E 1/E 2: TREATY TRADER / TREATY INVESTOR

E-1 (treaty trader) and E‑2 (treaty investor) visas are issued pursuant to bilateral treaties of friendship, commerce and navigation between the United States and various other countries.  Most Western European countries are parties to such treaties with the U.S.  These treaties provide that the nationals of the treaty country involved may live and work in the United States for employers sharing their nationality in certain specified capacities.  The E visa is the statutory means whereby these treaty provisions are made effective.

The visa (whether E‑1 or E‑2) has several unique features.  First, it is the only nonimmigrant visa to permit employment in the U.S. which does not require the prior approval of a nonimmigrant visa petition by the U.S. Citizenship and Immigration Services (the “CIS”).  (It is, however, possible to apply for E‑1 or E‑2 status by applying directly to the CIS; however, the individual applicant must be physically present in the U.S. to do so.) Direct filing with the Consulate or Embassy speeds up the approval process considerably.  However, since the application has not been “pre‑approved” by the CIS, it is much more closely examined by the staff of the Consulate or Embassy than, for example, a visa application based on an approved L‑1 or H‑1B petition would be examined.  Documentary requirements on E visa applications can be quite rigorous.

The E visas also potentially allow for an indefinite duration of authorized stay in the United States.  The visas themselves are usually issued for a period of five years or less.  However, there is no statutory limitation on the time one may stay in the U.S. in E status.  Thus, the visa may be renewed for similar terms indefinitely so long as conditions of eligibility continue to be met.

Both E visas require that both the employing company and the transferring individual meet certain eligibility requirements.  For the U.S. company to qualify, it must have the same nationality as a U.S. treaty partner, i.e., it must be at least 50% owned by a company which is owned by treaty country nationals or it must be at least 50% directly owned by treaty nationals who are not lawful permanent residents of the U.S.  The individuals who are to be transferred to the U.S. must be of the same nationality as the ultimate owners of the U.S. company, i.e., must be of the same nationality as the treaty partner.

The two subcategories of E visas differ in the eligibility requirements.  In the case of the E‑1 (a treaty trader) visa, the U.S. company must document that it is engaged in “substantial trade” between the U.S. and the treaty country.  Substantial trade does not refer so much to a dollar level of trade as to regular and frequent trade in goods or services.  The trade between the U.S. and the treaty country must account for more than 50% of the U.S. company’s trading revenues.

In the case of the E‑2 (treaty investor) visa, the foreign parent (whether company or individual investors) must have made a “substantial investment” in the U.S. company.  The term “substantial investment” escapes precise definition and no minimum dollar amounts have been set.  However, the State Department does define substantial investment as a bona fide or real, active commercial or entrepreneurial undertaking, which produces a service or commodity, rather than a marginal enterprise.  The U.S. company must employ some U.S. workers.  The State Department also uses a proportionality test, which weighs the investment against the total value of the business or the usual amount needed for successful similar businesses to determine whether a substantial investment has been made.  Small‑ and medium‑sized businesses should generally plan to invest at least half of the value of the business or the usual amount required to start up similar businesses.  Investment funds may be borrowed so long as the investor (and not just the U.S. subsidiary) is liable for the debt.  Representatives of the U.S. Department of State in Austria and the United Kingdom tend to be more demanding on this point than in many other countries.

The individuals who are to come to the U.S. must come as executive, manager or essential skills employees.  The executive and manager classifications require broad discretionary authority over either the entire operation or a distinct division thereof.  The essential skills employee should have special qualifications that make the services he will render essential to the efficient operation of the enterprise.  Mere technicians rarely qualify for E visas except in start‑up situations, and then for only a short period of time.  Essential skills employees may have difficulty obtaining a visa for longer than a few years.