Updated: December 12, 2017
2. Treaty Traders (E-1) and Treaty Investors (E-2)
The ‘E’ visas are available to otherwise eligible citizens of countries such as the UK with which the United States has a qualifying treaty of Friendship, Commerce and Navigation or a Bilateral Investment Treaty. A periodically-updated list of the countries whose citizens may qualify for E visas is found in the US Department of State’s Foreign Affairs Manual, at 9 FAM 402.9-10. As set forth below, E visas are available both to the business owner/investor, and to certain qualifying employees.
The E-1 ‘treaty trader’ visa is available to qualified persons who seek to enter the US solely to carry on an already existing, substantial trade in goods, services or technology principally between their home country and the United States. Because the E-1 visa requires that the trade be both already existing and substantial, it is not an option for a start-up company.
The E-2 ‘treaty investor’ visa is available to qualified persons who seek to develop and direct a business in which they have invested (or are actively in the process of investing) a substantial amount of capital. Under appropriate conditions E-2 treaty investor registration may be granted to a start-up business.
E-1 and E-2 visas are also available to a qualified prospective employee of a treaty trader or treaty investor if the employee is of the same nationality as the trader or investor and either (a) an executive or supervisor, or (b) a skilled worker with special qualifications that are essential to the efficient operation of the US enterprise.
The spouse of an E-1 or E-2 visa holder, and unmarried children under the age of 21, regardless of their nationality, are also eligible for E-1 or E-2 visas. After entry to the US on an E-1 or E-2 visa the spouse may apply for an unrestricted work permit and may commence employment as soon as the authorization has been granted.
The E-2 has been used by countless British investors to buy a business in the US, or start their own business, and to reside indefinitely in the US until treaty status terminates. However, the criteria are strict. Under the regulations set out in the Department of State’s Foreign Affairs Manual, the would-be E-2 visa applicant must show that he has made or is in the process of making a ‘substantial investment’ in a business in the United States, that the business will not be marginal, and that it is not speculative.
The process for obtaining either an E-1 or E-2 visa at the US Embassy in London begins with registering the enterprise. Only after the enterprise has been approved and registered will the individual investors be considered for visas. A list of the proof and requirements for enterprise registration with the US Embassy in London can be found on the Embassy’s web page entitled ‘Treaty Trader or Treaty Investor’. Particularly burdensome is the requirement that for every expenditure the investor wishes to have counted toward his ‘substantial investment’ the investor must provide cancelled cheques or payment orders from an identifiable source with corresponding bank statements proving actual payment to an identifiable beneficiary.
Unlike other visas such as the L-1 or H-1B, the E-1 and E-2 visas have no maximum period of stay. Subject to periodic re-registration of the treaty enterprises with the US Embassy in London, and renewal of visas thereafter, business owners may live in the US in E status as long as they remain in status and continue to be in a position to develop and direct their business. The principals’ children, however, cease to be eligible for visas through their parents once they either turn 21 or marry.
Neither the E-1 nor the E-2 visa offers the owner of a business an easy transition to permanent residence. Unless the E visa holder/business owner is eligible for immigrant status as an EB-1-3 applicant (see previous article), he or she must, to obtain permanent residence through the US business, obtain a ‘labor certification’ as a pre-condition to filing for immigrant status. The labor certification process requires a test of the labor market and a demonstration that, after a period of advertisement of the prospective immigrant’s position, no one minimally qualified for the job applied.
Persons who own a substantial percentage of a business or are related to the owners by blood, marriage, friendship or financial dealings may find it difficult to obtain a labor certification. This is because the employer always has the burden of convincing the Department of Labor that the position that is the subject of the labor certification is a bona fide job opportunity available to US workers.
Before committing substantial funds to a business, whether by purchasing an existing business or creating a new one, an investor should seek independent advice both as to whether the investment is advisable, given the investor’s financial situation, and whether the planned investment is likely to qualify for E-2 registration. Applicants should never rely on prospective business partners for immigration advice.
For a further discussion of the benefits of an E-2 registration, you may wish to read our article E-2 Visas: Better than L-1s?