E2 Business Treaty

Benefits of an E2

The E2 visa enables an investor to work in the U.S. Although an E2 visa is considered a non-immigrant visa, it does not expire after a set number of years: it is initially issued for two years but this status is renewable indefinitely, as long as the investor is running the business, the underlying investment subsists, and the business generates “more than enough revenue” to support the investor’s family or to make a significant economic impact in the U.S. (ie so long as the E2 qualifications continue to exist)   Once here, the investor can apply for a green card, and then citizenship. Unlike many other visas, there are no quotas for the E2 visa, which means that the number that can be issued is limitless. This visa is growing in popularity and, if you have what it takes financially, is probably the easiest way to enter and work in the US legally.

 

Qualifying for an E2: Who Qualifies for the E2 Visa

A. Non-citizen investors, (either real or corporate) from qualifying countries who make sufficient investment in new or existing business in the U.S.

B. Key Employees of the enterprise, whether managerial or specialist employees

C.  The investor’s spouse and children under age 21. These dependants will automatically be eligible to study in the U.S., but will have to make a separate application for work authorization.

1. The Investor Applicant (which can be either a real or corporate person), who must first show that he, she or it is a national of one of the countries with which the U.S. has a Treaty of Commerce and Navigation, must also show ownership in an actual U.S. business in which he, she or it, has made a substantial investment. The investor applicant must show that he she or it has control over the investment and is directing and developing it.
1. Ownership and control:

                                                               i.      The US business must be at least 50% owned by individuals of the treaty nationality (which can be satisfied by combining the ownership of two or more qualifying investors).

1.      The investor cannot be a permanent resident of the US (a green card holder).

                                                             ii.      The investor applicant must take an active role in managing and directing the business, from within the U.S.

                                                            iii.      The investor applicant must have control of the investment, and therefore must own more than 50% of the enterprise. 

2. Actual Business

                                                               i.      The investment must be an active commercial enterprise, a real operating business (otherwise the investor is not “directing and developing” the investment)

1.      Note that self-employed professionals (doctors, lawyers, IT consultants, etc) cannot apply for the E2 visa because this is not deemed to qualify as directed and developing an investment, but, rather, acting in an individual capacity instead.

                                                             ii.      It cannot be speculative: it must need supervision and management on a day to day basis.

                                                            iii.      It must be financially successful and either

1.      Generate significantly more income than just to provide a living to the investor and family; or

2.      have a significant economic impact in the United States

a.        Notably, the investor should employ US workers. There is no fixed number of employees required, but the more employees referred to in the application, the greater the applicant’s likelihood of success.

                                                          iv.      Methods of Proof that it is an Actual and Ongoing Business

1.      Submit:

a.       articles of incorporation

b.      company bank statements

c.       credit agreements with suppliers

d.      letters of credit used

e.       leases or deeds for premises

f.        tax returns for past two years (if buying an existing business)

g.       detailed business plan including financial projections for next five years (if start-up business)

h.       promotional literature or advertising

3. Substantial Investment: The investor must have invested or be actively in the process of investing a “substantial amount of money”. The main ingredient is a showing of “risk”.

                                                              i.      “Substantial”: It must be an active investment, and the investment must be of a sufficient dollar amount to ensure the successful operation of the enterprise.  

a.      The purchase of a house in the hope that it will increase in value is not an active investment: the investor must make an irrevocable commitment of funds that represents an actual, active investment

                                                                                                                                      i.      Note that if you are buying a business, funds should be placed in an escrow account pending approval of the application.

b.      It cannot be marginal: the investment cannot just provide a living for the investor and his or her family

                                                                                                                                      i.      show that it will create jobs for US workers, either that they are already employed or that they will be employed within a reasonable period of time – certainly before five years are up.

2.      The USCIS does not require any set dollar amount, the following figures are decent guides:

a.      A substantial part of the investment ($30,000 to $50,000) must have been made before applying for E2 status

b.      The total amount of investment should fall within the $200,000 to $300,000 range.

3.      The Investment can be a combination of cash and capital:

a.      CASH : must be actually spent on the business

                                                                                                                                      i.      A substantial sum must be in cash. This is to ensure that the investment is one of risk. Therefore, 51% of the investment should be in the form of cash (unless eg in the property industry, where the role of cash is minimized). However, where debt is secured against other assets of the investor, it is considered to be at risk and may be considered as part of the equity invested.

b.      CAPITAL : must be large enough to allow the enterprise to succeed

4.      Proportion: The investment must be proportional  to the total value of the enterprise OR be an amount normally considered necessary to establish a viable enterprise of the type contemplated (if a start up)

5.      The USCIS uses an inverted proportional scale to evaluate how much is enough in each industry sector. In a service industry, the ratio of the investment to the value of the enterprise must be higher than that shown for, for example, a manufacturing industry enterprise.

6.      Service Industry Investment: If the enterprise is in the service industry, less is typically required to set the business up, however, the USCIS still require that, for the purposes of the E2 treaty application, more should be invested. While a consulting agency might need very little actual investment to be successful, an application that states that $10,000.00 alone will be invested is likely to be denied. Therefore, for service industry start-ups:

a.       Submit evidence showing that the amount of investment is high in proportion to the total value of the enterprise

b.      Submit a clear and concise business plan that provides for employees in the venture, within a reasonable time of the start-up.

                                                                                                                                       i.      The business plan should also detail the likelihood of success and rapid growth.

c.       Submit any other evidence that tends to show the credibility of the venture.

                                                            ii.      Nature or Origin of the Funds:

1.      The “invested” funds cannot just consist of funds in a bank account or of the buying of stocks and bonds or property: the funds must be actively invested.

a.       Similarly, funds not yet invested cannot be kept in an individual’s personal account, as this would create the assumption that they are not being legitimately held in reserve

                                                                                                                                       i.      Any funds not yet invested should be held in the business’ bank account.

                                                                                                                                     ii.      A detailed business plan should describe how these funds will be invested in the near future.

2.      the investment must be at risk in the commercial sense: risk capital must be committed. This must be more than un-guaranteed credit.

a.        A long term lease of an office in the U.S. is a good start.

3.      loans or debts secured with the assets of the investment enterprise are not allowed, as these have no risk

                                                          iii.      Method of Proof of a Substantial Investment

1.      bank wire transfer memos showing the money sent from the US to abroad

2.      contracts and bills of sale for purchase of business premises

3.      construction contracts, building permits, architectural plans, comprehensive business plans with cash flow projected for the next five years

4.      tax returns, if buying an existing business

5.      if startup, market surveys, summaries of trade association research, or written reports from business consultants to prove the investment will provide sufficient capitalization for the business.

6.      Accounts, financial statements, balance sheets.

 

2. Key Employees, if the majority owners of the enterprise are eligible for E2 status, (whether the majority owners actually hold an E2 visa or not). However, they must be of the same nationality as the principal investor. To qualify as a key employee, the applicant must either:
1. Hold an Executive or Supervisory Role.

                                                               i.      The applicant must show he or she has

1.       Substantial managerial control (the ability to “direct and develop” the investment)

a.       An Executive has the authority to determine the policies and direction of the business.

b.      A Supervisor has responsibility for supervising a major part of the business

2.      A salary commensurate with the title.

3.      (Note that the applicant does not need to show that they have worked for the principal investor in the past)

                                                  i.      Methods of Proof

1.      Letter from the Investor or Superior

a.       Which indicates in detail the job requirements and that the applicant will, using his or her skill and experience, “direct and develop” the investment.

2.      Applicant’s Statement

a.       Stating applicant’s job details and the number of employees the applicant supervises/ will supervise.

3.      Applicant’s resume:

a.       Which shows the applicant possesses the skills and qualifications as well as the business acumen to fill the position

4.      Letters of verification from previous employees

                                                             ii.      Application and renewal:

1.      This is relatively easy to get and simple to renew. If the investor already has E2 status, (actually holds the visa) the application can be approved in as little as 10-12 days.

2. Be an Essential Employee: this means that the position can only be filled by someone with specialist skills or knowledge, and that these skills and knowledge are essential to the business (again, they must be of the same nationality as the principal investor)

                                                               i.      In general, the applicant must prove some or all of the following:

1.      Sufficient level of expertise, and that that level of expertise is required for the position

2.      Sufficient experience and/or training with the company

3.      That position could not be filled by a U.S. citizen, or, if it could, a detailed analysis as to how long would it take to train a U.S. citizen to do the job.

4.      A Salary commensurate with the position.

5.      Note that knowledge of a foreign language or culture is NOT enough here.

                                                             ii.      Methods of Proof:

1.      A statement explaining the applicant’s skills and knowledge and why the applicant is an essential employee.

 

Where to Apply and How Long Does it Take

The length of time it takes to process an E2 visa depends entirely on where you file it. If the applicant is in the United States at the time of making the application, he or she can receive approval, using expedited filing, in as little as a week. However, before filing in the U.S. the applicant should consult with an attorney to identify whether it is appropriate, in that particular circumstance, to do so, and it rarely is.

If applying outside the U.S., the applicant can submit the application at any U.S. Consulate, and processing times vary. However, applications filed in the applicant’s country of citizenship or permanent residence are more likely to succeed, while those filed in different countries are likely to raise suspicion. Unfortunately, this doesn’t mean you should shop around. Applications filed in the applicant’s home country will be better received than applications filed in different countries, which could raise suspicion. The typical processing time for an E2 visa application is 4-6 weeks.

 

Waiver of Ineligibilty

An applicant otherwise ineligible to receive a visa under U.S. law, but who is otherwise eligible to receive an E2 visa, may apply for a waiver of ineligibility, and, if successful, would be issued an E2 visa.

 

The Interview

Like many aspects of the visa application process, the sufficiency of the investment will depend on the discretion of the adjudicating consular officer. Therefore it is vital that the applicant be able to explain clearly, for example, if the business is in the service industry and therefore requires less investment.

The E2 investor or E2 staff must be able and willing to leave the US when their E2 status ends. Therefore, show the USCIS evidence of the applicant’s responsibilities in the home country, such as property ownership, other possessions, relatives still living there, or a job to return to.

 

Business-based alternatives to the E2 Visa

E1 Trader Visa

L1 Intra company transfer visa

H1B specialty occupation visa

EB-5 Immigrant Investor