T
oken-based real estate investments are paving the way for a new generation of global entrepreneurs and investors to immigrate to America. This innovative approach combines blockchain technology with E-2 visas, allowing foreign nationals to invest in U.S. businesses and manage their operations.
Tokenization is the process of converting ownership of real-world assets into blockchain-based tokens, representing fractional equity ownership in a business entity that holds the title to the property. However, the legal framework must be carefully structured to remain compliant with securities and immigration regulations.
U.S. immigration through an E-2 work visa allows citizens of eligible treaty countries to invest in a U.S. business and manage its operations. To qualify for an E-2 visa, the investment must be substantial, the business must be active and for-profit, and the applicant must own at least 50% or have operational control.
Token ownership can meet these criteria if structured properly, allowing foreign investors to contribute lower amounts while still owning a defined percentage of an LLC via tokens. This can expand access to high-value assets like hotels, hospitals, or mixed-use developments.
Securities law considerations are crucial when issuing and selling tokenized real estate offerings. Most tokenized real estate offerings fall under the definition of "securities," requiring compliance with SEC registration requirements or exemptions under Regulation D, Regulation S, or Regulation A+.
To qualify for an E-2 visa, investors must demonstrate substantial managerial involvement in the business, not just financial participation. Token-based real estate ventures must confer decision-making authority through voting rights, board participation, or a managing member role in the LLC.
A step-by-step guide to setting up a tokenized real estate project for an E-2 visa application includes:
1. Identifying a U.S. commercial real estate project that will be actively managed as a business.
2. Forming or joining a Special Purpose Vehicle (SPV) through an LLC or LP formed in the U.S.
3. Acquiring tokenized equity that represents ownership in the SPV.
4. Committing funds irrevocably to the business, ensuring clear documentation.
5. Preparing legal and blockchain documentation, including articles of organization, operating agreements, and proof of token acquisition.
6. Building a strong business plan demonstrating the legitimacy and operational capabilities of the business.
7. Filing the E-2 work visa application with supporting documents.
Token-based real estate and E-2 visas represent a new field that offers advantages such as fractional participation, liquidity, and diversification of investments. For some investors from treaty countries, they provide a modern approach to launching a business and legally living and working in the U.S.
