The E-2 Treaty Investor classification is a temporary, non-immigrant visa that allows a national of a treaty country to be admitted to the United States for the purpose of investing a substantial amount of capital in a new or existing business.
A 'treaty country' is a country with which the United States maintains a treaty of commerce and navigation. Note that not all countries fall into this category and a national of a country not considered a treaty country will not be permitted to apply for E-2 Treaty Investor status. A current list of treaty countries can be found here.
Qualifications for E-2 Treaty Investor Status
To qualify for E-2 Treaty Investor status, the applicant must:
- Be a national of a country with which the United States maintains a treaty of commerce and navigation,
- Have invested, or be actively in the process of investing, a substantial amount of capital in a bona fide enterprise in the United States,
- Be seeking to enter the United States solely to develop and direct the investment enterprise. This is established by showing at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.
An 'investment' for the purposes of E-2 classification refers to the investor's placing of capital, including funds and/or other assets, at risk in the commercial sense with the objective of generating profit. The capital must be subject to partial or total loss if the investment fails.
A 'substantial' amount of capital is defined as:
- Substantial in relationship to the total cost of either purchasing an established enterprise or establishing a new one,
- Sufficient to ensure the treaty investor's financial commitment to the successful operation of the enterprise,
- Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise. In other words, the investment must be substantial enough to motivate the investor to actively run the business and not use it simply for immigration purposes.
a 'bona fide' enterprise is defined as an enterprise that is a real, active and operating commercial or entrepreneurial undertaking which produces services or goods for profit. It must meet the applicable legal requirements of doing business within its jurisdiction.
Marginal Enterprises
One area where many enterprises fail to qualify for E-2 status is in whether they are considered 'marginal' or not. A 'marginal' enterprise is one that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. In other words, will the business generate enough income to pay the living expenses of the investor and his or family and bring in enough profits to put back into the U.S. economy?
Note that the primary purpose of establishing investment-based immigration classifications is to help bolster the U.S. economy by allowing foreign entrepreneurs to bring the business experience and talents to the United States. An enterprise that gives nothing back to the U.S. economy (aside from the goods or services it produces) will likely not be seen as a benefit. This does not mean, however, that an enterprise necessarily has to be bringing in substantial profits. When making a determination, visa officers take into account the type of business and the market for similarly-situated businesses in the United States. If the business has the potential to make profits similar to those already in existence, then it will likely not be considered marginal. Furthermore, given that new businesses rarely make profits immediately, visa officers generally allow for some leniency when it comes to profits the first time an E-2 application is submitted. It is in visa renewals that the issue of profitability becomes an issue.
E-2 Treaty Investor Employees
In some cases, employees of an E-2 Treat Investor may accompany their employer to the United States. To qualify for E-2 status, the employee must:
- Be the same nationality as the principal E-2 employer,
- Meet the definition of an 'employee' under the relevant law,
- Either be engaging in duties of an executive or supervisory character, or if employed in a lesser capacity, have special qualifications.
Note that if the principal alien employer for purposes of E-2 employee status is not an individual, it must be an enterprise or organization at least 50% owned by persons in the United States who have the nationality of the treaty country. These owners must be maintaining non-immigrant treaty investor status. If the owners are not currently in the United States, they must be qualified such that they could obtain E-2 Treaty Trader status if they came to the United States.
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