The E-2 Treaty Investor Visa: Show Me the Money!

The E-2 Treaty Investor Visa: Show Me the Money!
by: Atty. Robert L. Reeves
1. What is the history behind the E-2 visa?

The United States Congress created a provision in the Immigration and Nationality Act of 1952 permitting certain foreign nationals who invested in the United States to obtain a temporary work visa, now known as the E-2 visa, “to develop and direct the…enterprise which he or she has invested.” The U.S. had to have a treaty with the country the foreign national was from, now most commonly called a bilateral investment treaty. Today, there are over 50 foreign countries that have signed treaties with the U.S., including Germany, Japan and the Philippines. Not only do individual investors qualify for the visa, but also certain employees of businesses who are investing in the United States may also qualify.
2. What are the requirements and terms of the E-2 visa?

A foreign national must meet several requirements in order to qualify for an E-2 visa. First, and foremost, the foreign national’s country must have a treaty with the U.S. Some countries, such as the China, do not have treaties with the U.S. and therefore its citizens cannot apply for an E-2 visa. Second, the individual investor or the employee of the business investing must be of the same nationality as the foreign country. Therefore, if a Filipino company were trying to qualify its General Manager, a Chinese national, to run its newly created business in the U.S., it would be unable to do so. Third, the applicant must have already committed its money to the investment. Therefore, a showing that the investor has already signed a lease for the office in the U.S. or purchased inventory for the business might meet this requirement. Fourth, the investment made in the United States must be an active and operating enterprise. The investor cannot simply deposit a large sum of money in a U.S. bank or make a passive investment such as real estate to qualify for an E-2 visa. Fifth, the amount must be substantial. Sixth, the applicant must be in position to control the enterprise, which is usually, but not always, demonstrated when the applicant or the sponsoring business owns at least 50 percent of the U.S. investment.

In addition, if a company is involved and its employee is trying to apply for the E-2 visa, the employee must be coming to work in the U.S. in either an executive or managerial position or a position requiring specialized knowledge. Thus, if a person is not coming to head the U.S. office or a department or to assume a position with similar duties, then he or she should be coming to train U.S. employees or transfer specialized or proprietary knowledge that he learned with the foreign company to the U.S. enterprise in order to qualify.

The E-2 visa is a nonimmigrant visa that allows for an initial 2-year period of entry into the U.S. and permits an unlimited number of 2-year extensions. The benefit of the E-2 visa is that upon entry into the U.S., the foreign national will automatically be readmitted for a period of 2 years under E-2 visa status, as long as the visa stamp is still valid.
3. Do I have to invest at least $100,000 to qualify for an E-2 visa?

The short answer is no, an investor does not have to invest a minimum of $100,000 to qualify for an E-2 visa. At the same time, theoretically an investment of $1 million or even $100 million will not guarantee one will qualify for the E-2, though it should improve one’s chances significantly.

As discussed above, the investment must be substantial. However, no set amount has been set by the U.S. government. Instead, a “proportionality test” is employed, in which in the case of an existing business, the amount of money invested is measured against the fair market value of the business at the time of investment. In the case of a new enterprise, the cost of establishing such a business is considered. Also, in the case of individuals, keep in mind that the U.S. investment cannot be a marginal enterprise, i.e. one established solely for the purpose of earning a minimal living for the investor and his or her family. It should be an enterprise that earns a significant income, or has the potential for significant growth.

Practically though, the larger the investment, the more likely the stronger your case will be for an E-2 visa. Given the myriad factors and considerations involved with the E-2 visa, it may be in an investor’s best interest to consult with an immigration attorney familiar with E-2 treaty investor visas to determine whether they qualify.