The E-2 visa for treaty investors is a non-immigrant visa available to foreign nationals from certain countries who wish to enter the United States (or adjust status in the United States) in order to develop and manage a business enterprise with which they have a substantial investment.
There are several requirements in order to be eligible for the E-2 visa. First, the applicant must be from a country with a treaty agreement with the United States. The list of countries is long and includes Mexico, Turkey, Egypt, Argentina, Japan, Australia, Canada, Israel, and most European and Central American countries among others. Second, the investment must be substantial and committed. Third, the investor must plan to establish an active business enterprise. Fourth, the investor must be in a role that is managerial or supervisory in nature.
The substantiality test is not exact, but the amount of investment must be enough to ensure that the investing visa applicant is financially committed to the success of the enterprise. Additionally, the source of investment funds must be the visa applicant's own funds.
The E-2 visa for investors or employees initially grants a two year stay in the United States; however, there is no limit as to how many extensions are available to the visa applicant as long as the applicant continues to meet the visa requirements.
The E-2 principal investor must have the nationality of the treaty country (listed below), or be a qualifying employee of an enterprise at least 50% owned by persons of such nationality. The nationality of dependents is irrelevant to their classification, and the spouse of an E nonimmigrant may apply for work authorization.
If the employer is a corporation or other business organization, the majority ownership (at least 50%) of the business must be by aliens who are of the same nationality as the employee and who, if not residing abroad, are maintaining status under section 101(a)(15)(E) of the Immigration and Nationality Act. An alien who is a lawful permanent resident of the U.S. does not qualify to bring employees into the U.S. under INA 101(a)(15)(E). Shares of a business owned by lawful permanent resident aliens cannot be considered in making determinations of majority ownership by nationals of the treaty country.
The application process for the E-2 nonimmigrant visa does not require a separate petition, therefore, E-2 status may be obtained either directly through the Department of State (by applying for an E-2 Visa), or in the case of an alien already in the U.S., by applying to the appropriate service center for a change of status. Supporting documents to be submitted with the E-2 application include documents to establish the nature of the employment and the ownership of the enterprise, and source of investment funds.
Several cases have dealt with the substantiality test for the investment amount. In one case, E-2 status was denied where the total value of the enterprise was $64,000 and the applicant invested only $10,000, but alleged that at some unspecified future time he would increase his investment to more than 51% of the enterprise. The U.S. Government ruled that the applicant had failed to establish that his investment did not represent a “small amount of capital in a marginal enterprise solely for the purpose of earning a living”, as required by the federal regulations. Whether the investment is marginal is always a big issue with E-2 cases.
Substantiality test focuses on whether the amount of the E-2 funds compared to the total cost to purchase or create the enterprise is substantial. Also, the amount must normally be considered sufficient to ensure the investor’s financial commitment to the business.
If the business is a small or medium sized business, the funds must be proportionally larger compared with the total cost of starting or buying the business.
Decisions have established that mere intent to invest does not meet the requirements of the law. An applicant was denied E-2 treaty investor status where the applicant’s only showing was that he intended to invest $10,400 on deposit in a savings account in a shoe manufacturing business. The applicant must show more than a subjective intention to invest. Although an investor may have invested in the past, that does not establish that s/he will invest funds in the future.
The E-2 investment funds must be put at risk under the Foreign Affairs Manual. The capital must be subjected to partial or total loss if enterprise is unsuccessful. Mortgage debt or commercial loan secured by the business’s assets is not sufficient. Inheriting a business is not sufficient to qualify.
Placing funds in escrow pending approval of the E-2 nonimmigrant visa is permissible, even if the escrow instructions state that funds are protected if E-2 is denied.
Employment duties of the E-2 employee must provide the employee ultimate control and responsibility for the enterprise’s overall operation or a major component of it. Adjudicating officers considering an E-2 application will consider whether executive provides authority to determine policy and direction, whether E-2 employee supervises a significant portion of the operation, whether supervisor oversees low-level employees, experience of E-2 employee, salary and position title, organizational structure of company and E-2 employee’s position and discretionary decision-making power among other factors.
Several precedent decisions have clarified which employees are considered to be working in an executive or supervisory capacity. In one case, the managerial employee charged with the training or instruction and supervision of entertainers and waiters in a theater restaurant was not considered to be employed in the “responsible capacity” as required by the federal regulations.
An applicant who would be supervising and training American workers as tempura cooks at a Japanese restaurant and assisting in the preparation of meals during the training period was deemed inadmissible as an E-2 employee because he will not be employed in a “responsible capacity.”
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