An Overview of Treaty Traders: E-1 Visas
Privileges
• You can work legally in the U.S. for a U.S. company for whom more than 50% of its business is trade between the U.S. and your home country.
• Visas can be issued quickly.
• You may travel in and out of the U.S. or remain here continuously until your E-1 visa expires.
• There is no legal limitation on the number of extensions that may be granted. Because of the initial duration of an E-1 visa (two years) as well as the limitless extensions, E-1 visas can allow you to live in the U.S. on a prolonged basis, provided you continue to maintain E-1 qualifications.
• Visas are available for accompanying relatives and your spouse can get a permit to accept employment in the U.S.
Limitations
• Visas are available only to nationals of countries having trade treaties with the U.S.
• You are restricted to working only for the specific employer or self-owned business that acted as your E-1 visa sponsor.
• Visas can initially be approved for up to two years. Extensions of up to two more years at a time may be allowed.
• Accompanying relatives may stay in the U.S. with you, but your children may not work, unless they qualify to do so in their own right.
A. How to Qualify
There are no quota restrictions for E- 1 visas. U.S. filed applications are usually approved within two to four months. Applications made at U.S. consulates are usually approved and visas issued within four to eight weeks. There are several requirements for qualifying for an E- 1 visa.
Requirement 1. Citizen of a Treaty Country
E- 1 visas are available to citizens of only selected countries which have trade treaties with the U.S. and wish to come to the U.S. to carry on trade between the U.S. and their home country. Those countries with treaties currently in effect are:
Argentina, Australia, Austria, Belgium, Bolivia, Bosnia & Herzegovina, Brunei, Canada, Colombia, Costa Rica, Croatia, Denmark, Estonia, Ethiopia, Finland, France, Germany, Greece, Honduras, Iran, Ireland, Israel, Italy, Japan, Jordan, Korea (South), Latvia, Liberia, Luxembourg, Mexico, Netherlands, Norway, Oman, Pakistan, Paraguay, Philippines, Slovenia, Spain, Suriname, Sweden, Switzerland, Taiwan, Thailand, Togo, Turkey, United Kingdom, Yugoslavia.
Because treaty provisions are subject to change, we must check prior to application to be sure our client’s country has one in force before proceeding with your application.
Requirement 2. Company Owned by Citizens of a Qualifying Country
To qualify for an E- 1 visa, our client must be coming to the U.S. to trade on behalf of or develop and direct the operations of a business, at least 50% of which is owned by citizens of your treaty country. The company may be owned by our client or others. If the company is owned in part or in whole by others, and some or all of them already live in the U.S., those people may need to have E- 1 visas themselves before the company can act as an E- 1 sponsor for our client.
Specifically:
• At least 50% of the company must be owned by citizens of a single trade treaty country, and
• the owners from the single trade treaty country must either live outside the U.S. and be classifiable for E- 1 status or live inside the U.S. with E- 1 visas.
This second condition can be a little confusing and we at Sayer Regan Thayer & Flanagan work with our clients to clarify their petitions.
(Additionally, USCIS’s regulations allow a different test in the case of large multinational corporations in which it is difficult to determine ownership by stock ownership. Therefore, in the situation where a corporation’s stock is sold exclusively in the country of incorporation, it may be presumed to have the nationality of the country where the stocks are exchanged.)
Requirement 3. You Must Be a 50% Owner or Key Employee
E- 1 visas may be issued only to the principal owners or key employees of the qualifying business, provided all have the same treaty nationality. To qualify as a principal owner, you must control at least 50% of the company, possess operational control through a managerial position or similar corporate device, or be in a position to control the enterprise by other means. To qualify as a key employee you must be considered an executive, supervisor, supervisory role executive, or person whose skills are essential to the enterprise.
a. Executives and Supervisors
For E-2 classification purposes, the main thrust of the position must be executive or supervisory, and give the employee ultimate control and responsibility for the operation of at least a major part of the enterprise. USCIS will examine the following to determine whether a given position fits the bill:
• An “executive” position is normally one that gives the employee great authority in determining policy and direction of the enterprise;
• “supervisory” positions normally entail responsibility for supervising a major portion of an enterprise’s operations and do not usually involve direct supervision of low-level employees, and
• whether the individual applicant’s skills, experience, salary, and title are on a par with executive or supervisory positions, and whether the position carries over all authority and responsibility in the overall context of the enterprise, such as discretionary decision making, policy-setting, direction and management of business operations, and supervision of other professional and supervisory personnel.
b. Essential Employees
USCIS’s regulations are vague on what constitutes the essentiality of an employee. The employee’s skills do not have to be unique or “one of a kind” but they should be indispensable to the success of the investment. They will be evaluated on a case-by-case basis. However, if the skills possessed by the employee are commonplace or readily avail able in the U.S. labor market, it will be difficult to show that the employee is essential.
Specifically, USCIS will consider the following to determine whether an individual who is a non-executive, non-supervisor and who is not at least a 50% owner, should be classified as an E-2 employee because of the essentiality of his or her skills:
• The degree of expertise in the area of operations involved; the degree of experience and training with the enterprise
• Whether U.S. workers possess the individual’s skills or aptitude
• The length of the applicant’s specific skill or aptitude
• The length of time required to train an individual to perform the job duties of the position
• The relationship of the individual’s skills and talents to the overall operations of the entity, and
• The salary the special qualifications can command. Knowledge of a foreign language and/or culture will notby itself constitute the degree of essentiality required.
Requirement 4. Fifty-One Percent of the Company’s Trade Must be between the U.S. and Your Home Country
More than 50% of the company’s trade must be between the U.S. and the treaty nation citizen’s home country. For example, if you are from the U.K. and are in the business of importing English antiques to the U.S., more than 50% of your inventory, as measured by its cash value, must have been imported directly from the U.K. If some other company does the importing and your business simply buys the British goods once they reach the U.S., you will not qualify for the visa, because your company is not directly engaged in trade with the U.K.
The law is liberal in its definition of what constitutes trade. The most straightforward example is the import or export of a tangible product, but exchange of monies or services can also qualify. For example, the transfer of technology through scientifically knowledgeable employees or the rendering of services have been recognized as trade. Activities other than the sale of goods that have been officially recognized by the U.S. Department of State as trade for E-1 purposes include international banking, the practice of law, the sale of insurance, the provision of international transportation, the sale of communications services, some news gathering activities, and the sale of tickets by tourist agencies.
Requirement 5. Substantial Trade
A company must be carrying on a substantial amount of trade between the U.S. and the home country in order for the company to successfully support your E-1 application. The term “substantial” is not defined in the law by a strict numerical measure. In fact it is not specifically defined at all, though USCIS regulations state that there must be a “continuous flow” of trade items between the two countries.
What is considered substantial depends on the type of business. For example, a business that imports heavy machinery may not have to show a huge number of sales, but will have to show a greater dollar volume of business than a business importing candy bars to meet the requirement of substantial trade.
There are three general tests—dollars, volume, and frequency—that can normally be relied on to measure substantiality. The company must be able to meet the minimum standards of all three.
a. Dollar Amount of Trade
The dollar amount (not the retail value) of the inventory, services, or other commodities purchased from or sold to the treaty country should exceed $200,000 per year. However, some consulates require the sales or purchases to equal or exceed as much as $500,000, while others may accept as little as $50,000. A specific sum is not written into the law. The individual consul officer has the authority to require varying amounts in different cases. Still, experience shows that anything under the $200,000 mark is a weak case.
b. Volume
If the company sells products, to satisfy the volume test, its import or export trade must be enough to create full-time business in the U.S. The company’s initial shipment must fill at least an entire warehouse or retail store. If the company sells services, the volume should be large enough to support the E- 1 visa holder and at least one other worker. Some businesses do not meet the volume test when they are first starting up, but grow to the required size as time goes on. Purchasing a growing business may be one way to fulfill the volume requirement immediately.
c. Frequency
The company must import to or export from the U.S. with sufficient frequency to maintain a full inventory at all times. One shipment is not enough. Importation or exportation must be ongoing.
These measures have been primarily derived from our own experience and not the immigration laws.
It is possible for an E- 1 visa to be approved with a smaller amount of trade than we have described in our three tests. With E- 1 visas, a great deal is left to the judgment of the USCIS or consul officer evaluating the application.
Requirement 6. Intent to Leave the U.S.
E- 1 visas are meant to be temporary! We at Sayer Regan Thayer & Flanagan assist our clients in the interview preparation and petition preparation to insure this fact is evident. At the time of application, you must intend to depart the U.S. when your business there is completed. However, as previously mentioned, you are not required to maintain a foreign residence abroad.
The U.S. government knows it is difficult to read minds. Expect to be asked for evidence showing that when you go to the U.S. on an E-l visa, you eventually plan to leave. In many nonimmigrant categories, you are asked to show proof that you keep a house or apartment outside the U.S. as an indication that you eventually intend to go back to your home country. You do not need to keep a home outside the U.S. to qualify for an E- 1 visa—but it would help, nonetheless. You will certainly be asked to show that you have some family members, possessions, or property else where in the world as an incentive for your eventual departure from the U.S.
Requirement 7. Accompanying Relatives
When you qualify for an E- 1 visa, your spouse and unmarried children under age 21 can also get E- 1 visas by providing proof of their family relationship to you. Your spouse will also be permitted to work in the U.S.
To take advantage of the right to work, your spouse will, after arriving in the U.S., need to apply for a work permit. Sayer Regan Thayer & Flanagan also assists your spouse with their petition.
Treaty Investors: E-2 Visas
Privileges
• You can work legally in the U.S. for a U.S. business in which a substantial cash investment has been made by you or other citizens of your home country.
• Visas can be issued quickly.
• You may travel in and out of the U.S. or remain here continuously until your E-2 visa and status expire.
• There is no legal limitation on the number of extensions that may be granted. Because of the two-year initial duration of an E-2 visa, as well as the limitless extensions, E-2 visas can allow you to live in the U.S. on a prolonged basis, provided you continue to maintain E-2 qualifications.
• Visas are available for accompanying relatives and your spouse will be permitted to accept employment in the U.S.
Limitations
• Visas are available only to nationals of countries having trade treaties with the U.S.
• You are restricted to working only for the specific employer or self- owned business that acted as your E-2 visa sponsor.
• Visas can initially be approved for up to two years. Extensions of up to two more years at a time may be allowed.
• Accompanying relatives may stay in the U.S. with you, but your children may not work (unless they obtain their own status and visa to do so).
A. How to Qualify
There are no numerical limits on E-2 visas. U.S.-filed applications are usually approved within two to four months. Applications made at U.S. consulates are usually approved and visas issued within two to four weeks.
Our clients qualify for an E-2 visa if the client is are a citizen of a country that has an investor treaty with the U.S. and you are coming to the U.S. to work for a U.S. business supported by a substantial cash investment from nationals of your home country. You can own the business yourself or you may be a key employee of a business that is at least 50% owned by other nationals of your home country. The investment must be made in a U.S. business that is actively engaged in trade or the rendering of services. Investment in stocks, land speculation, or holding companies does not qualify.
Do not confuse E-2 treaty investor nonimmigrant visas with green cards through investment visa in the EB-5 category. The E-2 visa is a completely different type of visa with completely different requirements. Remember, all nonimmigrant visas are temporary, while green cards are permanent. Moreover, a green card through investment requires a dollar investment of a half a million U.S. dollars or more, while an E-2 visa has different investment amounts.no dollar minimum.
Citizenship in a country having an investor treaty with the U.S. is an E-2 visa requirement. Legal residence is not enough. In fact, with the exception of E-2 applicants from the U.K., you need not be presently residing in your country of citizenship in order to qualify for an E-2 visa. When you are a citizen of more than one nation, you may qualify for an E-2 visa if at least one of them has an investor treaty with the U.S.
Finally, in order to get an E-2 visa, you must plan to leave the U.S. when your business is completed, although you are not required to maintain a foreign residence abroad. Furthermore, USCIS regulations state that as long as you intend to depart the U.S. at the end of your stay, the fact that you have an approved permanent labor certification or have filed or received approval of an immigrant visa petition should not by itself be a reason to deny your application. However, the State Department’s regulations merely state that the intent to depart the U.S. at the end of E-2 status is required without specifically referring to the allowance for permanent residence petitions. We find this means that E-2 applications requested at a foreign consulate will demand a higher standard of proof that you will depart, and may still deny your visa if you’re separately applying for permanent residence.
To summarize, there are six requirements for getting an E-2 visa:
1. You must be a citizen of a country that has an investor treaty with the U.S.
2. You must be coming to work in the U.S. for a company you own or one that is at least 50% owned by other nationals of your home country.
3. You must be either the owner or a key employee of the U.S. business.
4. You or the company must have made substantial cash investment in the U.S. business.
5. The U.S. business must be actively engaged in trade or the rendering of services.
6. You must intend to leave the U.S. when your business there is completed.
Requirement 1. Citizen of a Treaty Country
E-2 visas are available to citizens of only selected countries that have investor treaties with the U.S. Those countries with treaties currently in effect are:
Albania
Finland
Pakistan
Argentina
France
Panama
Armenia
Georgia
Paraguay
Australia
Germany
Philippines
Austria
Grenada
Poland
Azerbaijan
Honduras
Romania
Bahrain
Iran
Senegal
Bangladesh
Ireland
Slovenia
Belgium
Italy
Slovak Republic
Bolivia
Jamaica
Spain
Bosnia & Herzegovina
Japan
Sri Lanka
Bulgaria
Jordan
Suriname
Cameroon
Kazakhstan
Sweden
Canada
Korea (South)
Switzerland
Colombia
Kyrgyzstan
Taiwan
Congo (Brazzaville)
Latvia
Thailand
Congo (Democratic
Liberia
Togo
Republic of Kinshasa)
Luxembourg
Trinidad and
Costa Rica
Mexico
Tobago
Croatia
Moldova
Tunisia
Czech Republic
Mongolia
Turkey
Ecuador
Morocco
Ukraine
Egypt
Netherlands
United Kingdom
Estonia
Norway
Yugoslavia
Ethiopia
Oman
Additional treaties are pending and will go into effect within the next several years.
Requirement 2. Company Owned by Citizens of a Qualifying Country
To get an E-2 visa, our clients must be coming to the U.S. to work for a business that is at least 50% owned by citizens of our client’s treaty country. The company may be owned by the client or others. If the company is owned in part or in whole by others, and some or all of them already live in the U.S., those people may need to have E-2 visas themselves before the company can act as an E-2 sponsor for the client.
Specifically:
• At least 50% of the company must be owned by citizens of a single investor treaty country, and
• The owners from the single investor treaty country must both live outside the U.S. and be able to be classified as treaty investors or live inside the U.S. with E-2 visas.
Requirement 3. You Must Be a 50% Owner, or Supervisor, Executive, or “Key Employee”
E-2 visas may be issued only to the principal owners or key employees of the qualifying business, provided all have the same treaty nationality. To qualify as a principal owner, you must own at least 50% of the company, possess operational control through a managerial position or similar corporate device, or be in a position to control the enterprise by other means. To qualify as a key employee you must be considered an executive, supervisor, someone in a supervisory role, or person whose skills are essential to the enterprise.
a. Executives and Supervisors
For E-2 classification purposes, the main thrust of the position must be executive or supervisory, and give the employee ultimate control and responsibility for the operation of at least a major part of the enterprise. USCIS will consider the following to determine whether a given position fits the bill:
• An “executive” position is normally one that gives the employee great authority in determining policy and direction of the enterprise;
• “supervisory” positions normally entail responsibility for supervising a major portion of an enterprise’s operations and do not usually involve direct supervision of low-level employees, and
• whether the individual applicant’s skills, experience, salary, and title are on a par with executive or supervisory positions, and whether the position carries over all authority and responsibility in the context of the enterprise, such as discretionary decision-making, policy-setting, direction and management of business operations, and supervision of other professional and supervisory personnel.
b. Essential Employees
USCIS regulations are somewhat vague on what constitutes the essentiality of an employee. The employee’s skills do not have to be unique or “one of a kind” but they should be in dispensable to the success of the investment. They will be evaluated on a case-by-case basis. However, if the skills possessed by the employee are commonplace or readily available in the U.S. labor market, it will be difficult to show that the employee is essential.
Specifically, USCIS will consider the following to determine whether an individual who is a non-executive, non- supervisor and who is not at least a 50% owner, should be classified as an E-2 employee because of the essentiality of his or her skills:
• The degree of expertise in the area of operations involved
• The degree of experience and training with the enterprise
• Whether U.S. workers possess the individual’s skills or aptitude
• The length of the applicant’s specific skill or aptitude
• The length of time required to train an individual to perform the job duties of the position
• The relationship of the individual’s skills and talents to the overall operations of the entity, and
• The salary the special qualifications can command.
Knowledge of a foreign language and/or culture will not by themselves constitute the degree of essentiality required.
Requirement 4. Substantial Investment
A substantial cash investment must be made in the U.S. business in order for the business to successfully support an E-2 visa application. The term substantial is not defined in the law by a strict numerical measure. In fact it is not specifically defined at all. At a minimum, the investment must produce a return that is much higher than a mere in come to support you and your family. What is considered substantial depends on the type of business. For example, an automobile manufacturer will have to show a greater dollar amount of investment than a retail toy store in order to meet the requirement of substantial investment.
There are three general tests—dollars, capitalization, and jobs—that, in our experience, can normally be relied on to measure substantiality. The investment must be able to meet the minimum standards of all three.
a. Dollar Amount of Investment
The dollar amount of the cash business investment should normally exceed $200,000. However, some consulates require as much as $500,000 or more, while others may accept an investment of less than $100,000. A specific sum is not written into the law. The individual consular officer has the authority to require varying amounts in different cases depending on the type of business. Still, our experience at Sayer Regan Thayer & Flanagan shows that anything under the $200,000 mark is a weak case and any client wanting to proceed with an investment below that amount has to be warned of the inherent risk of failure.
In order for investment dollars to be counted into the total amount, they must be spent on the U.S. business. Money invested in a house to be used as the investor’s residence will not be considered when a decision is made on whether or not the investment meets the dollar requirement. Mortgage values and other borrowed money can be included in the dollar totals. If borrowed funds make up the investment, the investor must be personally liable for the debt or it must be secured by personal assets. Capital investment must be irrevocably committed to the venture, al though the investor may utilize escrow as a way of protecting him or herself against loss of capital in case the visa is not issued.
b. Capitalization
To satisfy the capitalization test, the investment must be large enough to start and operate a business of the type in which the investment is made. This means that different dollar amounts of capitalization will be considered sufficient in different cases. A restaurant, for example, needs a large enough investment to furnish the restaurant, buy, build, or lease the actual restaurant building, pay wages until the business generates enough income to support its staff, purchase food, and pay for initial advertising. The $200,000 minimum dollar amount mentioned above may or may not be enough, de pending on the size and type of restaurant. On the other hand, if the business will be the construction and management of a shopping center or office complex, several million dollars may be necessary to adequately capitalize such a project. An investment is not considered substantial unless it is large enough to capitalize the venture properly, so that it has a realistic chance of success.
The investment amount must also be substantial in proportion to the overall cost of the enterprise. USCIS uses an “inverted sliding scale” for this determination: the lower the total cost of the enterprise, the higher the investment must be in order to qualify, and vice versa.
c. The Investment Must Not Constitute a “Marginal Enterprise” and Job Creation
A business investment will not be considered substantial for E-2 visa purposes if the business is likely to generate only enough income to support the owners and their families. The business should operate at a sufficient volume to make hiring Americans necessary, and the cash flow should be large enough to pay their salaries. Regardless of the dollars invested, a small family-operated business, such as a retail store, will rarely qualify to support E-2 visa applications if jobs are created only for the owners.
USCIS’s regulations place a burden on the investor to show a business plan that indicates that the business will provide more than a subsistence living for the investor starting five years after the onset of normal business activities.
These measurement tests have been derived from our own experience at Sayer Regan Thayer & Flanagan. Please note these tests are not all set forth in immigration law. It is possible for an E-2 visa to be approved with a less substantial business investment than we have described in our tests. With E-2 visas, a great deal is left to the judgment of the USCIS or consular officer evaluating the application. It is just that our clients have benefited from addressing the above criteria in their petitions.
Requirement 5. Active Business
The investment must be in a for-profit business that is actively engaged in trade or the rendering of services, which meets the applicable legal requirements for doing business in the state or region. Investment in holding companies, stocks, bonds, and land speculation will not support an E-2 visa application, since they are not considered “active.”
The test is whether or not the business requires active supervisory or executive oversight on a day-to-day basis. Clearly, retail, wholesale, and manufacturing operations require such supervision, while stock purchases and land speculation do not. There are some types of investments, especially in real estate, where the line between a qualifying and non-qualifying business investment is difficult to draw.
For example, if you purchase and rent out a single home or duplex, this is not the type of investment that will support E-2 visa application, even if the dollar amount is adequate. If you purchase and rent out an eight- or ten-unit apartment building, that is probably a marginal case. As the number of rental units becomes greater, the need for daily management increases, and the case for an E-2 visa be comes stronger.
Requirement 6. Intent to Leave the U.S.
E-2 visas are meant to be temporary. At the time of application, you must intend to depart the U.S. when your business there is completed. As previously mentioned, you are not required to maintain a foreign residence abroad. Furthermore, USCIS regulations state that as long as you intend to depart the U.S. at the end of your stay, the fact that you have an approved permanent labor certification or have filed or received approval of an immigrant visa petition should not by itself be used as a reason to deny your application. However, the State Department’s regulations merely state that the intent to depart the U.S. at the end of E-2 status is required, without specifically referring to the allowance for permanent residence petitions. This may mean that E-2 applications requested at a foreign consulate will demand a higher standard of proof that you will depart, and may still deny visas where permanent residence is contemplated. Remember, all nonimmigrant visas are intended to be temporary.
The U.S. government knows it is difficult to read minds. Expect to be asked for evidence showing that when you go to the U.S. on an E-2 visa, you eventually plan to leave. In many nonimmigrant categories, you are asked to show proof that you keep a house or apartment outside the U.S. as an indication of your intent to eventually go back to your home country. You do not need to keep a home outside the U.S. to qualify for an E-2 visa—but it would help. You will certainly be asked to show that you do have some family members, possessions, or property elsewhere in the world as an incentive for your eventual departure from the U.S. Sayer Regan Thayer & Flanagan is commited to our client’s successfully demonstrateing their intent to return.
Requirement 7. Accompanying Relatives
When you qualify for an E-2 visa, your spouse and unmarried children under age 21 can also get E-2 visas by providing proof of their family relationship to you. Your spouse, but not your children, will be permitted to accept employment in the U.S.
To take advantage of the right to work, your spouse will, after arriving in the United States, need to apply for a work permit. Sayer Regan Thayer & Flanagan will assist our client’s and their families achieve their immigration goals.
Please contact me with any and all U.S. immigration questions which you may have.
Sincerely,
Frank Flanagan
www.srtfimmigration.com