An EIN is required for opening a U.S. bank account, hiring employees, and filing certain tax returns.

Step 2: Gather Required Information

You will need:

• The legal name and address of the business

• The entity type (LLC, corporation, partnership, etc.)

• The reason for applying for an EIN

You can apply even if you do not have a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).

Step 3: Complete Form SS-4

Download Form SS-4 from the IRS website.
If you do not have an SSN or ITIN, enter “Foreign/None” on line 7b.

Step 4: Submit the Application

You may apply using one of the following methods:

• By Fax:
  U.S.: (855) 215-1627
  Outside the U.S.: (304) 707-9471
  EINs are typically issued within four business days.

• By Mail:
  Internal Revenue Service
  Attn: EIN Operation
  Cincinnati, OH 45999
  Processing time is approximately four weeks.

• By Phone:
  Call (267) 941-1099
  Available Monday through Friday, 6 a.m. to 11 p.m. (Eastern Time).

Step 5: Receive Your EIN

Once approved, you will receive your EIN. Keep this number secure, as it is required for tax filings and official business matters.

Additional Considerations

• Be mindful of time zone differences when contacting the IRS from abroad.

• Ensure that you or a representative is comfortable communicating in English, as IRS services are primarily conducted in English.

• LLC filing and annual fees vary by state. Review your state’s requirements to remain compliant and budget accordingly.

Taxfully

 [email protected]