E-2, Treaty Investor
The nonimmigrant E classification is reserved for nationals of countries with which the U.S. has a treaty of commerce and navigation or equivalent agreement. In the case of the E-2, they are coming to the U.S. to the U.S. to actively invest in a real and operating commercial enterprise. An applicant may qualify as the investor or as an employee of a qualifying trading company only if he possesses the same nationality as the company.
Dependent spouses and children of E-2 investors are ordinarily accorded E-2 status as well, regardless of nationality. E-2 spouses (but not children) may apply for unrestricted employment authorization following entry to the U.S. in E-2 status.
Following are the basic requirements for E-2 classification, as laid out in 9 FAM 41.51 Notes.
- Requisite treaty exists
Individual and/or business possesses the nationality of the treaty country. The individual’s nationality can be documented through his passport. If the applicant is a dual national, the passport used for the visa application controls his nationality for the purpose of the E visa travel.
The organization’s nationality is the nationality of its individual owners of the business. Nationals of the treaty country must own at least 50 percent of the business in question. In cases where a corporation is sold exclusively on a stock exchange in the country of incorporation, typically one can presume that the nationality of the corporation is that of the location of the exchange.
One cannot qualify for an E-2 visa as an employee of a treaty trader where the employer, if an individual, is present in the US in some status other than E-2. The same applies in the case of a corporate employer, where more than 50% of the individuals who own the employer are residing in the United States in some capacity other than E-2.
Applicant has invested or is actively in the process of investing. In order for the activity to be considered an “investment,” the applicant must be using funds he has legally obtained, whether through savings, as a gift, an inheritance or by winning the lottery. The source of the funds must be fully documented. In addition, the applicant must be placing those funds at risk in a commercial sense in the hope of earning a financial return. The funds may be derived from a loan but only if the applicant is personally at risk. Therefore, loans obtained against the collateral of the investment itself are not qualifying funds for E-2 purposes, but a second mortgage on the applicant’s home would be considered investment funds.
If the applicant has not already invested the funds in the enterprise, they must be irrevocably committed. The Foreign Affairs Manual, at 9 FAM 41.51 N8.1-3, does permit that a purchase of a business which qualifies for E-2 status in every respect may be conditioned upon the issuance of the visa. In such an arrangement, funds would be held in escrow for release or transfer only on the condition of E-2 visa issuance being met.
- Investment is in a real and operating commercial enterprise. In other words, the organization must produce a service or commodity and not be a mere speculative investment held for potential appreciation in value, such as undeveloped land. The nature of the enterprise can be established through a business plan, business licenses, and marketing materials if it is a new enterprise or, for more established enterprises, through business transaction records, tax return, employee payroll records, invoices from suppliers, utility bills, etc.
- Investment is substantial & not marginal. A substantial investment is one that will ensure that the enterprise is not merely speculative or one that will merely support the investor and his/her family, but will also provide jobs for U.S. workers and services or goods that enrich the community. The amount of capital needed depends on the type of business. The larger the sum required to the total cost of purchasing an established enterprise or creating the type of enterprise under consideration, the smaller the percentage of start-up capital is required to ensure the investor’s commitment to the success of the business. By the same token, if the investor seeks to purchase or create an enterprise that does not cost much to start up (such as a consulting firm), the investor would be required to demonstrate that he is investing a much higher percentage of the total start-up costs.
Applicant will either develop & direct the enterprise; will act in an executive/supervisory position or possesses “essential skills” to the enterprise.
E-2 investors who will develop and direct are the investors themselves who seek to run their own investment enterprise. They must own at least 50% of the shares of the enterprise. They are the founders of their companies. They may also seek E-2 visas on behalf of their employees to enter in executive/supervisory roles or as essential skills employees.
Executive or supervisory duties grant the employee ultimate control and responsibility for the enterprise's overall operation or a major component thereof. An executive position provides the employee great authority to determine policy of and direction for the enterprise. A supervisory position grants the employee supervisory responsibility for a significant proportion of an enterprise's operations and does not generally involve the direct supervision of low-level employees.
In order to qualify as an executive or supervisory employee, the executive or supervisory element of the employee' position must be a principal and primary function of the position and not an incidental or collateral function.
In determining whether the proposed position is executive or supervisory, consular officers will consider the title of the position, its place in the company's organizational structure, the duties of the position, the degree to which the applicant will have ultimate control and responsibility for the company's overall operations or a major component thereof, the number and skill levels of the employees the applicant will supervise, the level of pay, and whether the applicant possesses qualifying executive or supervisory experience.
If the employee seeks E visa classification to fill the role of an “essential employee” for a treaty trader company, the applicant must establish at the time of application not only the need for the special qualifications that he or she offers but also the length of time that such skills will be needed. In general, the E classification is intended for specialists and not for ordinary skilled workers.
Special qualifications are those skills and/or aptitudes that an employee in a lesser capacity brings to a position or role that are essential to the successful or efficient operation of the enterprise. The essential nature of the alien's skills to the employing firm is determined by assessing the degree of proven expertise of the alien in the area of operations involved, the uniqueness of the specific skill or aptitude, the length of experience and/or training with the firm, the period of training or other experience necessary to perform effectively the projected duties, and the salary that the special qualifications can command.
There are two distinct types of essential skills workers: (a) short-term essential skills workers, and (b) long-term essential skills workers. In the case of short-term essential workers, the employer may need the skills for only a relatively short period of time when the purpose of the employee's admission relates to start-up operations (of either the business or a new activity by the business) or to the training and supervision of technicians employed in manufacturing, maintenance and repair functions. Ordinarily skilled workers can qualify as essential employees but this almost always involves workers needed for start-up or training purposes.
A new business or an established business expanding into a new field in the United States might need employees who are ordinarily skilled workers for a short period of time. Such employees derive their essentiality from their familiarity with the overseas operations rather than the nature of their skills.
Employers in such cases are expected to train United States workers to replace these employees, usually within one or two years. Short-term essential skills workers are therefore in a less desirable position than L-1B specialized knowledge workers, who are not required to demonstrate that U.S. workers will be trained to replace them.
Long-term essentiality may be established in connection with continuous activities in such areas as product improvement, quality control, or the provision of a service not generally available in the United States. If an applicant establishes that she has special qualifications and, on a long-term basis, these qualifications are essential for the efficient operation of the treaty enterprise, the training of United States workers as replacement workers is not required. It should therefore be possible for such an employee to remain in the United States in E-2 status, for an indefinite period of time.
E visas are typically issued with a 5 year validity period. However, the E-2 visa holder ordinarily is admitted for a period of up to two years (but not for more than 6 months beyond the passport expiration date). Each time the visa holder travels abroad and reenters the US during the visa validity period, he usually is admitted for a fresh 2 year period. There is no limit on the number of extensions or the total time a nonimmigrant may remain in E status.
USCIS may extend E status in increments of up to two years without limit on the number of extensions. However, USCIS can only approve extensions of stay and if someone with a USCIS E-1 extension travels abroad, he must still apply for a new E-2 visa if he does not current visa in his passport, and the U.S. consulate abroad will readjudicate E-2 visa eligibility. Therefore, where there are certain situations in which it makes sense to apply for E-1 extension with USCIS due to timing issues, it is usually best to apply for a new E-2 visa abroad rather than filing a petition with USCIS.