NONIMMIGRANT VISAS

E-1 & E-2: Treaty Traders and Treaty Investors

 

 

The E-1 and E-2 visa (“E Visa”) category is used by a wide range of foreign-owned companies, from small start-ups to publicly-traded corporations. An E visa is granted based on a qualifying treaty of commerce and navigation between the United States and the country of the foreign company’s nationality (see list of treaty countries). E visas allow employment of individuals of the same foreign nationality in executive, supervisory, or essential capacities. Note that not all nationalities are covered by an E visa treaty, and that some nationalities are covered for E-1 or E-2, but not both. Accompanying spouses will be eligible for an E visa regardless of nationality.

 

One of the distinguishing features of the E visa category is the ownership requirement that determines the company’s foreign nationality. The nationality of a business is the nationality of the individual owners, determined by tracing the ownership of the organization back to the individuals who ultimately control and own the entity. The U.S. business must ultimately be at least 50% owned by foreign nationals (citizens of the treaty country), and ownership by U.S. citizens and U.S. permanent residents do not count towards this calculation.  For publicly-owned company whose shares are sold exclusively on a stock exchange in the country of incorporation, the company’s nationality will be presumed to be the location of the exchange. Further, treaty country nationals must also have at least 50% control over the U.S. business.   

 

E-1 Treaty Traders

 

E-1 visas are used by companies engaged in international trade of goods, services, and technologies, of which more than 50% of the international trade is between the United States and the treaty country. The trade must already be in existence (not planned in the future) and the title of the traded item must pass from one treaty party to another. The trade must also be continuous, involving an ongoing flow of numerous transactions over time. There is no specific requirement on the amount or volume of the trade, but income derived from the international trade must be sufficient to support the treaty trader and his or her family. If the U.S. enterprise is a branch office of a business located abroad, at least 50% of the international trade conducted by the entire organization worldwide must involve trade between the United States and the treaty country.

 

E-2 Treaty Investors

 

E-2 visas are used by companies that have been established based on, or will be carrying out, investment in the United States to operate a commercial enterprise. Treaty investors must demonstrate possession and control of the capital assets and investment funds, and show that the funds are irrevocably committed to the U.S. enterprise.  There is no specific requirement on the amount to be invested, but it must be “substantial” relative to the nature of the business to be operated in the United States. The investment must be sufficient to ensure the successful operation of the enterprise and have the capacity to either generate a significant economic impact in the United States or to generate significant income beyond providing a living to the investor and his or her family. Additionally, the amount of capital invested must be substantial in proportion to the total cost of purchasing an established organization or creating a new one: the lower the cost of the enterprise, the higher the required percentage of initial investment.

 

The regulations allow for certain payments and commitments to be put on hold or “in escrow” pending the issuance of the visa. For example, a purchase of a business which qualifies for E-2 status in every respect may be conditioned upon the issuance of the visa. This would constitute a solid commitment if the assets to be used for the purchase are held in escrow for release or transfer only on the condition of an E-2 visa being issued.

 

Application Procedures

 

While there may be slight variances depending on the place of application, E visa applications generally involve two steps with a U.S. consular post abroad: 

 

  1. Company registration, in which material showing company eligibility for E visa status as a Treaty Trader or a Treaty Investor is submitted.

  2. Visa application, in which the visa applicant is interviewed by a consular officer.

 

Depending on location, documentation on the qualifications of the visa applicant may be submitted with the company registration material, or separately at the time of visa interview.  Most consular offices require 4 to 8 weeks to review company registrations.

 

Business-Related Documents to be Submitted

 

The documentation submitted to the U.S. consular post must include extensive financial and business records on the U.S. business. 

 

E-1 Visa Applications - The main focus is to show that there is qualifying and sufficient international trade between the United States and the treaty country. Documents typically include:

 

  • A spreadsheet listing every qualifying transaction of international trade between the treaty country and the United States during the last calendar year. If there is a U.S. entity with separate legal status (such as an incorporated company or a LLC), all figures should refer to its trade. For branch offices, the trade of the entire company must be documented. This document must include the date, the invoice number, and the dollar value of the transactions.

  • Copies of all the invoices summarized in the spreadsheet.

  • If physical goods are traded, copies of all air bills or shipping invoices proving that the goods or services moved from one country to the other.

  • Calculation of the percentage of international trade represented by the US-treaty country trade documented above. This is not the percentage of total trade but the percentage of total international trade undertaken by the treaty investor business.

  • Most recent U.S. tax returns, financial statements and/or annual report. Similar financial documentation of the parent organization may also be required.

 

E-2 Visa Applications - Documentation submitted must establish that the U.S. business represents a real and substantial investment and that actual business operations will begin as soon as visas have been granted, if not already.

 

For larger companies, such as U.S. subsidiaries of a foreign publicly-owned companies, submitting the company’s organizational chart and U.S. audited financial statements along with the parent company’s annual report may be sufficient. For smaller or newly established companies the submission will typically include:

 

  • Copy of company formation documents.

  • Copy of office lease.

  • Copy of U.S. bank statements and records showing the source and amount of investment funds.

  • Copy of invoices, receipts and any other evidence of payment for necessary business assets such as furniture, equipment, tools, as well as business services (telephone lines, Internet service, etc.) to operate the business.

  • Documentation of commercial engagements or list of prospective clients.

  • Most recent U.S. tax returns, financial statements and/or annual report. Similar financial documentation of the parent organization may also be required.

  • A detailed 5-year business plan showing that all operational, financial and business considerations have been carefully thought out and planned.

 

Applicant-Related Documents to be Submitted

 

Typically, the applicant portion of an E visa application will include the individual’s curriculum vitae, copies of educational credentials, an organizational chart showing the prospective position at the U.S. company, a letter of support explaining the job duties to be performed, and the individual’s qualifications for the position.

 

E Visa Approval

 

If the application is approved, an E visa will be issued and placed in the visa applicant’s passport.  The E visa is the document that allows an individual to apply for entry into the United States, and is typically valid for two to five years. The length of the validity is decided at the reviewing officer’s discretion, and start-up businesses are often granted less than the maximum period. The visa may be renewed indefinitely by making an application with the U.S. consular post.

 

The I-94 admission record is created upon the individual’s arrival in the United States, and indicates how long he or she may remain in the U.S. Individuals in E-2 status are generally granted two years of stay every time they enter the United States. If necessary, extension requests may be filed by mail.

 

If the individual will be accompanied by a spouse, the spouse will also be granted E visa status. Upon arrival in the United States, the spouse will be entitled to apply for work authorization with the United States Citizenship and Immigration Services (USCIS). If approved, the spouse will be allowed to engage in open market employment in the United States for the duration of the work authorization. This authorization may be extended indefinitely for as long as the principal applicant maintains E visa status.

 

Unlike most employment visa categories, E visas may be renewed indefinitely, so long as the company remains qualified as a Treaty Trader or Treaty Investor.  For individuals employed in an essential skills capacity, the consular post may require additional explanation of the essentiality, such as whether the employee’s services are required for an indefinite or shorter period or whether a U.S. worker will be trained to replace the individual.

 

E Visa Applications by Additional Employees and Maintaining Company Registration

 

There are no limits to how many foreign nationals a company may employ, regardless of visa status. Additional individuals may apply for E visas as necessary, and the application logistics will vary depending on the place of application.

There is considerable variance in how different U.S. consular posts around the world manage company registrations. Some posts do not manage them at all and require the submission of extensive corporate documentation with every E visa application. Other posts will not require the submission of corporate material for any additional employees applying for E visas during the company registration validity period. Some posts may require the submission of annual updates to maintain the company registration.

Even if the company has a valid corporate registration, if there is substantial change in company ownership or operations, there is possibility that the company will lose its qualifications as a Treaty Trader or Investor, and employees will consequently lose their ability to travel using their E visas. For this reason, the U.S. consular post that approved the E visa application should be notified if major changes occur.

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