E-2 Treaty Investor Visas
By Steven N. Garmo
E-2 Treaty Investor visas are available to persons entering the US ““solely to develop and direct the operations of an enterprise in which he has invested, or is actively in the process of investing, a substantial amount of capital.”” E-2 non-immigrant visas are available to foreign-owned businesses if the home country of the business owners has a treaty with the US that allows American businesses to operate in that home country. At least 50% of the ownership of the enterprise must be in the hands of nationals of a country with which the US and the home country have a ratified bilateral investment treaty. Employees of the enterprise who are working in management, executive or ““essential”” positions are eligible for the visa if the ownership breakdown meets the above test, and the employee is a national of the treaty country. Some of the most important requirements for an E-2 visa include the following:
· The investment must be active, not passive. This means that the money invested must be used to produce a real commodity or service. For example, an investment in land would not be considered active, but if the investment was accompanied by submission of development plans to authorities and contracts for building, it would be active. Both the INS and State Department allow the use of an escrow account to protect the applicant in case the visa is denied, but other evidence showing the investment will be active must be presented. The investor must manage the business and exercise a controlling interest in the business.
· The investment must be substantial. While ““substantial”” is not defined by any particular dollar amount, both the INS and the Department of State use one of two tests to see if this requirement is met. They require either that the amount invested be proportional to the total value of the business, or that it be an amount typically considered necessary to establish a viable business in the field. The INS and State Department sometimes use a sliding scale that they are allowed to reference in determining whether an investment is ““substantial.””
o If the value of the business or the cost to start it is less than $500,000, a minimum 75% investment is required.
o If the value of the business or the cost to start it is between $500,000 and $ 3 million, a minimum 50% investment is required.
o If the value of the business or the cost to start it is over $3 million, a minimum 30% investment is required.
· The investment cannot be marginal. The State Department will look at whether the investment will generate more funds than just enough for the owner to make a living and whether the investment will create jobs.
The E-2 visa applicant must have nonimmigrant intent –– that is, they must intend to depart the US after their authorized period of stay is over. However, unlike other most other nonimmigrant visa categories, this requirement can be met if the alien simply provides the consulate with a statement indicating non-immigrant intent.
Applications for E-2 visas are made directly to the consulate and not through the INS unless the applicant is in the US in another visa status and seeks to change to an E-2 visa. Each consulate has its own version of an E visa questionnaire form and most require extensive documentation to support application. The length of time for which the visa will be issued is determined by agreements between the US and the treaty country. Visas may not be issued for more than five years, but they may be renewed continuously without a limit on stay in E-2 status. Spouses and children of E-2s are entitled to visas as well. E-2 family members are not subject to deportation proceedings because they accept employment, but they will be considered out of status and ineligible to change or adjust their visa status in the US. There are no restrictions on family members pursuing studies while in E-2 status, however.
E-1 Treaty Trader Visas
E-1 Treaty Trader Visas are available to people who will enter the US solely to carry on substantial trade, including trade in services or trade in technology, principally between the US and the foreign country of which the person is a national. The US and the trader's home country must have a ratified treaty of ““friendship, commerce, and navigation,”” or have some other diplomatic agreement that allows for treaty trader status. At least 50% of the ownership of the trading firm must be in the hands of nationals of the visa applicant's home country. To be eligible for an E-1 visa the person should be an owner, manager, executive, or hold an ““essential”” position within the company. The applicant must also be a national of the treaty country. Some of the most important requirements for an E-1 visa include the following:
The trading company must be ““trading.”” ““Trading”” can include the exchange, purchase, or sale of goods or services, as long as the goal of the trade is the development of international commercial trade between the US and the treaty country.
The trading must involve an actual exchange of qualifying commodities (including goods, services, or money) and the consideration must be traceable or identifiable.A transfer of title must pass from the trader of one nationality to the trader of the other.
Trade between the foreign company and the US must already exist. The visa applicant should be prepared to document existing and past contractual trade relationships.
The trading company must be engaged in ““substantial”” trade with the US. The visa applicant must show numerous transactions over time and a significant monetary value of business. There is no statutory minimum amount of trade, but the visa applicant should at least be able to show the volume of trade is enough to support the business as well as the visa applicant and his or her family. Consulates are cautioned, however, not to deny visas to small business people so long as there is continuing trade between the US and the treaty country.
Over 50 percent of the total volume of the company’’s trade must be between the US and the treaty country.
Applications for E-1 visas are made directly to the US consulate and not through the INS, unless the applicant is in the US in another visa status and seeks to change to an E-1 visa. Each consulate has its own version of an E visa questionnaire form and most require extensive documentation accompanying the application. The length of time the visa will be issued is determined by agreements between the US and the Treaty country. Visas may not be issued for more than five years, but they may be renewed continuously without a limit on stay in E-1 status. Spouses and children of E-1s are entitled to visas as well. E-1 family members will not be deported because they accept employment, but they will be considered out of status and ineligible to change status in the US.Without section 245(i) they will not be able to adjust status in the US.