E-1 Trader Visa & E-2 Investor Visa Lawyer

E-1 Trader & E-2 Investor Visa Overview

Of particular concern to the local immigrants and business communities is learning about and choosing the appropriate category for investment-based travel and immigration to the United States. In this series, we will examine the various options, appropriateness for each particular case and risks associated with each.

E-1 Trader  & E-2 Investor Visa Background:

Section 101(a)(15)(E) of the Immigration and Nationality Act describes the “E” visa category as follows:

“an alien entitled to enter the United States under and in pursuance of the provisions of a treaty of commerce and navigation between the United States and the foreign of which he is a national, and the spouse and children of any such alien if accompanying or following to join him:

  • solely to carry on substantial trade, principally between the United States and the foreign state of which he is a national; or
  • has invested, or of an enterprise in which he is actively in the process of investing, a substantial amount of capital . . .”

The United States has signed several Treaties of “Friendship, Commerce and Navigation” with other countries designed to promote trade and investments between the US and the other contracting states, thereby encouraging good relations and peace. In the Middle East, contracting states include Egypt, Oman, Tunisia, Morocco, Turkey, Jordan, Israel and Iran. Nationals (individuals or companies) of countries with such Treaties with the United States can obtain visas to work in the US in order to develop and direct their trade with and/or investment in the US. Such visas are called E-visas and come in two types (E-1 & E-2):

E-1 & E-2 Visa Requirements:

There are three basic requirements for this immigrant visa:

  1. Creating a New Commercial Enterprise – this can be accomplished through any of these three mechanisms:
    1. The creation of an original unique business;
    2. The purchase of an existing business and then immediately restructuring it, creating a new commercial organization; or
    3. The expansion of an existing business created after November 1990 through the investment of the “required amount,” so that a substantial change in the net worth or number of employees results from the investment of money. The term “substantial change” is defined to mean a 40% increase in either the net worth or number of employees.
  2. Amount of the Investment – the investor must invest a minimum of $1 million subject to upward or downward adjustment under certain circumstances.
  3. Create full-time employment for at least 10 US workers- a qualified employee must work a minimum of 35 working hours per week, and can’t be an independent contractor.

The E-1:  Treaty Trader:

This type of nonimmigrant visa permits foreign nationals, key managerial and specialist employees with highly specialized skills from treaty courtiers to “develop and direct” import or export, a significant amount of international trade (of goods, services or technology) between their own country and the US. The key is that the volume of such trade must be sufficient and “substantial” to justify the presence of the visa holder in the US for the purpose of managing said trade. There is no set minimum level of trade which is considered “substantial” but at least 50% of the trader’s exports/imports must be to or from the USA. Lastly, the trader must have a past history of conducting trade between the US and the treaty country.

The E-2:  Treaty Investor:

The E-2 Investor Visa is often the most appropriate visa for Arab investors buying their own business or establishing a new business in the United States. To qualify for this visa the most important factors are:

  1. The investment must be “substantial.” There is no minimum figure required and investments in small and medium-sized businesses are contemplated in the Foreign Affairs manual, but it is related to the amount necessary to purchase an existing business or establish a new one. This “proportionality” is an either or test: the amount invested is weighed against either criterion. Investments at the lower end of the range are usually between $100,000 and $150,000, but can be less. Some financing is possible, but should not be more than 25% – 30% of the purchase price.
  1. The investment must be irrevocably committed to the purchase and should be placed in a special escrow account. Funds in a business account, for example, are normally insufficient to qualify you for an E-2 visa.
  1. The investment must be “non-marginal.” This requires demonstration that the business will generate more than enough income to support the investor and the investor’s family, but also contribute to the US economy, by employing US workers. In short the business will produce profits.
  1. The enterprise funded must be a real and active commercial or entrepreneurial undertaking, producing some service or commodity. The investor is expected to be actively engaged in developing and directing it. Passive investments – non-committed funds in a bank account, a paper organization or passive speculative investment, likes stocks or undeveloped land – do not qualify since they do not require the intent to direct or develop a commercial enterprise.
  1. The investor must be the source of the invested funds. Personal loans from relatives or friends can be considered part of the investment as long as the business is not collateral for the loan. Gifts of funds or inheritance for the investment are also permitted.

Other Considerations

  1. Current regulations allow for two co-investors to invest in, obtain E-2 visas and work in the business. The two investors can be related or unrelated business partners
  2. The spouse of an E-2 investor can apply for work authorization once in the US, and work for any employer. Dependent children under 21 will normally receive E-2 dependent visas valid until their 21st birthday. Dependent visas do not permit recipients to work in the business or elsewhere, but they can study or simply accompany their parents.
  3. Elderly or disabled dependents can obtain B-2 visas, often simultaneously with the investor and are normally permitted to stay in the US with the investor as long as their visa status remains valid.
  4. E-2 visas can be issued for up to five years. On renewal the visas are often granted for five years as long as the issuing US Embassy is satisfied that the business continues to meet the E-2 Investor Visa requirements. So long as eligibility continues, “E” status not only permits the visa holder to engage in the qualifying trade, but permits incidental activities as well, and to stay in the United States “indefinitely”, so long as the alien engages in the qualifying “E” employment.
  5. This visa category cannot be used as the prerequisite for an application for permanent residence (Green Card) by the Treaty Investor, because the law prohibits the investor from petitioning himself. However, if the investor has a business in the treaty country which continues to trade while the investor is in the US, the investor and his/her family may be able to qualify for Green Cards on the basis of a Multinational Manager application, after the US business has traded for at least one year.
  6. Investors can also consider other options to obtain a Green Card, after an initial E-2 Investor Visa including:
    1. Sponsorship by a close relative.
    2. Sponsorship by a prospective employer.
    3. Making an investment of $1 million (or $500,000 in a rural area or area of high unemployment) in a business.

Risks:

Of course, there is always the risk that the “E-2” visa will be denied. Therefore, careful planning in the formation of the investment must be used to insure it meets all the criteria established by USCIS regulations – if it does, the visa should be approved, however, consular officers at many U.S. Embassies and Consulates around the world exercise independent discretion in approving “E” visas, and there is no guarantee that the visa will be issued. The documentation which must be submitted to the American Embassy, however, is quite extensive, and recently documentary standards have been raised further.

“E-2” visas are very complex. We recommend seeking the advice of qualified immigration/business counsel, not only for the preparation of the immigration paperwork, but in the formation of the underlying U.S. business entity, or the purchase of an already existing U.S. business.

B. Requirements for the E-1 Treaty Trader

Nonimmigrant visa status is provided to nationals of certain countries that are parties to certain treaties with the United States.  The Immigration and Nationality Act (INA) grants this status.  The treaty must be one of commerce and navigation.

  • Applicants must be nationals of countries that are parties to commerce and navigation treaties with the United States.
  • Applicants must intend to come to the United States to engage in “substantial trade,” and this trade must mainly take place between the applicant’s country of nationality and the United States, or develop and direct an enterprise’s operations invested in by the applicant, or the applicant must be engaged in the process of investing substantial capital in the enterprise.
  • The nationality of the trading firm in the United States must be of the same nationality as the applicant for the temporary visa.
  • There must be a transfer of title of the trade goods. The title cannot remain with one party only.
  • Applicants must have an executive or supervisory role or have highly specialized skills required for the firm’s operations.
  • Unskilled or ordinary skilled applicants are not eligible for this type of visa.

C. Requirements for the E-2 Investor Visa

  • The investor must be a real or corporate person who is a national of a country that is a party to a treaty with the United States as previously described.
  • There must be a substantial investment that is sufficient in and of itself to ensure that the enterprise will operate successfully. For a low cost enterprise, the investment percentage needs to be higher than that of a high cost enterprise.
  • Idle or speculative investments and securities, such as a bank account with uncommitted funds, are not sufficient; there must be investment in an actual, operating business enterprise.
  • The investment, in being substantial, must either have a substantial impact on the economy in United States or create a lot more income than that needed for the livelihood of the investor and his or her family.
  • The funds must be under the investor’s control.
  • Commercially speaking, the investment must be at risk.
  • The investor must not secure a loan with assets from the investment in the business enterprise.
  • The investor must start and run the enterprise in the United States.
  • If not the main investor, the applicant must either have a supervisory or executive role or have highly specialized skills needed for the operation of the enterprise.
  • The investor cannot apply as an unskilled or ordinary worker, because the above mentioned roles are what are acceptable.

D. Applying for the E-1  & E-2 Investor Visa

Generally, persons applying for visas should submit their application at the U.S. Embassy or Consulate that has jurisdiction over their place of permanent residence.  While it is permissible to apply at any U.S. Consulate or Embassy abroad, applying outside of one’s country of permanent residence can make it harder to qualify for a visa.  All visa applicants between the ages of 14 and 79 must be interviewed at a consular section of a U.S. Embassy or at a U.S. Consulate.  Visa applicants are encouraged to apply as early as possible because wait times for interview appointments vary.  Click the link Visa Wait Times for information on visa processing time and interview appointment wait times for visa applications.  This information is also available on must U.S. Embassy websites.  Visa processing time can be further lengthened by administrative processing following the applicant’s interview.  Expect to have a digital, ink-free fingerprint scan taken during the visa application process.  Most often, this will take place during the interview.

Administrative Processing

Visa applicants may face additional processing time of their application.  This can occur after one’s interview with a Consular Officer has already taken place.  Usually, administrative processing has been completed within 60 days of the interview.  However, the exact timing depends on each individual case and its corresponding circumstances.  It is advisable to apply early for the visa, leaving plenty of time before one’s planned travel date.  If visa applicants wish to inquire into the status of the administrative processing of their visa, they must wait at least 60 days from the date of the interview with the Consular Officer or when supplemental documents were submitted, whichever occurred later.

Visa Ineligibility/Waiver

Form DS-156, the application for a nonimmigrant visa, includes a list of all categories of persons not eligible to receive visas.  However, under certain circumstances ineligible persons who can be categorized as treaty investors or treaty traders can apply for a waiver (an ineligibility waiver).  Successful waivers result in these persons having their visas approved.

Required Documentation

  • A completed and signed Form DS-156, Nonimmigrant Application.
  • Form DS-156E, the Nonimmigrant Treaty Trader/Treaty Investor Application.
  • A valid passport for U.S. travel with a date of validity that extends at least six months past the visa applicant’s intended time spent in the United States (unless there are exceptions made in country-specific agreements). Click here to see if you are from a country that has such exceptions.  A Form DS-156 application must be completed for each person if more than one is included in the passport.
  • A photograph that is 2 x 2.
  • For all male applicants for a nonimmigrant visa between the ages of 16 and 45, regardless of place of application and nationality, Form DS-157, Supplemental Non-immigration Visa Application, needs to be submitted.

In addition, both male and female applicants for all countries deemed state sponsors of terrorism aged 16 and older must submit Form DS-157, Supplemental Non-immigration Visa Application.  Syria, Iran, Cuba, and Sudan are currently on this list.

Additional Documentation

An officer at a U.S. Consulate or Embassy may provide E-1 or E-2 applicants with additional, special forms pertaining to information on how the applicant meets certain requirements to have the E-1 or E-2 status.  If this is the case, additional documentation may need to be provided.  Since circumstances vary depending on each individual’s case, it is best to refer to the consular officer to determine exactly what documentation is needed.

U.S. Port of Entry

Rather than being an absolute guarantee of entry into the United States, a visa allows foreign citizens coming from overseas to arrive at a U.S. port of entry and then request permission from the U.S. government to enter the country.  Officials from the U.S. Customs and Border Protection (CBP) of the Department of Homeland Security, within the purview of their job responsibilities, can either permit or deny visa holders’ entry into the United States.   Applicants granted entry to the United States will find out from a Customs and Border Protection official their exact length of stay in the United States on Form I-94, the Arrival-Departure Record.  It is important to keep track of this form, as it documents the authorized time period in which one is allowed to stay in the country.

Prior to travel, it is advised that applicants review Admissions/Entry requirements. Also, applicants should become up to date on the following information:

  • Transport of food to the United States
  • Transport of agriculture products to the United Sates
  • Transport of other restricted/prohibited items to the United States

In general, the Customs and Border Protection section of the Department of Homeland Security website provides helpful information on these matters.

What to Expect Upon Arrival

Upon arrival at an international land border crossing, seaport, or airport, visa applicants should prepare to be enrolled in the entry-exit program known as US-VISIT.  Some applicants who arrive in the United States will also need to register their entry and exit in compliance with the Special Registration program.

Family Members of E-1 and E-2 Visa Holders

If the holder of an E-1 or E-2 Investor Visa has unmarried children younger than 21 years of age and/or a spouse, these persons may apply for derivative E visas.  Spouses of E visa holders can apply to the Department of Homeland Security for employment authorization.  It should be noted that if the E visa holder’s children are holders of derivative E visas, they are not entitled to work in the United States.

Time Limits

As long as E-1 & E-2 Investor visa holders are complying with their visa requirements, they may stay in the United States as long as they continue to hold their status with the business enterprise.

 

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