For Spanish nationals investing in a US business on an E-2 visa
E-2 Investors From Spain: Tax on the Business, the Investment and You
Investing in a US business from Spain on an E-2? The visa is about immigration, but the tax questions start the day you fund the company: which entity, how the money goes in, and when the US starts taxing you on everything.
Quick answer
Is an E-2 investor from Spain a US tax resident?
Usually yes, once living in the US for most of the year. E-2 is not an exempt-individual category under IRS Pub 519, so your days count under the substantial presence test, and a resident is taxed on worldwide income. If Spain also treats you as resident, Article 4 (Residence) of the treaty breaks the tie. Your company files its own returns: Form 1120, and Form 5472 while it is foreign-owned.
At a glance
- E-2 treaty with Spain
- In force since April 14, 1903 (State Department)
- Company
- US corporation (Form 1120) or LLC; Form 5472 while foreign-owned
- Your tax residence
- Substantial presence test; E-2 days are not excluded
- Treaty tie-breaker
- Article 4 (Residence)
- Social security agreement
- Yes, since April 1, 1988
What USCIS looks for
| E-2 condition (USCIS) | In short |
|---|---|
| Nationality | You must be a national of a treaty country; Spain's E-2 treaty has been in force since April 14, 1903 (State Department) |
| Substantial investment | Capital at risk in a bona fide enterprise; no fixed minimum, judged against the cost of the business |
| Not marginal | The business must be able to earn more than a minimal living for the investor and family |
| Develop and direct | At least 50% ownership or operational control |
| Stay | Up to two years at a time, with extensions in increments of up to two years |
Sources: State Department treaty countries, USCIS E-2 page.
Immigration questions belong with your immigration lawyer. We handle the tax side: the company, the money you put in, and your own US returns.
Which entity, which filings
| Choice | Yearly federal filing | Source |
|---|---|---|
| US corporation | Form 1120; plus Form 5472 while 25% or more is owned by a foreign person | IRS, IRS |
| Single-member LLC | Disregarded by default; Form 5472 with a pro forma 1120 while the owner is a foreign person | IRS |
| LLC with two or more owners | Partnership by default (Treas. Reg. 301.7701-3): Form 1065 | IRS |
| Any new US business set up by a foreign person | BE-13, generally within 45 days | BEA rule |
Funding the business
Before you wire money from Spain, decide whether it is equity or a loan and record it that way. While a foreign person owns the company, loans from the owner and interest paid on them are related-party items for Form 5472 (IRS). Clean records also help with the E-2 file, which your immigration lawyer manages.
Ongoing US filings for an investor from Spain
- Once you are a US resident you are no longer a foreign person for Form 5472, which the IRS defines as an individual who is not a citizen or resident (IRS). Whether the company still files depends on who else owns it.
- Form 1040 on worldwide income every year you are resident, including income from Spain.
- FBAR and Form 8938 for accounts you keep in Spain; see FBAR and FATCA and Form 8938.
- Form 5471 if you keep control of a company in Spain: a US person controlling more than 50% of a foreign corporation is a Category 4 filer, with a US$10,000 penalty per year for not filing (IRS). See Form 5471.
- Funds held in Spain can be PFICs; see PFIC and Form 8621 for how the rules work.
Residence clarity for E-2 investors
| Question | Answer for an E-2 investor from Spain |
|---|---|
| Are E-2 days excluded? | No. E-2 is not an exempt-individual category in IRS Pub 519 |
| When do I become a US tax resident? | When you meet the substantial presence test (31 days this year, 183 weighted days over 3 years), usually in your first full year |
| The first year | Usually dual-status: nonresident before the residency starting date, resident after |
| Resident in both countries? | Article 4 (Residence) of the treaty decides; Form 8833 discloses the position |
| Social security | Agreement in force since April 1, 1988 |
Sources: IRS Pub 519, Form 8833, SSA.
Taking money out before you are resident
While you still live in Spain, dividends and interest from your US company are not reported on a US return the usual way: the company withholds, at 30% unless the treaty gives a lower rate (IRS Pub 515).
| Payment to a resident of Spain | General treaty rate (IRS Table 1) | Treaty citation |
|---|---|---|
| Dividends from a US corporation | 15% | Article 10(2) |
| Interest on a loan you made to the company | 0% | Article 11(2) |
Rates from IRS Tax Treaty Table 1 (Rev. May 2023). The IRS notes the table is not a complete guide to eligibility; the treaty's conditions, including any limitation on benefits, must be met. Once you are a US resident these rates no longer apply to you.
Treaty and law references
Treaty
- The IRS lists the 1990 income tax treaty, signed February 22, 1990, amended by a protocol signed January 14, 2013. General effective date (IRS Table 3): treaty Jan. 1, 1991; protocol Nov. 27, 2019 (IRS treaty documents for Spain; treaty text; IRS Table 3).
- Residence and tie-breaker: Article 4 (Residence).
- Article 7 (Business Profits), business profits.
- Article 10 (Dividends), dividends.
- Article 24 (Relief from Double Taxation), relief from double taxation.
US law and E-2 rules
- E-2 status: State Department treaty countries (E-2 with Spain in force since April 14, 1903); USCIS E-2 Treaty Investors, 8 CFR 214.2(e).
- Tax residence: Code section 7701(b) (Pub 519). Treaty residence: Treas. Reg. section 301.7701(b)-7 and Form 8833 (IRS).
- Company filings: Code section 6038A and Treas. Reg. section 1.6038A-1 for Form 5472 (IRS); Treas. Reg. section 301.7701-3 entity classification (IRS); 15 CFR 801.7 BE-13 (eCFR).
- Foreign companies you control: Form 5471 (IRS).
The tax rules of Spain on leaving or keeping assets there also apply; a local adviser covers that side.
How we help
Gurleen Kaur, CPA licensed in British Columbia and Washington State, prepares the E-2 company's returns (Form 1120 or the LLC filings, Form 5472, BE-13) and your own first-year and ongoing US returns. Immigration filings stay with your lawyer. Written quote first.
E-2 investors from other countries
All countries: E-2 investor tax by country. From Canada: E-2 taxation for Canadian founders. Moving without an E-2: moving to the US, by country.
Common questions
Is there a minimum investment for an E-2 visa from Spain?
USCIS does not set a fixed minimum. The investment must be substantial in relation to the total cost of the business, and the lower the cost, the higher the proportion expected. The enterprise may not be marginal. Your immigration lawyer advises on this.
Does an E-2 investor from Spain pay US tax on worldwide income?
Usually yes, once resident. E-2 is not an exempt-individual category, so the substantial presence test applies, and a US resident is taxed on worldwide income from the residency starting date.
What if Spain also treats me as resident?
Article 4 (Residence) of the treaty decides residence for treaty purposes; claiming it on a US return needs Form 8833.
Does the E-2 company file Form 5472?
A US corporation that is 25% or more foreign-owned files Form 5472 with Form 1120, and a single-member LLC files it while its owner is a foreign person. Once you are a US resident you are no longer a foreign person for this purpose.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- U.S. Department of State: Treaty Countries
- USCIS: E-2 Treaty Investors
- IRS: Publication 519
- IRS: Instructions for Form 5472
- IRS: Instructions for Form 1120
- IRS: Instructions for Form 1065
- IRS: Instructions for Form 5471
- eCFR: 15 CFR 801.7 (BE-13)
- IRS: Form 8833
- SSA: U.S. International Social Security Agreements
- IRS: treaty documents for Spain
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 11, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: E-2 for Canadian founders, For immigration lawyers, Moving from Spain.
E-2 investor from Spain? Request a quote
Tell us your situation in a few lines. We confirm whether we can help, what records matter and the next step. Substantive advice begins under a paid diagnostic or signed engagement.
Prepared and signed by a licensed US CPA who can represent you before the IRS. Verify Gurleen Kaur's Washington licence (#41150) on CPAverify