E-1 And E-2 Visas
The E-1 nonimmigrant visa is intended to permit foreign nationals of specified treaty countries to enter the United States to engage in international trade between the visa holder’s county and the United States, while the E-2 nonimmigrant facilitates foreign nationals of specified treaty countries to invest capital in a new or existing U.S. business enterprise. While both visas are intended to facilitate trade and investment and stimulate the U.S. economy, this intention is at times undermined by the complex rules and procedures involved in the visa application process.
(1) Existence of Treaty of Commerce and Navigation
The E-1 and E-2 nonimmigrant visa classifications are only available to foreign nationals of countries with which the United States maintains a “treaty of commerce and navigation.” These treaties, some of which date back to the 19 th century, may allow citizens of the treaty country to apply for both E-1 and E-2 visas or one or the other. Currently, the following countries maintain a treaty of commerce and navigation with the United States:
Both E-1 and E-2 visas:
Argentina, Australia, Austria, Belgium, Bolivia, Bosnia and Herzegovina, Canada, Chile, Taiwan, Colombia, Costa Rica, Croatia, Denmark, Estonia, Ethiopia, Finland, France, Germany, Honduras, Iran, Ireland, Italy, Japan, Jordan, South Korea, Kosovo, Latvia, Liberia, Luxembourg, Macedonia, Mexico, Montenegro, Netherlands, Norway, Oman, Pakistan, Paraguay, Philippines, Poland, Serbia, Singapore, Slovenia, Spain, Suriname, Sweden, Switzerland, Thailand, Togo, Turkey, and the United Kingdom.
E-1 visas only:
Brunei and Greece.
E-2 visas only:
Albania, Armenia, Azerbaijan, Bahrain, Bangladesh, Bulgaria, Cameroon, Congo (Brazzaville), Congo (Kinshasa), Czech Republic, Ecuador, Egypt, Georgia, Grenada, Jamaica, Kazakhstan, Kyrgyzstan, Lithuania, Moldova, Mongolia, Morocco, Panama, Senegal, Slovak Republic, Sri Lanka, Trinidad, Tunisia, and Ukraine.
In some cases, country specific conditions apply that may limit the eligibility of citizens to apply.
Dual citizenship and other citizenship issues may also affect eligibility.
(2) Application Procedures
Due to a quirk in the U.S. immigration law, the U.S. Department of State does not recognize approvals of E-1 or E-2 petitions issued by U.S. Citizenship and Immigration Services (USCIS). Thus, unlike other nonimmigrant visas situations, where the visa applicant presents the USCIS approval to a U.S. embassy or consulate for visa issuance, an individual who obtains USCIS approval for an E-1 or E-2 visa will have to apply for the visa a second time upon his or her next trip outside the United States. Careful advance planning is always advisable when applying for visas, but the dual jurisdiction of USCIS and Department of State over E-1 and E-2 visas makes it especially important.
(3) Substantiality of Trade or Investment
(A) E-1 Visa: Nature of Trade and Substantial Trade Requirements
The E-1 visa is intended for an individual who intends to carry on “substantial trade” between the United States and the treaty country of which he or she is a citizen. Importantly, at least 50% of the total volume of international trade must be between the U.S. and the E-1 visa holder’s country.
The term “trade” is generally considered to mean the international exchange of items of trade for consideration between the United States and the treaty country and includes a wide range of business activities such as trading of goods and services, international banking, insurance, transportation, tourism, technology and its transfer, and in some cases news-gathering activities.
No specific monetary value or volume of trade defines “substantial trade.” Instead, the term refers to the continuous flow of sizable international trade items involving numerous transactions over time. Both the Department of State and USCIS will determine substantiality of trade on a case by case basis and place more emphasis on the number of exchanges over time than on the monetary value of individual transactions.
As an illustration, we successfully represented an Australian music company in the E-1 visa applications of its executive personnel. The company’s international trade was roughly 60% with the U.S. and 40% between the U.K., New Zealand, and Canada. A large segment of the company’s business involved bringing American artists to perform at large venues in Australia.
The visa applications were carefully documented with contracts, invoices, bills of lading and other documents focusing on the value of the U.S. artist contracts, which totaled several million dollars annually. The U.S. consulate agreed that the concerts equated to the trade in services and registered the company for E-1 trader status.
(B) E-2 Visa: Develop and Direct, At Risk and Substantial Investment Requirements
In order to qualify for E-2 visa classification a national of a treaty country must have invested, or be actively in the process of investing, a substantial amount of capital in a bona fide investment enterprise in the United States and be seeking to enter the United States solely to develop and direct this enterprise.
With regard to the “develop and direct” requirement, the investor must show that he or she maintains at least 50% ownership of the enterprise or, in some cases, possesses operational control of the investment enterprise via a management agreement or other corporate device.
Further, the enterprise must be a real, active and operating commercial or entrepreneurial enterprise producing goods or services for profit and must meet all applicable legal requirements for doing business within the U.S. state(s) it is operating. A marginal investment, which generally means one that lacks the present or future capacity (within five years) to generate more than enough income to provide a minimal living for the treaty investor, will not sustain an E-2 visa.
An “investment” is considered to be the investor’s placing of capital, which can include monetary funds and/or other assets, “at risk in the commercial sense with the objective of generating a profit.” Thus, the investor’s capital must be subject to partial or total loss if the investment enterprise fails.
Like “substantial trade” in the E-1 visa context, the concept of “substantial capital” in the E-2 visa context is not defined as a specific amount. The government will analyze the substantiality of the investment on a case by case basis, considering the amount of the applicant’s investment in relation to the total cost of either purchasing an established U.S. enterprise or establishing a new one, whether the investment is indicative of the applicant’s commitment to the successful operation of the enterprise, and whether the investment is sufficient to demonstrate that the applicant is likely to successfully develop and direct the enterprise. Thus, an investment amount that works in one case may not be sufficient in another.
As examples of successful E-2 applications, we represented a citizen of the United Kingdom who had invested in a Central Florida construction firm. The client and the U.S. ownership entered into an agreement under which the British investor purchased 51% of the company for approximately $200,000 and assumed the role of president of the company. In another recent case, an Irish investor obtained an E-2 visa through his purchase of commercial properties in Orlando, Florida for approximately $600,000 and the subsequent establishment of a property management company to oversee the leasing and maintenance of these properties.
(4) Employees of E-1 and E-2 Enterprises
In certain cases employees of the treaty trader or investor may also qualify for an E-1 or E-2. In order to qualify, an employee must (i) be of the same nationality as the principal E-1 or E-2 visa holder, and (ii) be an employee of the trader or investor engaged in duties of an executive or supervisory character or in cases involving non-managerial personnel, have special qualifications related to the company’s goods or services.
There are several considerations in determining whether or not an employee of a trader or investor will qualify for an E-1 or E-2. These include whether or not the employer is an individual or business, the nature of the duties of the employee, the employee’s employment history with the principal and the citizenship of the employee. Careful analysis of an individual employee’s qualifications is advisable before applying for an E-1 or E-2 visa for him or her.
(4) Duration of Stay and Family Members
The specific duration of an E-1 or E-2 visa is determined by the reciprocity table in place for the visa holder’s country, but the maximum duration is five years with visas typically issued in two year increments. Importantly, there is no maximum duration for either visa and both can be renewed indefinitely so long as the visa holder maintains his or her eligibility for the classification.
Spouses and unmarried children under 21 of E-1 and E-2 visa holders are also eligible for E-1 and E-2 classification even if they are not of the same nationality as the principal visa holder. Spouses of the principal E-1 or E-2 visa holder are eligible for employment authorization during their authorized stay and may work without restrictions upon issuance of employment authorization by USCIS.
In the current economy there are many businesses opportunities in the United States, many of which will support a successful E-1 or E-2 visa. Further, the E-1 and E-2 visas are both good vehicles for start-ups. Our attorneys have extensive experience representing individuals and small and mid-sized companies in E-1 and E-2 visa matters. We encourage you to contact us with your questions about the process.