Treaty Trader Investors (E-1/E-2)

The Treaty Trader (E-1) and Treaty Investor (E-2) categories are intended to promote the admission of individuals, their families, and certain of their employees into the U.S. in order to pursue trade or investment opportunities created by a treaty of Friendship, Commerce and Navigation ("FCN") between the U.S. and the individuals' country of nationality. The U.S. has entered FCN treaties with over 50 countries that recognize Treaty Trader opportunities, and with 80 countries that recognize opportunities for Treaty Investors. See State Department List.

Unlike many other categories, Treaty Traders & Investors may self-petition for admission, and require neither a U.S. sponsor nor a foreign employer seeking to establish a U.S. presence. It is therefore well suited to entrepreneurs from a growing number of countries.

Treaty Traders

E-1 status requires that the holder will be: (1) solely engaged in carrying out international trade of a substantial nature, (2) on her own behalf or that of her employer, (3) between the U.S. and her country of nationality, and (4) will depart the U.S. at the duration of the authorized stay. The USCIS definition of "trade" is not particularly helpful - the international exchange of the recognized subject a of trade agreements ("trade items") on a contract basis between the U.S. and the treaty country. Examples of "trade items" include:

The trade must be "international", "substantial", and "principally" between the U.S. and the holder's country of nationality. Domestic U.S. transactions do not count toward meeting the requirement. "Substantial trade" requires a sufficient quantity of international transactions to ensure a continuous flow of traded goods and services between the U.S. and the treaty country. USCIS rules apply no minimum gross proceeds of the trade, but note that a holder would probably meet the threshold if business was sufficient to support the treaty trader and her family. The trade activity must also produce a number of transactions rather than be limited to a single contract, regardless of its size or scope. Additionally, if more than 50{877c034753eacee7259c3c97ae2e02ad1f8f94c95ed6455a0455c04073043e02} of the volume of the trade is between the U.S. and the treaty trader's country of nationality, the "principally" requirement is met.

Treaty Investors

Like E-1s, the E-2 visa is limited to nationals of treaty countries. The investment can be in an entity that is partly owned by nationals of other countries (including the U.S.), but nationals of the treaty country must own at least 50{877c034753eacee7259c3c97ae2e02ad1f8f94c95ed6455a0455c04073043e02} of the business in question.

The E-2 visa category requires that (a) the individual has invested (i.e., put at risk) or is actively pursuing investing funds from a legitimate source, (b) which make up a “substantial” investment of capital in a business that is not “marginal” and is “real and active” in the U.S. In addition, (c) the E-2 visa applicant must be seeking admission to “develop and direct” the enterprise, and intend to leave the U.S. at the end of her status.

(A) Investing & Source of Funds

In order to be eligible for an E-2 visa, the E-2 applicant must have already invested or be “actively in the process of investing” funds in a U.S. enterprise, although the investment does not have to be complete at time of visa application.

Funds are considered invested or in the process of being invested if:

• The investment funds are in the actual possession and control of the investor (for example, if the funds are coming from a loan, the loan has been executed, or, if the funds a coming from an inheritance, the funds have been fully transferred from the source estate to the investor); and
• The funds are irrevocably at risk, committed to investment in the U.S. business, and subject to partial or total loss if the business should fail.

Mere intent to invest funds sitting in an account is insufficient. There must be some evidence showing irrevocable commitment such that the investor is close to the start of actual business operations. Although the capital must be invested or be in the process of being invested, final commitment of the investment may be conditioned upon the grant of the E-2 visa to the principal and other necessary parties.

There are other requirements that related to the source and form of the investment funds:

• If the funds are from a loan, that loan must be secured by the investor’s personal assets. They cannot be secured by the U.S. business itself.
• The funds cannot have been obtained directly or indirectly from criminal activity.
• Inheritance of a business is not an investment.
• The funds may be from a source already within the U.S.

The burden of showing that the capital meets all these requirements is on the investor and must be shown affirmatively in the petition. The exact form of proofs a potential investor must provide to meet these requirements vary from case to case, but will usually include financial records, contracts, and similar documents.

(B) “Substantial”, “Not Marginal”, and “Real and Active”

To meet the "substantial" capital requirement, the applicant must show the investment is:

• Substantial in proportion to the cost of either buying or establishing the type of business under consideration;
• Enough to ensure the treaty investor's financial commitment to the operation's success; and
• Sufficient to support a likelihood that the investor will successfully develop and direct the operation (with a higher proportionate investment required for lower cost enterprises).

Whether an investment is "substantial" is a highly fact-specific analysis. USCIS looks to actual dollar investment, nature of the business, typical investment expense of comparable businesses, whether revenues from the investment will support the holder and her family, and, if it will not, whether other factors demonstrate that the enterprise will result in other net positive economic benefits, as well as other factors. In general, the higher the amount invested, the more likely the USCIS or a consulate will deem the proposed investment to be “substantial”. However, some cases have been approved with the investment of relatively low levels of capital.

To meet the requirement of showing the business will not be “marginal”, the applicant must show:

• The business has the present capacity to generate more than enough income to meet the minimal living expenses of the treaty investor and their family; or
• The business will, within five years,based on five-year business projections, have the capacity to generate more than enough income to meet the minimal living expenses of the treaty investor and their family.

Like with the “substantial” requirement, whether a business is “marginal” is also a highly fact specific analysis. USCIS will look to whether the investment will create jobs for individuals beyond the investor’s family, whether it will generate other sources of income, whether the income generated will be substantially above what is considered to be minimal living expenses given the size of the investor’s family, and other factors. If the business is not currently generating the required amount of income and lack of marginality, investors must submit a clear, detailed, five-year business plan showing the requirement will be met within that time frame.

The investor must also show the business is “real and active” in that it:

• Actually produces some service or commodity;
• Is for profit; and
• Is organized in a manner consistent with state laws applicable to formation and conduct of business entities.

This excludes investments that are passive, held merely for their potential future value, such as stocks (without involvement in the day-to-day management of the related company) or undeveloped land (with no plan for development as part of the investment). It also excludes investment in non-profits like schools or charitable organizations.

(C) Coming to “Develop and Direct” the Business

The E-2 visa applicant must be coming to the U.S. to work for the business they are investing in controlling position that allows them to develop and direct the enterprise. They cannot be coming to work as a menial or junior employee, although performing some administrative tasks is permissible so long as they are incidental to developing business. Nor may they be coming to work for another company.

What comprises “developing and directing” a business is fact-specific and depends on the nature of the business. USCIS looks to several factors including whether the E-2 applicant:

• Has a controlling interest in the U.S. business; and/or
• Exercises operational control as a manager of the U.S. business.

Employees

The principal trader/investor may employ fellow nationals from the same treaty country in the conduct of the enterprise, who will be eligible for E-1/E-2 status provided they are coming to the U.S. to engage in executive or supervisory activities within the enterprise. Alternatively, they are also eligible for E-1/E-2 status if they have special qualifications that make their service essential to the efficient operation of the enterprise. All employees' activities must be solely dedicated to the E-1/E-2 enterprise and they must express an intention to depart the U.S. at the end of their authorized term of stay.

E1/E-2 status may also extend to employees of U.S. enterprises which are at least 50{877c034753eacee7259c3c97ae2e02ad1f8f94c95ed6455a0455c04073043e02} owned by individuals who are either in the U.S. in E-1/E-2 status or are outside the U.S. but are eligible for E-1/E-2 status (and are able to meet all the other requirements described above). In effect, this permits status through joint ventures.

Dependents

The spouse and minor children of the E-1/E-2 (whether the E-1/E-2 is a principal or an employee) may accompany or follow to join and receive the same classification as the E-1/E-2. The dependents’ nationality is irrelevant. The spouse may be employed while in the U.S. in E-1/E-2 dependent status upon obtaining employment authorization documents, and need not be employed in the same enterprise as his spouse. Children may not work, but may attend school without changing status.

Dual Intent

Individuals in E-1/E-2 status may petition to adjust to permanent residence status provided they maintain intent to depart the U.S. at the end of their nonimmigrant status.

Duration of Status

E-1/E-2 investors and traders and their dependents will be granted an initial stay of two years which may be extended in two year increments for as long as the principal can demonstrate conformance to the conditions of her trader/investor status, was physically present in the U.S. at the time of the filing of the extension application, and has not abandoned the extension request by, e.g. leaving the U.S. without advanced parole.