Investor Visas: E-1 Treaty Traders & E-2 Treaty Investors
The E-1 and E-2 classifications present great opportunities for certain people to come to the United States under fairly flexible and rewarding circumstances. What makes the E category so great? Well, in some limited ways the E classification confers benefits similar to legal permanent residency. For example, one huge plus of the classification is, at least in theory, E non-immigrants can remain in the U.S. in E status forever. It doesn’t always play out that way in practice, and there are plenty of contingencies involved, but knowing that the possibility of an indefinite stay exists points to this classification’s considerable upside. Maybe most impressively, a limited form of dual intent is recognized for those in E status. This basically means that under the right circumstances, an E nonimmigrant may be the beneficiary of a labor certification, immigrant petition, or have an adjustment of status application and still remain eligible for E status. One final, enormous perk offered by this classification is that a qualified applicant can initiate an E petition on their own behalf. Most of the other employment-related classifications require that a prospective employer be first willing to offer employment to the prospective employee and submit a petition on the prospective employee’s behalf. In comparison, the E classification is a self-starter.
So, who qualifies?
#1) Show me the treaty
The E classification consists of two subcategories, the E-1 category for treaty traders and E-2 classification for treaty investors. The basis of the E classification as a whole lies in treaties that were intended to enhance and facilitate economic and commercial interaction between the U.S. and the treaty country. So, the first criteria to examine in assessing whether someone qualifies for E status is whether a treaty of Freedom, Commerce and Navigation exists between the U.S. and the country of the applicant’s nationality. A list of the qualifying treaties and the corresponding countries can be found here.
#2) Does the applicant have the right nationality?
As the second basic criteria, the applicant for E status must possess the nationality of the treaty country. In most cases nationality is fairly easy to determine as a matter of birth. If you weren’t born in a country that’s party to a FCN treaty and you still want to make a run at an E visa, call your local immigration attorney.
E-1 Treaty Traders:
After working through the preliminary questions of whether an appropriate treaty exists and whether the applicant has the requisite nationality, the focus shifts to the specific requirements germane to the individual E visa categories (ie., E-1 or E-2). First we’ll focus on the E-1 subcategory, which requires that the applicant be facilitating “trade” between the United States and the treaty country. “Trade” means the existing international exchange of items of trade for consideration between the U.S. and the treaty country. The governing regulations require that the exchange of items be traceable and identifiable. Furthermore, title to the trade item must pass from one treaty party to the other.
A non-exhaustive list of items that qualify for trade include: goods, services, technology, monies, international banking, insurance, transportation, tourism, communications, some news gathering activities, data processing, advertising, accounting, engineering and management consulting.
Finally, the trade must be substantial. The term “substantial trade” means an amount of trade sufficient to ensure a continuous flow of trade items between the U.S. and the treaty country. The emphasis is on numerous exchanges over time rather than a single transaction, regardless of the monetary value. In general, the trade will generally be considered substantial if it generates enough income to support the treaty trader and his or her family.
E-2 Treaty Investors:
Alright, let's now move our focus to a discussion of the E-2 treaty investor subcategory. In general I'd say that the E-2 is probably the most flexible E visa because you're not dealing with the specific mechanics of international trade. Once the treaty and nationality bridges have been crossed, the E-2 treaty investor must be in possession of and have control over the capital invested or being invested. The investment will be considered a proper investment if the investor received the funds in the first place by legitimate means—and this can be any source from earnings, savings, inheritance or even gift. Secondly, the investment capital must be subject to partial or total loss if the investment doesn’t work out. ie., Capital must be irrevocably committed to the enterprise. A mere intent to invest or possession of uncommitted funds in a bank account will not suffice.
Furthermore, the enterprise must be real and active commercial or entrepreneurial undertaking, it cannot be a paper organization or a speculative investment held for potential appreciation in value. Finally, the investment must be “substantial” in order to qualify the applicant for an E-2 visa. The relevant authorities haven’t drawn a line in the sand to identify the amount that constitutes a “substantial investment”, but suffice it to say that the amount depends on the investment opportunity at hand. If an applicant plans to use her E-2 visa to start a state-of-the-art microchip processing factory in Simi Valley, CA, an investment of $50,000.00 probably isn’t going to pass scrutiny. If, on the other hand, the applicant is going to invest $50,000.00 to open a falafel stand, and the applicant’s business plan projects a realistic chance for financial and employment-related growth, the chances are greater that the adjudicator at the Department of State will look favorably upon the application.
Options for people to immigrate to the U.S. so often depend on whether the alien has the right job offer, the right educational background, or the necessary family relationship. With the E-1 or E-2 investor visa classification, the normal rules don’t apply. If a person is a national from the correct country, has a decent bit of investment capital and some basic business acumen, the E-1/E-2 classification is an excellent, exciting immigration option. Oh, and finally, please remember that the E-1 and E-2 non-immigrant visas need to be distinguished from the EB-5 permanent residency investor status. Check back with us in the near future for an overview of the EB-5 program.
