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Investor Visas (E-1/E-2)

General

The E category presents one of the most flexible and workable visas classifications that can be utilized by businesses and foreign individuals who come to the U.S. with the aim of engaging in a wide range of business activities. Unlike H-1B, E category is not subject to the restrictive annual quota, does not require high filings fees, and allows for self-employment. Under certain conditions, it allows for indefinite stay in E status, provides for possibility of obtaining employment authorization for spouses with no restrictions either on the nature of the employer or the duties performed. Further, E category does not require beneficiaries to maintain ties to their home country.

The E category has its basis in treaties which were entered into between the United States and foreign countries. Therefore, whether someone is eligible fore E visa or not will depend on whether an appropriate treaty exists between the United States and the individual’s country of nationality. E visas are generally adjudicated at U.S. consulates abroad and do not require pre-approval from the USCIS. However, for those who are already in the U.S., it is possible to change status to E without having to travel abroad to a U.S. consulate, by applying to USCIS for a change or extension of status. The regulations applied by U.S. consulates and USCIS when adjudicating E visas are different is some respects, so one must be careful to consider these differences depending on which agency the application is being filed with.

Q: What kind of treaty should I look for? How do I know if my country of nationality has the appropriate treaty with the United States?

A: There are two kinds of treaties which form the basis for issuance of E visas. The first is treaties of Freedom, Commerce and Navigation (“FCN”). The second is kind is Bilateral Investment Treaties (“BIT”). In addition, special legislation has been enacted that extended the availability of E visas to nationals of certain countries that do not have treaties with the United States. Please contact us for the most up to date information on your eligibility to obtain E visa and specific conditions that apply to nationals of certain countries.

Q: What are E-1 and E-2 visas? What is the difference between these two?

A: E-1 subcategory applies to those who enter the U.S. to carry on substantial trade principally between the U.S. and the country of nationality of the applicant (Treaty Trader).

E-2 subcategory applies to those who enter the U.S. to develop and direct the operations of an enterprise in which s/he has invested or is in process of investing a substantial amount of capital (Treaty Investor).

Please note that some treaties limit availability of E visas to only E-1 or E-2 category, while other treaties allow for both E-1 and E-2.

Q: How is the nationality of a business determined for E visa purposes?

A: Nationality of a business is determined by the nationality of owners. Nationality of the owners is determined according to local laws. Place of incorporation of a business is irrelevant for E visa purposes.

For publicly traded companies, the nationality is that of the exchange on which the stock are primarily traded.

Q: What is 50% rule?

A: Nationals of the treaty country must own at least 50% of the business in order to qualify for E visa. If a business is owned equally by two persons who possess different nationalities, the business will have both nationalities for E visa purposes.

E-1 TREATY TRADERS

Q: What is “trade” for E visa purposes?

A: Trade means “existing international exchange of items of trade for consideration between the United States and the treaty country.” The title to the trade item must pass form one treaty party to another. Trade must be in existence at the time E visa application is made. It will be considered to be in existence if there are successfully negotiated contracts which are binding upon the parties, which call for immediate exchange of items of trade. This means that there is a need to document prior transactions or the existence of contracts to establish eligibility for E visa.

Q: What is “trade item?”

A: Trade items are goods, services, technology, monies, international banking, insurance, transportation, tourism, communications, and some news gathering activities, data processing, advertising, accounting, design and engineering, and management consulting. Although most of the more traditional business activities will fall within what is listed above, this list is not exhaustive. Any item commonly traded in international trade can qualify.

Q: What trade is considered “international trade”?

A: International is trade between U.S. and the other treaty country. Purely domestic trade will not constitute “trade” for the purposes of E visa issuance.

Q: What is “substantial trade”?

A: In order to be substantial, trade must involve multiple transactions over time or a “continuous flow” of goods or services. Greater value is accorded to the number of transactions, rather than the value of each single transaction. A favorable factor in establishing substantiality is income derived from international transactions which is sufficient to support treaty trader and family.

E-2 TREATY INVESTORS

Q: What is “investment” for purposes of E visa issuance?

A: Investment means the treaty investor’s placing of capital, including funds and other assets, at risk in the commercial sense with the objective of generating profit. The treaty investor must be in possession of and have control over the capital invested or being invested. The capital must be subject to partial or total loss if investment fortunes reverse. Such investment capital must be the investor’s unsecured personal business capital or capital secured by personal assets. Capital in the process of being invested or that has been invested must be irrevocably committed to the enterprise.

Q: What does placing capital “at risk” mean?

A: It means that simply having funds available in a bank account does not do the trick. The funds must be so placed, that they are subject to partial or total loss. At the same time, certain funds in a bank account may be counted toward the “investment” if it can be shown that these funds are to be used for routine business operations. This issue is closely related to the “irrevocability” of committed funds, which is discussed below.

Q: What does it mean capital “must be irrevocably committed”?

A: This serves the purpose of ensuring that a prospective investor is at a point where s/he identified the investment opportunity and made commitments, as opposed to simply intend to invest into an enterprise and having funds in a bank account. Understandably, investors will want to mitigate their risks, such as to account for the possibility that an E visas may be denied and they will not be able to arrive to the United States to “develop and direct” the activities of their enterprise. It is, therefore, advisable to use instruments such as escrow accounts for release only on condition that the visa has been issued.

Q: What “other assets” qualify as investment?

A: Other assets that qualify as investment may be in the form of lease or rent payments made in advance, equipment purchased or goods purchased for use in the enterprise (not for personal use), or intangible property (such as patents) to the extent that value of such assets may be ascertained.

Q: Can a “paper company” be sufficient for the purpose of obtaining an E visa?

A: No, the enterprise must be a “real and active undertaking.” A company existing on paper without any perspective of producing any goods or providing any services for profit can not be used for purposes of obtaining E visa. Also, because the enterprise must be producing or intended to produce profit, E-2 status is not available to nonprofit organizations.

Q: What size of investment will be sufficient for issuance of E-2 visa? Is there a set dollar amount that has to be invested?

A: There is no dollar amount that is specified in the regulations as sufficient or a minimum amount necessary to obtain E-2 visa. In determining whether the size of the investment warrants issuance of E-2 visa, consular officers will apply proportionality test by comparing cost of the business (that is purchase price) or cost of establishing a new business with the investment. Consular officers are aware that some businesses cost less than others to get them going, so they will expect a substantial percentage of the cost of such business (services industry) to have been invested by the applicant for E-2 visa. The lower the cost of the business, the higher percentage of investment will be required.

Q: What does it mean “the investment should not be marginal?”

A: There are two issues here. First, a marginal business is one that provides income just enough to support the investor and family. So the goal is to show that the business produces more income than is required to make a living. If this can be shown, the applicant will meet the test.

The second issue comes into play if the business does not meet the first test, i.e. it produces just enough income to support the investor and family. In this case consular officers will look for present or future capacity of such business to make a positive significant economic contribution. For example if the business expanded job opportunities for local residents, it will meet the test. Such a significant economic contribution must generally be realized within five (5) years of the start of normal operations. It is recommended to provide a detailed business plan.

Q: How do I show to the consular officer that I will develop and direct the business?

A: A treaty trader must be seeking entry into the U.S. solely to develop and direct the treaty business. This can generally be shown by at least 50% ownership of the enterprise, or by operational control.

E-1/E-2 EMPLOYEES

Q: Can E traders and investors bring their employees to work in the U.S.?

A: Yes. Employees of treaty traders or investors may come to the U.S. to work, provided they are coming to work in an executive or supervisory capacity, or if they possess special qualifications and will provide essential to efficient operation of the business. If application is approved employees will get same E-1 or E-2 visa. Employees must posses the same nationality as their employer.

Q: What is Executive or Supervisory Capacity?

A: Executive or supervisory capacity entails ultimate control and responsibility for the enterprise’s overall operation or a major component thereof. Executive employees have the authority to determine policy of a business. Supervisory employees have the authority to supervise a significant proportion of the operations. These are not line managers who supervise low level employees. In order to determine whether an employee will in fact work in an executive or supervisory capacity, consular officers will consider the following:

  • Title
  • Place in the organizational structure of the company
  • Duties of the position
  • Number and skill levels of employees under the supervision of the applicant
  • Level of pay
  • Prior supervisory or executive experience

Q: What are Special Qualifications?

A: Special qualifications are skills that employee brings to the position and which are essential for successful or efficient operation of the enterprise. Factors that will be considered when assessing whether employee possesses special qualifications are:

  • Degree of proven expertise in the area of specialization
  • Uniqueness of the specific skills
  • Function of the job which applicant will assume
  • Salary

Unlike L-1B “specialized knowledge” employees, this category does not require any previous employment experience with the treaty enterprise.

Q: Are E visa holders allowed to work for subsidiaries of the treaty enterprise?

A: Yes, E visa holders are permitted to work for subsidiaries of a common parent enterprise if, at the time E treaty status was determined, the applicant can show the following:

  • The enterprise or organization, and any subsidiaries thereof, where the work will be performed;
  • The requisite parent-subsidiary relationship;
  • That the subsidiary independently qualifies as a treaty organization;
  • The work is consistent with the terms and conditions of the activity forming the basis for the E classification.