E Visa: Traders and Investors
Overview
The E nonimmigrant visa category is reserved for nationals of countries that have treaties of friendship, commerce and navigation or bilateral investment treaties with the U.S. Nationals of treaty countries may enter the U.S. in E status if they fall into one of two subcategories: (1) as a treaty trader if he or she seeks admission solely to carry on substantial trade, including trade in services or technology, between the U.S. and the foreign state of which he or she is a national (E-1 status); or 2) as a treaty investor if he or she is coming into the U.S. to develop and direct the operations of an enterprise in which he or she has invested, or of an enterprise in which he or she is actively in the process of investing a substantial amount of capital (E-2 status).
- An employee of a treaty trader or investor may also be classified as an E visa holder if he or she holds the same nationality as the principal foreign national employer and is seeking admission to engage in executive or supervisory duties, or have special qualifications that are essential to the efficient operation of the enterprise.
- The E visa applicant does not need to document an intention not to abandon the foreign residence. However, an E visa applicant must express an "unequivocal intent to return after the E status ends." The consular officer normally does not require the applicant to prove he or she has a residence abroad to which the applicant intends to return or that he or she will be in the U.S. for a "specific temporary period of time" absent evidence of contrary intent. The applicant needs to satisfy the consular officer that he or she intends to depart the U.S. at the end of E status and not apply to adjust status or overstay the end of E status.
- The spouse and unmarried minor children of a principal E-1 or E-2 visa holder are entitled to E-1 or E-2 classification, without regard to their nationality. E-1 and E-2 spouses may now apply for a work authorization document.
- E visa holder is granted an initial period of admission of two years, renewable for five year indefinitely.
- An E treaty trader or investor may only engage in employment consistent with the terms and conditions of his/her status. Employment is employer-specific.
Nationality
The treaty trader and the treaty investor can be either an individual or a business entity. The treaty trader or investor must, whether an individual or business entity or employee thereof, possess the nationality of the treaty country.
The nationality of a business entity is determined by the nationality of the individual owners of the business. To qualify for E status, at least 50% of the business entity must be owned by nationals of the treaty country. For a corporation, the nationality is determined by the nationalities of the stockholders or, if a publicly traded corporation, where the stock is traded. If an investing entity is owned by another business, then the nationality of ownership must be traced to the owners of the ultimate parent company.
Advantages of E Visa
- Convenient tax advantages for investor. No request to file tax return if 183 day test is not met.
- No need to work in US, just develop and manage enterprise.
- Investor can have family in the US (kids in school, fear of kidnap) and he can continue his investments abroad.
E-1 TREATY TRADER DEFINITIONS
Essential Elements. The treaty trader visa is set aside for firms or individuals who develop and carry on substantial trade between the U.S. and the treaty country. Once the existence of a treaty and nationality test have been met, the essential elements of an E-1 case are:
- The trade must constitute an exchange.
- The trade must be international in scope. This means that the traceable exchange in goods or services must be between the U.S. and the treaty country.
- The international trade must be substantial (numerous transactions) or value/dollar amount. Over 50% of the total volume of international trade by the treaty trader must be between the U.S. and the treaty country.
- The trade must involve qualifying activities. This means the trade must involve the commercial exchange, purchase or sale of goods or services in the marketplace. "Goods" in this context are defined as tangible commodities or merchandise having extrinsic value. "Services" are defined as legitimate economic activities which provide other than tangible goods, such as banking, insurance, tourism, transportation, communications, data processing, advertising, etc.
- The trade must be in existence. Trade between the U.S. and the treaty country must already be in progress by the individual or firm. "Existing trade includes successfully integrated contracts binding upon the parties which call for the immediate exchange of items of trade."
E-2 TREATY INVESTOR DEFINITIONS
Essential Elements. For the E-2 Treaty Investor category, there are five main requirements once the existence of a treaty and nationality tests have been met:
- The investor must have either made a substantial investment, or must prove that he or she is actively in the process of making a substantial investment. The assets, funds or otherwise, must be irrevocably committed to the investment and must be at risk.
- The financial funds may be held in escrow and released on the condition that the E visa is approved. Moreover, in order to qualify as being in the process of investing for E-2 purposes, the applicant must be close to the start of actual business operations.
- If the investor simply intends to invest, has uncommitted funds in a bank account, or is merely at the stage of signing contracts, then his or her investment would not be considered at risk.
- Borrowed funds do not qualify if they are secured by the assets of the U.S. business; loans secured by the personal assets of the investor may be included as part of the investment. A reasonable amount of cash held in a business bank account to be used for routine business expenses may count as investment funds.
- The investment must be "active". This means that the investment must be in a real and active commercial or entrepreneurial enterprise, producing some service or commodity. Uncommitted funds in a bank account or undeveloped land do not represent an active investment, unless other evidence of business activities exists to demonstrate that the funds are used in the routine operation of the business or the land is going to be developed by the business. The commercial enterprise must be for profit.
- The investment must be substantial. There is no set dollar figure for determining if an investment is substantial, rather a proportionality test must be satisfied.
- The proportionality test is a comparison between the amount of qualifying funds invested as compared to the fair market value of the company and the cost of an established business or, if a newly created business, the cost of establishing such a business."
- If the amount invested equals the fair market value or normal cost of establishing such a business, then the investor has invested 100% of the necessary funds. The cost of a new business is the amount of funds needed to establish a business of that type and take it to the point of being operational.
- In addition, the consular officer will determine if the investment is sufficient enough to ensure the investor's commitment to the operation and enough to make it likely the treaty investor will "develop and direct the enterprise."
- The enterprise must be more than marginal. The consular officer will look to see if the enterprise has the future capacity to grow and become profitable. To prove that the enterprise is not marginal, the treaty investor may demonstrate one of the following:
- The investor must show that the enterprise was not created for the sole purpose of earning a living and it must provide more than just enough income to support the investor and his or her family. If the income from the business is more than enough for him/her to make a living, this test is satisfied.
- If the applicant is unable to satisfy the financial test, then the consular officer can look to the economic impact of the business projected out over a five-year period. The treaty investor can show that within five years from the start of business, the enterprise will make a significant economic contribution to the local economy.
- The consular officer may also consider other assets of the investor, including bank and brokerage accounts and real and personal property.
- The investor must have a controlling interest in the enterprise. If the enterprise is a joint venture with each party investing a equal share, then the investor must have retained full management rights and responsibilities to qualify. Equal partnerships with more than three partners will not qualify.
- Nationals of the treaty country must own 50% of the business. In addition, a national or nationals of the treaty country must develop and direct the enterprise.
- If an individual owns the U.S. enterprise and plans to enter the U.S. as a treaty investor or send an individual as an employee of the U.S. enterprise, the owner must show he or she will personally develop and direct the enterprise. If a foreign corporation owns 50% or more of the U.S. enterprise and is sending an employee to the U.S., then the foreign corporation must prove it is developing and directing the U.S. business.
- If a number of treaty country individuals own the U.S. business but cannot show that one individual directs and develops it, the treat nationality owners must show that: (1) they own collectively 50% of the U.S. business and; (2) collectively have the power to develop and direct the U.S. business.
- No matter what the structure of the business, if the investor, either an individual or a business, has managerial control of the business, the control requirement is met. The owner of the business will still be required to demonstrate it is developing and directing the business.
Employer Requirements. An employer in the U.S. needs to satisfy several requirements in order to bring an employee into the U.S. as an E-1 or E-2 treaty employee:
- The prospective employer in the U.S. must be a national of the treaty country. If the employer is an individual, he/she must have the nationality of the treaty country.
- If a corporation, at least 50% of the owners must be nationals of the treaty country. A U.S. permanent resident will not be considered to have the nationality of the treaty country.
- In addition, shares of a business owned by permanent residents cannot be used to determine ownership for nationality purposes.
- The employer and prospective E-2 employee must have the same nationality.
- The employer must be in the U.S. in treaty status or eligible for treaty status if overseas.
Employee Requirement. The employee must be engaged in executive or supervisory duties or have special qualifications that make the employee's services essential to the efficient operation of the enterprise. The consular officer will look to several factors in determining if the skills are specialized and essential:
- The alien's proven expertise in the specialized area
- The uniqueness of the skills
- The proposed job function
- The salary
- How much training would be required to perform the duties
- The availability of U.S. workers with the same skills.