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Treaty Traders & Investors (E-1 & E-2 Visas)

by Hamid R. Kashani, Attorney at Law
Nov 07, 2018 (last modified Apr 24, 2019)

What are E-1 & E-2 Visas?

E-1 and E-2 visas are nonimmigrant visas for traders and investors who are citizens and nationals of countries that have qualifying treaties with the United States.

What is a Treaty Trader or Treaty Investor Visa?

The Treaty Trader (E-1) and Treaty Investor (E-2) visas are nonimmigrant visas available to citizens and nationals of countries that have a qualifying commerce treaty with the United States.

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A treaty trader is a person who is coming to the United States to carry on a substantial trade between the United States and the person's country. The trade may be in goods, services, or technology. It must be substantial. To be considered substantial, the trade history must show numerous transactions, over an extended period of time, in an amount that would be sufficient to support the trader. At least 50% of the trade volume must be between the United States and the treaty country.

A treaty investor is a person who is coming to the United States to direct the operation of a business in which the person has invested, or is actively investing, a substantial amount of capital.

Employees of E-1 and E-2 visa holders may also qualify for this visa, if they are citizens or nationals of the same treaty country as the principal visa holder and if they are coming here to work in an executive or managerial capacity and possess specialized qualifications (knowledge, skill, etc.).

Who are the treaty countries?

For a list of the countries that have qualifying treaties with the United States, see Treaty Countries.

What are my options if I am not from a treaty country?

To qualify for E-2 visa, you must be a citizen or national of a treaty country.  If you are not, then you may explore other options:

  • You may invest $500,000 or more and seek an investment visa (EB-5), which would allow you to receive an immigrant visa (permanent residence or green card) to the United States. Please note, however, that once you become a permanent resident of the United States, your worldwide income becomes subject to U.S. taxation and other financial reporting. You must consult your accountant or tax attorney on this point.
  • If you work for a multinational company, you may seek an immigrant visa for multinational managers & executives.
  • You may consider applying for a job in the United States and obtain either an immigrant or nonimmigrant visa. See Business & Work Immigrant Visas.
Negotiations

How much investment is required for receiving E-2 visa?

A substantial amount of capital is required to qualify for Treaty Investor (E-2) visa.

  • The amount of investment must be substantial-- comparable to the cost of establishing a new business or purchasing an established business.
  • The sufficiency of the investment must demonstrate the treaty investor's commitment to the enterprise.
  • The magnitude of the investment must demonstrate the likelihood that the treaty investor would be able to successfully develop and direct the enterprise.

You must document the source of the investment funds in order to show that they were not, directly or indirectly, obtained through a criminal or prohibited activity.

The enterprise may not be marginal or pro forma, i.e., you must be able to show that it either has current capacity or future potential to provide sufficient income for living expenses of the investor and the investor's family.

Commitment of funds must irrevocable, and the investment must be at risk in the commercial sense, i.e., you must be at risk of losing all or part of the investment— like any other commercial venture.  For example, investing your fund in a savings account would not qualify as investment for purposes of E-2 visa.

What amount of investment is considered substantial?

Whether the amount of investment is substantial is determined by reference to the Proportionality Test. The United States Department of State's Foreign Affairs Manual provides:

The proportionality test determines whether an investment is substantial by weighing the amount of qualifying funds invested against the cost of the business.  If the two figures are the same, then the investor has invested 100 percent of the needed funds in the business; such an investment is substantial.  The vast majority of cases involve lesser percentages.  The proportionality test can best be understood as a sort of inverted sliding scale. The lower the cost of the business the higher a percentage of investment is required. On the other hand, a highly expensive business would require a lower percentage of qualifying investment. There are no bright line percentages that exist in order for an investment to be considered substantial. Thus, investments constituting 100 percent of the total cost would normally qualify for a business requiring a startup cost of $100,000, for example. At the other extreme, an investment of $10 million in a $100 million business may be considered substantial, based on the sheer magnitude of the investment itself.

9 FAM § 402.9-6(D)(c). Therefore, “[t]he value (cost) of the business is clearly dependent on the nature of the enterprise. Any manufacturing business, such as an automobile manufacturer, might easily cost many millions of dollars to either purchase or establish and operate the business. At the extreme opposite pole, the cost to purchase an ongoing commercial enterprise or to establish a service business, such as a consulting firm, may be relatively low.” 9 FAM § 402.9-6(D)(c)(4).

Warning about selection of investment opportunities.  It is your responsibility to decide the kind and amount of investment you wish to make.  You should carefully examine and research various business opportunities, secure business information and marketing and sales research data, consult business and financial advisors, and make an informed decision before placing your funds at risk. Note that attorneys are neither qualified nor allowed to provide financial advice.  Your attorney's duty is to represent you in light of your direction.

How should I apply for E-1 or E-2 visa?

If you are currently in the United States, you may file a Petition for Nonimmigrant Worker (Form I-129) with the USCIS, to change your status.  If you are overseas, you must directly apply for E-1 or E-2 visas at a U.S. consulate.

What is maximum duration of E-1 & E-2 visas?

The initial period of E-1 and E-2 visas can be up to two (2) years.  These visas may be renewed indefinitely in two-year increments, so long as the required qualifications are met. If principal E-1 or E-2 visa holders leave the country on travel, on readmission they may receive an automatic two-year extension.  Note that the automatic readmission extension does not apply to the spouses and children of the principal E1 and E2 visa holders, but they may apply for the extension of their status, if they continue to qualify.

Can my spouse and children accompany me to the United States?

Yes. The spouses and minor children (unmarried and under 21) of E-1 and E-2 visa holders may accompany, or follow-to-join, them, under E-1 or E-2 visas.  Generally, they will receive the same period of stay as the principal visa holder.  If they are already in the United States, they may apply for change of status by filing a single Application to Extend/Change Nonimmigrant Status (I-539).

If the E-1 or E-2 visa holders travel outside of the United States, on return to the United States they may receive an automatic two-year extension of their status.  This rule does not apply to spouses and children of the E-1 or E-2 visa holders unless they accompany the visa holder on return to the United States.

Spouses of E-1 and E-2 visa holders may apply to receive employment authorization.

 

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