Using profits from a foreign company or borrowing against personal assets can be effective ways to fund an E-2 investment. The key is that the money must become the investor’s personal capital before it is invested into the U.S. enterprise. This ensures the investor meets the E-2 requirement of personal possession and control of the funds immediately before the investment.
Understanding the basics: E-2 investment and source of funds
The E-2 visa allows eligible treaty nationals to enter the United States to direct and develop a business in which they have invested substantial personal capital. The investment must be at risk and derived from lawful sources. Consular officers and USCIS adjudicators will examine how the investor obtained the funds, how they took personal control of those funds, and how the funds were placed at risk in the U.S. enterprise.
Because the E-2 rules focus heavily on the investor’s personal capital and the path of the funds, the structure of the transfer matters, not just the amount invested.
Retained earnings and personal loans secured by personal assets
Retained earnings are the accumulated profits of a foreign company. Many entrepreneurs build significant retained earnings over years of business activity. These earnings can be used for an E-2 investment, but only after they have been properly transferred from the foreign company to the investor personally.
Similarly, a personal loan secured by the investor’s own personal assets can qualify. For example, the foreign company may issue a loan to the investor that is secured by the investor’s personal assets or personal guarantees. Once the investor personally receives the loan proceeds, those funds can then be contributed to the U.S. business as the investor’s personal capital.
Important distinction: shareholder loans do not qualify
A shareholder loan made directly from the foreign company to the U.S. company does not qualify as E-2 investment capital. This is because the investor never takes personal possession or control of the funds. For E-2 purposes, the investor must first receive the funds into their personal account, then personally invest those funds into the U.S. business.
The required flow is:
Foreign company → investor’s personal bank account → U.S. company as a personal capital contribution.
Only this flow satisfies the E-2 requirement that the investor personally owns and controls the capital before placing it at risk in the U.S. enterprise.
Documenting retained earnings as the source of funds
When using retained earnings, the investor must show a clear, well-documented path:
• Corporate financial statements showing accumulated retained earnings
• Corporate tax returns showing profits and tax compliance
• Corporate resolution authorizing the distribution of retained earnings
• Bank statements showing the transfer from the foreign company to the investor’s personal account
• Bank statements showing the investor’s transfer of the funds to the U.S. business account as a capital contribution
If the retained earnings derive from the sale of a prior company or assets, include the sale agreement, closing statement, and evidence that the proceeds were deposited into the company’s account before being distributed to the investor.
Documenting a personal loan sourced from a foreign company
If the investor receives a loan from a foreign company, the documentation must show that the loan is made to the investor personally, not to the U.S. company. The investor must also show that the loan is secured by the investor’s personal assets or personal guarantees.
Useful documentation includes:
• Promissory note showing that the investor is personally the borrower
• Security documents showing the investor’s personal assets or guarantees securing the loan
• Corporate resolution showing the company’s approval to issue a personal loan to the investor
• Bank statements showing funds transferred to the investor’s personal account
• Bank statements showing the investor’s capital contribution into the U.S. enterprise
Once funds enter the investor’s personal account, they are considered under the investor’s direct control. A transfer from that personal account into the U.S. company is treated as a qualifying E-2 investment.
Why the personal account step is important
E-2 regulations require the investment to be the investor’s personal, at risk capital. If funds never pass through the investor’s personal control, adjudicators may determine the investor has not made a personal investment. This applies to situations where:
• a foreign company tries to fund the U.S. business directly
• a shareholder loan is made directly to the U.S. company
• funds move between company accounts without passing through the investor’s hands
Always transfer the funds into the investor’s personal bank account first. This step is essential for E-2 eligibility.
Key immigration risks to avoid
• Direct shareholder loans to the U.S. company. These do not count as personal investment.
• Incomplete documentation of retained earnings or loan authority.
• Transfers that lack clear source-of-funds records.
• Loans that are not secured by the investor’s personal assets.
• Retroactive or informal funding arrangements that do not appear credible.
Strengthening the E-2 investment package
• Maintain a clean, traceable banking trail from source to personal account to U.S. company.
• Prepare corporate resolutions at the time of distribution or loan issuance.
• Keep copies of SWIFT confirmations and bank statements for every transfer.
• Clearly record the capital contribution in the U.S. company’s books.
• Explain the commercial purpose of the investment in the business plan.
• Work with an accountant and immigration attorney to ensure proper tax and legal compliance.
Conclusion
Retained earnings and personal loans secured by the investor’s personal assets can be strong and credible sources of E-2 investment funds. The key is to ensure that the investor takes personal possession of the funds and then personally contributes those funds into the U.S. enterprise as at risk capital. Direct shareholder loans to the U.S. company do not qualify. With proper planning, clean documentation, and a clear flow of funds, these sources can support a successful E-2 visa application.
Please Note: This blog is for informational purposes only and should not be considered legal advice. It is always recommended to consult with an experienced immigration attorney for guidance tailored to your specific situation.