E-2 INVESTOR NONIMMIGRANT VISA EXPLAINED
Rev 2-24-2005
The list of E-2 treaty countries has been amended to add recently signed free trade agreements with Chile and Singapore.
General explanation
Section 101(a)(15)(E)(ii) of the Immigration and Nationality Act (INA) provides treaty investor nonimmigrant status for a national of any of the countries with which an appropriate treaty of commerce and navigation exists.
An individual who wishes to go to the USA to develop and direct the operations of an enterprise in which he/she has invested, or is actively in the process of investing, a substantial amount of capital may apply for a treaty investor visa (E-2). Under this category, unlike the L-1 category, it is not necessary to maintain a business outside the USA and also because, unlike L-1 status, E-2 visas can be renewed every five years without limits.
The E-2 visa classification was established to give effect to those treaties between the United States and certain foreign countries that provide reciprocal benefits to nationals of each country who invest in the other country.
The E-2 investor visa is available to an applicant who invests a substantial amount of his/her own money into a U.S. business which he can and wishes to control and direct. The investment can be to purchase an existing business or to start up a new one.
Requirements for an E-2
Applicant has invested, or is actively in the process of investing
Key factors in determining whether the applicant has invested, or is in the process of investing are:
Possession and control of the assets invested. The applicant needs to show that the assets or funds invested are in his/her name and they have control over them. (an inherited business is not an investment.)
The investment must be “at-risk”. To be “at-risk” the investment funds must be subject to loss if the business fails. Indebtedness secured by the assets of the business is not considered “at-risk” in this sense. “At-risk” funds include only funds in which personal assets are involved.
Funds must be irrevocably committed.
Examples of irrevocably committed funds are funds held in escrow pending issuance of the visa and funds already paid for the purchase of the business.
Examples of funds which are not irrevocably committed are uncommitted funds in a bank account and prospective investment arrangements involving no present commitment.
To satisfy this requirement the applicant must provide documents which indicate that the applicant has already committed these funds to the business and that these funds are under his/her control.
Also, the investor must document the source of these funds (i.e. loan, sale of assets, bank account, etc.). Please provide documents tracing the flow of funds from their source to the business (example: canceled checks deposited in business checking account) and from the business to the investment (example: canceled checks showing purchase of buildings, land, equipment, etc.). Always provide loan and mortgage documents and note whether the loan is secured by the business.
Enterprise is a real and operating commercial enterprise.
This means that speculative investments held for potential appreciation in value do not qualify.
Non-profit organizations also do not qualify.
Applicant must submit documents which show the business is actually operating (invoices, payroll, bill payments, tax returns).
Applicant’s investment is substantial.
The issue of whether an investment is “substantial” is complex and proportional. It’s generally defined as the amount invested, weighed against the total value of the enterprise for established businesses, or the amount normally considered necessary to establish a viable enterprise for a new business. As a rule of thumb, the minimum value of the business should be no less than $100,000 and the alien E-2 investor must have invested no less than 95% of his foreign capital in the business enterprise.
The determination whether an investment is substantial consists of the following:
Application of the proportionality test.
The proportionality test is a comparison of the total cost of the enterprise (the purchase price of an existing business or the cost of making a newly-created business operational) and the amount of qualifying funds invested.
The lower the cost of the business, the higher the percentage of qualifying funds invested needed to qualify.
Determining whether the funds are sufficient to ensure the investor’s commitment to the successful operation of the enterprise and to its development and direction.
To satisfy this requirement, the applicant should submit documents indicating the purchase price of the business or, if a new business, the expenses necessary to make the business operational. The consulate will use these documents and the documents submitted regarding the actual investment to determine whether the business satisfies this requirement.
For those investments that are not 100%, the higher the cost of the business, the greater the amount of financing against the business assets is allowed. The State Department has published an illustrative sliding scale as follows:
Total Cost of Business percentage at risk
$ 50,000.00 100%
$ 100,000.00 75 to 100%
$ 500,000.00 60%
$ 1,000.000.00 50 to 60%
$ 10,000.000.00 30%
$ 100,000.000.00 10%
Please note that it is rare that an investment of less then 100,000.00 (and 95% at risk) would qualify an investor for an E-2 visa.
Investment is more than a marginal one solely for earning a living.
The E-2 visa applicant can show that an investment is more than marginal in one of two ways.
The E-2 visa applicant should submit documents showing that the income derived from the investment exceeds what is necessary to support self and family. Income tax forms from the business and/or income statements prepared by the accountant are useful.
Failing this test, the applicant can show that the investment has the capacity, present or future, to make a significant economic contribution to the community. In this vein, the E-2 visa applicant should submit documents that show the number of workers the business will employ, now and in the future.
5. Applicant is coming to the U.S. to “develop and direct” the enterprise.
This can be fulfilled by providing a brief narrative showing that the applicant will be engaged in the day-to-day operations of the business.
6. The applicant, if an employee, is destined to an executive/supervisory position or possesses skills essential to the firm’s operations in the U.S.
To bring an employee into the USA, the E-2 visa applicant must meet all of the following criteria:
a. The prospective employer must meet the nationality requirements as described above,
b. The employer and employee must have the same nationality, and
c. The employer, if not resident abroad, must be maintaining E-2 status in the USA
An executive or supervisory position is one which entails a high degree of responsibility for the enterprise’s overall operations and the executive or supervisory element is the primary function of the job. In other words, please include a brief narrative which describes the job position, specifically addressing these issues, and which explains why the prospective employee is qualified for this job.
An essential employee is one without whom the applicant would not be able to do business in the USA. The burden of proof clearly lies with the applicant to prove that the prospective employee is essential. Again, the E-2 applicant should provide a brief narrative showing that the employee merits consideration as essential.
7. Applicant intends to depart the United States when the E-2 status terminates.
The E-2 visa applicant must include a short statement to this effect.
Documentation
1. Proof of source of funds (copies of checks, transfers, etc.)
2. Personal financial statement (details assets and other income sources)
3. Beneficiary’s resume showing work experience and education relevant to U.S. operation:
4. Copy of passport (biographic pages and all visa stamps) of visa applicant and of any other owner to prove nationality (as per applicable country treaty)
5. Business plan outlining current and future investment scheme
6. Amount invested to date in and size of the U.S. company and value of the business
–cost of materials
-cost of employee wages – Quarterly wage statements
-cost of legal, professional fee, and/or licensing fees
-asset purchase and sale agreements
-mortgage or loan agreements
-contracts or letters of understanding between the treaty enterprise and customers and/or suppliers
7. Tax ID (federal and state, if any) numbers for U.S. company
8. Description of stock ownership of U.S. company and copies of share certificates showing ownership of corporation
9. Complete copies of Articles of Incorporation of U.S. company
10. Bylaws, Shareholder Agreements and other relevant corporate documents for U.S. company
11. Sample invoices, contracts, etc. establishing the nature of the business activity and showing a regular course of business
12. Occupational License, Permit, Zoning documents (if applicable) for the U.S. company
13. Lease for U.S. company location or deed of real property
14. Job title and description of duties of investor and employees of U.S. company
15. Salary and other compensation of employees of U.S. company (e.g. health insurance, etc.)
16. Current or anticipated number of employees of U.S. company
17. Anticipated or current gross and net annual income of U.S. company
Treaty Countries
The following countries have E-2 Treaty Investor Status: Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia & Herzegovina, Bulgaria, Cameroon, Canada, Chile, China (Taiwan), Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa Rica, Croatia, Czech Republic, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Grenada, Honduras, Iran, Ireland, Italy, Jamaica, Japan, Jordan, Kazakhstan, Kyrgyzstan, Latvia, Liberia, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Morocco, Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Senegal, Singapore, Slovak Republic, Slovenia, South Korea, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom and Yugoslavia.
Spouse of E-2 can work in USA
A spouse of an E-2 visa holder can work with an employment authorization document. Spouses must file an I-765 application with a regional service center along with proof of the spouse’s visa status.