E-2 Treaty Investor Visa
The following is a brief summary regarding E-2 eligibility, including certain policy guidelines for determining the substantiality of an investment.
Treaty of Trade / Investment
A treaty must exist between the U.S. and the alien’s country. E-2 applicants must be nationals of a country with which the United States has a qualifying treaty.
Majority Ownership and Control
The investing company must be majority held or controlled by nationals of the alien’s country. The nationality of the company engaging in investment is the nationality of those persons who own at least 50% of the stock of the corporation. The nationality of the persons owning the corporate stock is their country of citizenship. The principal investor must have the same nationality as the treaty enterprise. (Advisal: This 50% ownership/control requirement must continue throughout the period for which the E-2 status holders require such status; if the 50% ownership/control is eliminated, the E-2 status holders go out of status.)
Investment Required
A treaty investor must have irrevocably made (invested and put at risk) a substantial investment in a business in the U.S. or be actively involved in the process of making such an investment.
“Actively in the Process”
“Actively in the process” means that the investor has entered into a legally enforceable agreement which commits him or her to complete the investment of substantial funds in the business enterprise. An example might be the purchase of an existing business where escrow and a lease on the business premises have been assigned to the investor.
“Substantial Investment”
The key issue in the case of an E-2 visa is whether the alien has invested or is investing substantial capital which will create employment, in a bona fide enterprise, and is not seeking to proceed to the United States in connection with the investment of a small amount of capital in a marginal enterprise solely for the purpose of earning a living. In evaluating whether or not an alien has made a substantial investment, the State Department applies the proportionality test requiring a greater “stake” in the enterprise as the total cost of establishing a viable enterprise decreases. For example, for small businesses (i.e. those costing $500,000 or less), the State Department would expect the alien’s capital investment to be no less than 75 percent of the total amount necessary to establish a viable enterprise or purchase an existing enterprise. If the cost of the enterprise is substantially lower than $500,000, 85 percent to 90 percent or even 100 percent investment may be required.
In the alternative, the amount invested may be considered substantial if it is an amount normally considered necessary to establish a viable enterprise of the type contemplated (a test normally applied to new businesses).
“Active Business”
Although there are no formal restrictions as to the type of business that must be engaged in to qualify for a treaty investor visa, the business must be an active one since it should require full-time management by the investor and should tend to create employment for full-time U.S. workers. A passive real estate investment consortium is not considered “active.”
Family Members
Treaty investors may bring their spouse and minor unmarried children to reside with them in the U.S. as dependents. They may be nationals of any country.
Duration of E-2 Visas
The visa is valid initially for two years, with extensions of two year periods. A treaty investor may continue in the U.S. for as long as he or she continues to carry on the qualifying business, the treaty between his or her country of nationality and the U.S. continues in force, and the 50% foreign national investment requirement exists.
Foreign Residence Requirement
E visa holders do not have to maintain a foreign residence which they have no intention of abandoning as long as it is their intention at some indefinite time in the future to leave the United States when their period of stay (plus authorized extensions) expires. Consequently the treaty status is the next best thing to permanent residence and may be very attractive to a person who wishes to live in the U.S. indefinitely, but is unable to qualify for permanent residence status.
Key Employee of an E-2 Investor
An employee of the same nationality as the treaty investor may also qualify for treaty status if he or she will be employed in the United States by the treaty company in an executive or managerial position, or in a capacity that is essential to the successful operation of the treaty company. It would be necessary to show that the employee will not be performing ordinary duties but is instead a key employee who will render services of a type that a U.S. worker would be unable to perform.