The E-1 & E-2 Visa for Treaty Traders & Investors

The E visa category is useful for business owners, managers, and employees who have the same nationality as the foreign parent company and who are either working to engage in trade with the United States or to set up a business on U.S. soil. E visas allow people to remain in the United States for extended periods of time to run operations requiring a corporate presence beyond that normally granted by B-1 business visitor visa status. As the name implies, E treaty visas stem from Treaties of Friendship, Commerce, or Navigation between the U.S. and a number of foreign nations. These treaties allow nationals of such countries to travel to the U.S. to conduct substantial trade and business-related activities under the Treaty Trader (E-1) and Treaty Investor (E-2) visas.

An important reality of the E-1/E-2 visas is that they do not provide a direct path to permanent residence. While the L-1 visa provides a parallel green card vehicle for multinational executives and managers, the H-1B offers the Labor Certification path, and even the O-1 can segue to green card via extraordinary ability, the E-1 and E-2 visas do not offer easy transitions to a green card. We find clients with E visas continuing their presence in the United States on a long-term basis if the strength of business operations support ongoing approval; we also find clients watching their total investment to see if they reach the EB-5 threshold to convert to a green card when they have invested $900,000 into the business; still others search for a US corporate sale to divest themselves of majority interest so they can be sponsored for a US lawful permanent residence by a non-controlling US entity. In theory, a qualifying foreign national could remain in the U.S. for decades in E-1 status without issue or a need to change or adjust status. But temporary visa status like the E-1/E-2 often means that the children of these individuals that “age-out” of their dependency and either have to return to the home country or change to F-1 Student status.

The “E-1” Visa for Treaty Traders

An individual may obtain E-1 visa status to pursue international trade for a qualifying entity, or on their own behalf as the owner of an entity, that engages in sufficient trade with the United States and their home country. Treaty employees may perform work for a U.S. company in a parent-subsidiary relationship with the foreign treaty company or for an entity as simple as a sole proprietorship.

To qualify for an E-1 Treaty Trader visa, the individual must be a national of one of the countries listed below and the entity registering for E-1 status must be majority owned (50% or more) by individuals who are nationals of the treaty country. The entity must be engaged “trade” – the international exchange of goods, services, technology, insurance, etc. – between the treaty country and the U.S. There are two additional qualifications: (1) the trade must be substantial, meaning a continuous flow of numerous transactions over time, and (2) the trade must be principally with the United States (50% or more of the business value or number of transactions). Proving this trade will involve submitting executed contracts, bills of lading, invoices, etc. to trace the flow of the trade from one country to another. US immigration favors systematic trade over sporadic, high-value transactions.

When a qualifying E-1 company sends an employee, the individual must be a national of the treaty country, be a genuine employee (as opposed to an independent contractor), and they must be engaged in executive or supervisory employment or possess critical proprietary knowledge. The nature of the employment is often scrutinized, as the E-1 is intended for individuals who have ultimate control and primarily responsibility for the business’ operation and/or its major components. Direct supervision of low-level employees is a red flag as the position should focus on policy and engagement with delegation of derivative duties to others.

To clear the threshold for use by employees who work in a unique capacity, the E-1 visa application must clearly identify company need, the employee’s proprietary expertise, and the presence of such skills in the U.S. from available US workers. Like the L-1B for intracompany transfers with specialized knowledge, a significant amount of preparation and framing of the employee’s qualifications is required to obtain an E-1 visa for a special employee because of unique regulatory requirements.  

The method for obtaining E-1 status is to either apply for an E-1 visa at a consulate overseas or to apply from within the United States through USCIS. The validity period of E-1 status is two years at a time and E-1 status can be extended continuously as long as trade and employment requirements are maintained. Spouses and unmarried children under age twenty-one may obtain E-1 derivative status; dependents do not have to be the same nationality as the principal E-1 visa holder.

As of January 1, 2020, the following countries have active treaties with the United States for E-1 purposes: Argentina, Australia, Austria, Belgium, Bolivia, Bosnia & Herzegovina, Brunei, Canada, Chile, Colombia, Costa Rica, Croatia, Denmark (excluding Greenland), Estonia, Ethiopia, Finland, France (including Martinique, Guadeloupe, French Guiana and Reunion), Germany, Greece, Honduras, Iran, Ireland, Israel, Italy, Japan, Jordan, Korea (South), Kosovo, Latvia, Liberia, Luxembourg, Macedonia, Mexico, Montenegro, Netherlands (including Aruba and Netherlands Antilles), New Zealand, Norway (excluding Svalbard), Oman, Pakistan, Paraguay, Philippines, Poland, Serbia, Singapore, Slovenia, Spain, Suriname, Sweden, Switzerland, Taiwan, Thailand, Togo, Turkey, and United Kingdom (including Channel Islands and Gibraltar; applies only to U.K. nationals & residents).

The “E-2” Visa for Treaty Investors

An individual may obtain E-2 visa status to pursue an active investment opportunity in the United States. To qualify for an E-2 Treaty Investor visa, the individual must be a national of one of the countries listed below. The individual must have invested (or be investing) a substantial amount of capital in a bona fide enterprise in the United States. The investment funds must be legitimately obtained and placed at risk of loss. The individual must then be present in the U.S. to develop and direct the business, of which they will own at least 50% or possess operational control. 

In determining what dollar figure constitutes a “substantial” amount of capital, the primary consideration is the investment amount proportional to the total cost of the enterprise. This total cost includes purchasing an existing business, purchasing a franchise, or starting a new business, as well as the required financial commitment to operate a successful business. For example, purchasing an existing U.S. business for $500,000 would require at least $175,000 of available funds to invest. On the other hand, opting to purchase a franchise opportunity for $60,000 necessitates the entire purchase price be covered, plus initial operating expenses. No matter what the new enterprise in the U.S., it must be successful enough to generate income beyond the individual’s normal living expenses within five years – the E-2 visa is based on the success of the company.

For existing U.S. companies that were built on foreign investment, they may be designated for E-2 status if it is at least 50% owned by nationals of the relevant treaty country who are either maintaining E-2 status in the U.S. or eligible for such status if overseas. Such a company is able to bring employees to the U.S. in executive or supervisory roles, or to fill positions requiring special qualifications.

Whether an individual is directing and developing the new U.S. company, or an executive is being transferred within a qualifying company, the nature of the employment is often scrutinized as the E-2 is intended for individuals who have ultimate control and primarily responsibility for the business’ operation and/or its major components. Direct supervision of low-level employees is a red flag as the position should focus on policy and engagement while delegating derivative duties to other professional employees who are themselves in managerial or supervisory positions. 

In certain cases, an employee working in an especially unique capacity may be eligible for an E-2 visa, which is generally determined by company need, employee expertise, salary, and the presence of such skills in the U.S. Like the L-1B for intracompany transfers with specialized knowledge, a significant amount of preparation and framing of the employee’s qualifications is required to obtain an E-2 visa for a special employee because of unique regulatory requirements.

An individual can apply for an E-2 visa at a consulate overseas or apply from within the United States through USCIS. The E-2 is valid for two years at a time and can be extended continuously as long as the trade and employment requirements are maintained. Spouses and unmarried children under age twenty-one may be afforded derivative status, though they will still receive an E-2 visa as there is not a unique classification for these dependents. Individuals exploring investment opportunities can enter in B-1 status, create a company, hold the investment funds in escrow, and await approval before actually committing the money. Knight Immigration can assist in preparing and filing incorporating documents that meet government requirements and support these immigration filings.

The following countries have active treaties with the United States for E-2 purposes: Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia (expiring 2022), Bosnia & Herzegovina, Bulgaria, Cameroon, Canada, Chile, Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa Rica, Croatia, Czech Republic, Denmark, Ecuador (expiring 2028), Egypt, Estonia, Ethiopia, Finland, France (including Martinique, Guadeloupe, French Guiana and Reunion), Georgia, Germany, Grenada, Honduras, Iran, Ireland, Israel, Italy, Jamaica, Japan, Jordan, Kazakhstan, Korea (South), Kosovo, Kyrgyzstan, Latvia, Liberia, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands (including Aruba and Netherlands Antilles), New Zealand, Norway (excluding Svalbard), Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Senegal, Serbia, Singapore, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Taiwan, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, and United Kingdom (including Channel Islands and Gibraltar; applies only to U.K. nationals & residents).

The CNMI Investor under the E-2 Regulations

The CNMI-Only Investor (E-2C) visa classification allows foreign, long-term investors to remain lawfully present in the CNMI through December 31, 2029, while they resolve their immigration status. This classification is intended to help as the CNMI transitions from the CNMI permit system to U.S. immigration laws.

The Commonwealth of the Northern Mariana Islands (CNMI) is a string of islands in the northwest Pacific Ocean which, along with Guam, represents the western-most territory of the United States. A strategic location for U.S. military bases and exercises, CNMI has long enjoyed special immigration provisions to facilitate the flow of foreign labor into the Commonwealth to supplement the small resident workforce. However, as the territory has developed the special immigration benefits are sunsetting, ushering in a transitional period.

An E-2 CNMI Investor visa requires an individual to (1) have been admitted as a long-term investor in the Commonwealth prior to November 28, 2009, (2) have maintained continuous residence there, and (3) be maintaining the initial E-2 investment. A “long-term” investor is proven by a CNMI business certificate based upon a $50,000 investment, a CNMI foreign investment certificate based upon six-figure investments, or a CNMI foreign retiree investment certificate for individuals over age fifty-five who invested in an approved residence in the Commonwealth (except certain Japanese nationals). The filing window for initial E-2C status has expired but extension applications may still be filed.

The E-2C visa is valid in two-year increments but does not function like other nonimmigrant visas – it can only be used to enter the CNMI, not the United States proper. Likewise, the employment authorization that accompanies E-2C status is only valid and applicable in the Commonwealth. Derivative status may be afforded to spouses and minor children of the principal E-2C visa holder.