E Visas

The E visa is broken down into two categories, namely, Treaty Traders and Treaty Investors E visa holders may enter the U.S. with a visa and remain for periods authorized by the Department of Homeland Security.

Treaty Traders.

The E-1 category is reserved for treaty traders. To get the visa there must be a treaty of trade and commerce between the non-citizen’s home country and the U.S. and the individual or company must have the nationality of the treaty country. The list of countries with which the United States has a treaty of trade and commerce that entitles their nationals to apply for E-1 status can and does change from time to time. The best way to determine whether your country’s nationals are entitled to apply for E-1 status is to visit the U.S. State Department web site and check their list of current treaty investor countries The list is broken down into both treaty trader (E-1) and treaty investor (E-2) categories.

The E-1 category requires that there be substantial trade between the U.S. and the treaty country. The trade must be ongoing and continuous. This means that 50% of the company’s international trade must be between the U.S. and the treaty country. Trade includes the sale, exchange or purchase or goods or services. It also includes the transfer of technology and contracts that are binding and call for the immediate exchange of items of trade. In terms of the transfer of technology, the foreign national should consider export controls and consult with an export controls lawyer prior to undertaking any transfer. CILG has referral sources to meet the client’s concerns on export controls.

An individual securing the E-1 visa status will be either the principal trader or an executive, manager or employee who possesses special skills that are essential to the company.

It should also be noted that each U.S. Embassy or Consulate may well have their own desired format for arrangement of the visa filing and their own specific guidelines for processing. At CILG we assist investors in formulating and executing the desired strategy to meet their needs in securing an E-1 visa.

Treaty Investors.

The E-2 category is reserved for treaty investors. To get the visa there must be a treaty of trade and commerce between the non-citizen’s home country and the U.S. and the individual or company must have the nationality of the treaty country. The list of countries with which the United States has a treaty of trade and commerce that entitles their nationals to apply for E-2 status can and does change from time to time. The best way to determine whether your country’s nationals are entitled to apply for E-2 status is to visit the U.S. State Department web site and check their list of current treaty investor countries. The list is broken down into both treaty trader (E-1) and treaty investor (E-2) categories.

An E-2 visa is available to those who invest substantial capital in a bona fide enterprise in the U.S., and who are seeking to come to the U.S. to direct and develop the enterprise.

If the investment that you make in the U.S. Company passes some crucial tests then you would be issued an E-2 visa. The investment must be substantial. There is no minimum or magic dollar amount that must be invested in order to meet the definition of substantial. However, in order to be substantial the investment must meet what is called the “proportionality” test. The proportionality test will require the consular official to look at the amount invested and (1) compare it to the cost of an already established business of its type, or (2) compare it to the cost of establishing a new business of its type.

The consular official is going to view the proportionality test on a sliding scale, which basically means the official will conclude that the more expensive the business is to buy or start the less percentage you need to invest. The U.S. Department of State’s Foreign Affairs Manual (FAM) governs the issuance of E-2 visas and gives a few examples of what the sliding scale looks like. The FAM states:

“(1) A newly-created business, e.g., a consulting firm, might only need $50,000 investment to be set up and to become fully operational. As this cost figure is relatively low, a higher percentage of investment is anticipated. An investment approaching 90-100% would easily meet the test.
(2) A business costing $100,000 might require an investment of 75-100% to meet the test.
(3) A small business costing $500,000 would demand generally upwards of a 60% investment, with a $375,000 investment clearly meeting the test.
(4) In the case of a million dollar business, a lesser percentage might be needed, but 50-60% investment would qualify.
(5) A business requiring $10 million to purchase or establish would require a much lower percentage. A $3 million investment might suffice in view of the sheer magnitude of the dollar amount invested.
(6) An investment of 10,000,000 in a $100 million business would qualify based on the sheer magnitude of the investment itself.”
FAM § 41.51, n9.3.

In addition to passing the substantiality test, the investment must meet the marginality test. This means that the amount you invest must be more than is required simply to give an individual an income. Even if the investment is substantial it will not qualify if the marginality test is not passed successfully. The client needs to desire more than simply a living wage.

In addition, the funds invested must be at risk to qualify as an investment. The funds can be by gift, inheritance, or other means, but they must be at risk. An inherited business itself is not an investment. You should also note that a business loan does qualify as an investment, but only if it is considered “at risk”. For instance, a business loan is not considered at risk if the assets of the business secure it because when the assets of the business secure the loan they remove risk. However, if the loan is secured by a home, a vehicle, or even a personal signature guaranteeing liability then the funds are considered invested for purposes of the regulations.

It should also be noted that each U.S. Embassy or Consulate may well have their own desired format for arrangement of the visa filing and their own specific guidelines for processing. At CILG we assist investors in formulating and executing the desired strategy to meet their needs in securing an E-2 visa.

Visas and I-94’s, Periods of Stay and Extensions of Stay.

An E visa holder must intend, absent extensions of stay, to depart the U.S. upon expiration of the visa. It is important (as with other nonimmigrant categories) to remember that the Department of State issues the visa. The Department of State usually issues E visas with a five year validity date. It is also important to note that although the visa from the Department of State is the ticket into the United States, the U.S. Department of Homeland Security (DHS) determines how long the E visa holder is allowed to stay in the United States in one stretch. The permission to remain in the U.S. in E status is shown on the I-94 card issued to the E visa holder upon arrival at the border with their visa. Even though the visa is valid for five years, each E visa holder is issued an I-94 that is valid for two years at a time and can be renewed. At the present time there is no legal restriction on the number of extensions that can be obtained on an E visa.