E2 Treaty Investor

E-2 Visa – Treaty Investor

Spotlight on the E-2 Visa

Purpose of the E-2 Visa Classification –

The E-2 visa classification allows an individual to enter the United States temporarily to develop and direct the operations of a business investment in the U.S.

Advantages of the E-2 Visa Classification –

Application for an E-2 visa is made directly to a U.S. consulate. There is no need to submit a preliminary petition with U.S. Citizenship and Immigration Services (CIS).

There is no cap on E-2 visa extensions.

Disadvantages of the E-2 Visa Classification –

E-2 Visa Investors may only engage in employment that is consistent with the terms and conditions of the activities forming the basis for their E-2 visa status.

There are strict requirements on the nationality of individuals and the level of investment necessary to qualify for E-2 visa status.

Under NAFTA arrangements, the usual documentary waiver provisions (such as the visa exemption) that normally apply to Canadians do not apply to the E-2 visa classification.

Family –

Spouses and children under 21 may also receive E-2 visa status.

The nationality of a spouse or child of an E-2 visa investor is not material in determining eligibility for E-2 visa status.

Spouses may obtain employment authorization.

Spouses and minor children can also attend school.

What about domestic partners and same-sex spouses?

Points of Interest –

Regulations require only that E-2 visa visitors intend to depart when their status terminates. E-2 visa visitors do not have to maintain a foreign residence that they have no intention of abandoning.

Dual Intent: An application for initial admission, change of status, or extension of stay in E-2 visa classification may not be denied solely on the basis of an approved request for permanent labor certification or a filed or approved immigrant visa preference petition.

Individuals may change to E-2 visa status or extend their E-2 visa status by filing the necessary documents with the appropriate CIS Service Center. However, most U.S. consuls will adjudicate the E-2 visa application without regard to CIS approval. The consular officers are much more familiar with the E-2 visa category. Therefore, the value of going through the CIS Service Center is debatable.

One interesting and little known feature of the E visa category is that an individual may be admitted with a two-year I-94 even though the visa may be valid for a lesser time. For example, a person with one week left on his E visa may still obtain a two-year I-94 upon entry to the U.S.

For Canadians, it is especially important to keep in mind that since they are NOT EXEMPT from applying for an E-2 visa, if they change status internally and depart, they will not be readmitted at the POE without first applying for the E-2 visa at a U.S. Consulate. This could be a costly inconvenience because it may delay their reentry by a month or longer.

1. Definition of E-2 Visa Investor

The Immigration and Nationality Act (INA) and immigration regulations define an E-2 visa visitor as someone:

Entitled to enter the United States under the provisions of a treaty between the United States and the foreign state of which he or she is a national;

Has invested or is actively in the process of investing a substantial amount of capital in a bona fide enterprise in the United States;

Coming to the U.S. solely to develop and direct the enterprise; and

The individual intends to depart the United States upon the expiration or termination of E-2 visa status.

2. Requirements for E-2 Visa

National of an Authorized E-2 Visa Treaty Country.

To qualify for E-2 visa status, the investor must be a national of an Authorized E-2 Visa Treaty Country.

Two Categories Available under the E-2 Visa Classification:

E-2 Visa Treaty Investor working individually on his or her own behalf; or
E-2 Visa Employee.

E-2 Visa Investor Must Develop and Direct a Bona Fide Enterprise.

The enterprise must be a real, active, and operating commercial or entrepreneurial undertaking which produces services or goods for profit.

The enterprise cannot be a paper organization or an idle speculative investment held for potential appreciation in value, such as undeveloped land or stocks held by an investor without the intent to direct the enterprise.
The enterprise must meet applicable legal requirements for doing business in the particular jurisdiction in the United States.
E-2 Visa Investor must demonstrate that he or she does or will develop and direct the investment enterprise.
E-2 Visa Investor must establish that he or she controls the enterprise by demonstrating ownership of at least 50 percent of the enterprise, by possessing operational control through a managerial position or other corporate device, or by other means.

Enterprise May Not Be Marginal.

E-2 visa investment enterprise must have the present or future capacity to generate more than enough income to provide a minimal living for the E-2 visa investor and his or her family.
The projected future income-generating capacity should generally be realizable within 5 years from the date the E-2 Visa Investor commences the normal business activity of the enterprise.
The marginality test will be met by presenting a strong business plan that shows growth of the business as well as the need, capacity and ability to hire U.S. workers. When applying for an E-2 visa, it is essential to show the need, capacity and ability to hire U.S. workers.

Investment of Capital Necessary for E-2 Visa Enterprise.

The E-2 visa investor must place capital, including funds and other assets, at risk with the objective of generating a profit. At risk funds in the E-2 visa context would include only funds in which personal assets are involved, such as personal funds, other unencumbered assets, a mortgage with a personal dwelling used as collateral, or some similar personal liability.
Payments in the form of leases or rents for property or equipment, the amount spent for purchase of equipment and for inventory on hand, and rights to intangible or intellectual property may be considered capital assets.
The E-2 visa investor must be in possession of and have control over the capital invested or being invested. The statute does not require that the source of the funds be outside the United States.
The capital must be subject to partial or total loss if investment fortunes reverse.
Capital in the process of being invested or that has been invested must be irrevocably committed to the enterprise.

E-2 Visa Visitor Must Invest a Substantial Amount of Capital in Enterprise.

No set dollar figure constitutes a minimum amount of investment to be considered “substantial” for E-2 visa purposes. This requirement is met by satisfying the “proportionality test”;
Substantial in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise under consideration;
Sufficient to ensure the E-2 visa investor’s financial commitment to the successful operation of the enterprise; and
Of a magnitude to support the likelihood that the E-2 visa investor will successfully develop and direct the enterprise.
Whether an amount of capital is substantial in the proportionality sense is understood in terms of an inverted sliding scale; i.e., the lower the total cost of the enterprise, the higher, proportionately, the investment must be to meet these criteria.

3. Procedure for E-2 Visa for Treaty Investors

Step One: Application at U.S. Consulate.

Step Two: Inspection at U.S. Port of Entry.

4. Step One: Application for Visa at U.S. Consulate

Basic application package for a nonimmigrant visa:

Form DS-156, Nonimmigrant Visa Application;
Form DS-158, Contact Information and Work History for Nonimmigrant Visa Applicant;
A valid, unexpired passport;
Passport-type photograph; and
Application fee, if any.
Note that males between the age of 16 and 45 must also use Form DS-157.

5. Step One: Inspection at U.S. Port of Entry

Admission of E-2 Visa Investor.

If the E-2 visa is granted, the E-2 Visa Investor may then be admitted to the United States by an immigration officer at a U.S. port of entry.

Duration of E-2 Visa Status.

An E-2 Visa Investor may be admitted for an initial period of not more than 2 years.

An E-2 Visa Investor generally may not be admitted for a period of time extending more than 6 months beyond the expiration date of his or her passport.

6. Extension of E-2 Visa status

Extensions of E-2 visa status may be granted in increments of two years, and may be obtained through a CIS Service Center by filing Form I-129 and the E Supplement.

There is no limitation on the number of extensions of stay that may be granted.

To qualify for an extension of stay, the E-2 Visa Investor must prove that he or she:

Has at all times maintained the terms and conditions of his or her E-Visa nonimmigrant classification;
Was physically present in the United States at the time of filing the application for extension of stay; and
Has not abandoned his or her extension request.

Time limit for Certain Employees with Special Qualifications:

Employees of business enterprises with special qualifications who are responsible for start-up operations should be able to complete their objectives within 2 years.
Absent special circumstances, such employees will not be eligible to obtain an extension of stay.

7. Change of Status

A foreign citizen in another valid nonimmigrant status may apply for change of status to the E-2 visa classification by filing an application for change of status on Form I-129 and E Supplement, with the required accompanying documents.

The spouse or minor children of an applicant seeking a change of status to E-2 Visa Investor must file concurrent applications for change of status to derivative treaty classification on the appropriate Service form.

Applications for the spouse or minor children of an E-2 Visa Investor will:

Be approved only if the principal foreign citizen is granted E-2 visa status and continues to maintain that status; and
Be approved for the same period of admission applicable to all other E-2 Visa Investors.

8. Helpful Advice for E-2 Visa Investors

Labor disputes. Citizens of Canada or Mexico generally will not be entitled to E-2 visa classification if:

There is in progress a strike or lockout in the course of a labor dispute in the occupational classification at the place or intended place of employment; and
The E-2 visa applicant has failed to establish that his or her entry will not affect adversely the settlement of the strike or lockout or the employment of any person who is involved in the strike or lockout.

It is important to have strong proof of “money in” and “money out” to include copies of checks, bank statements, loan documents etc. Investments may include a transfer of equipment as well as cash. In addition, the economic benefit to the U.S. is an important factor, so you should show that employees will be hired. It also helps to show a “ripple effect” to other U.S. businesses based on your presence (suppliers, contractors etc.)

Also, if you qualify for both the E-1 visa and the E-2 visa, it is usually a better option to apply for the E-1 visa because it requires less documentation and it has no requirement for job creation.

In addition, if an individual has an inadmissibility problem, an E-2 visa may be the most expeditious way of obtaining an INA § 212 (d) (3) waiver.

For example, Canadian citizens (who are visa exempt for all visas except for the E-1 and E-2 visa categories) must file for a § 212 (d) (3) (B) waiver at a Port of Entry (POE), which is then forwarded to a local immigration office for processing.
Processing of a § 212 (d) (3) (B) waiver by immigration can take as long as 6-9 months.
A Canadian should consider using an E-2 visa whenever possible if he requires a waiver because a § 212 (d) (3) (A) waiver is processed at the Consulate in conjunction with an E-2 visa application.

Revised Decemeber 15, 2007

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