Consider Franchises you're more popular – maybe it's a local salon, nearby restaurant or home service business. They likely have easily recognizable names and brands that you can imagine without much effort. It's no wonder that 70 of the top 100 franchises are based in the USA.

As a business model, franchising is often synonymous with “local” and “regional” brands because of a 80% of franchises that belong to this category. However, that doesn't mean the franchise doesn't attract aspiring entrepreneurs from around the world. There are actually two visa programs that provide pathways to franchise ownership (and other small business ownership) and legal status in the United States: the E-2 visa and the EB-5 visa.

As a franchise consultant, I have worked with a number of foreign nationals who wish to open a business in the US while gaining legal status, so I immersed myself in learning more about these visa options. I do not provide any legal advice to candidates and those interested in the legal requirements for E-2 and EB-5 visas should consult an attorney.

Let's take a look at both of these visa options to understand what they mean, the basic initial requirements for each, and why they are relatively difficult to obtain.

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Classification E-2

According to US Citizenship and Immigration Services, a E-2 Treaty Investor is a “nonimmigrant classification” that “allows a citizen of a treaty country to be admitted to the United States when investing a substantial amount of capital in a U.S. business.”

General qualifications ABOUT E-2 all include, as noted, being a citizen of a country that has a permanent treaty with the United States. In addition, an individual must invest (or be in the process of investing) a “substantial amount of capital in a bona fide enterprise in the United States,” which includes the total cost of an “established enterprise”—such as a franchise – or the total cost of creating a new enterprise. Finally, the individual must show that they seek to enter the US only to conduct this enterprise. E-2 visa holders are unable to perform any work outside of their approved E-2 interests.

It is important to understand that this option is not a path to a Green Card or US citizenship and requires an investment of time and money to qualify. This type of visa is considered employer sponsored and individuals cannot apply for this visa while outside the United States. Additionally, the E-2 is approved in two-year increase (although applicants may reapply every two years indefinitely) and the classified individual is able to live and work in the United States only as long as their business is operational.

Note: or treaty state is “a country with which the United States maintains a treaty of commerce and navigation, or with which the United States maintains a qualifying international agreement, or which is deemed a qualifying country by legislation.” For a complete list of treaty countries and a history of the dates each treaty was signed, see this website of the US Department of State.

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EB-5 Classification

In the early 1990s, the United States developed the Immigrant Investor Program, which created opportunities for foreign individuals to invest in US-based companies to stimulate the economy. Through this initiative, EB-5 visa was created to allow foreigners who are able to meet the requirements to become business owners in the United States.

Unlike E-2 which is a “non-immigrant classification” and therefore not a path to US citizenship, the EB-5 Immigrant Investor Program is. Because of this, an EB-5 visa is not employer-sponsored, is much more difficult to obtain, and has some strict requirements that few individuals may qualify for.

like Section EB-5 of the US Citizenship and Immigration Services website indicates that individuals “are eligible to apply for lawful permanent residence (become a Green Card holder) if they “can first” make the necessary investment in a commercial enterprise in the United States” which was updated in 2022 to be a minimum of 1.05 million dollars; and second, whether they “plan to create or maintain 10 permanent full-time jobs for skilled American workers.” Basically, these two minimum qualifications involve a large financial investment as well as the creation of jobs within your enterprise.

While there is no fixed limit to the number of EB-5 classifications that can be granted, the average annual number of visa holders is about 10,000.

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As you can imagine, these two visas are not particularly easy for the average foreign investor to qualify for. However, for those who are able to afford the capital investment, there are several options for business ownership. One of these is exclusivity.

Why is franchise ownership a possible option? As a business model, franchising not only has a framework and plan to run a profitable business, but also has the support of a registered parent company. Therefore, a large part of the work preparation and business start-up has already been completed, not to mention the support system of other franchises under the same brand.

Franchising can also be a way to start a business that culturally matches the demand trends for a foreign national who has not spent significant time in the country. It can also be a recognized brand name and business model for the officials who are approving the business for visa purposes.

While franchising is by no means the only option for E-2 and EB-5 visa holders, it is an avenue worth considering for foreign nationals looking for ways to invest in a US business and gain status legal.