E-2 classification
An investor, that is a “treaty country” national, may be eligible for US admission in the E-2 nonimmigrant classification, where the treaty investor has invested, or is actively in the process of investing, a substantial amount of capital in a bona fide US enterprise—a for-profit, real and actively operating undertaking (entrepreneurial or commercial), which produces goods or services, and satisfies applicable doing business legal requirements in the respective US jurisdiction. The invested capital cannot be a relatively small amount in a marginal enterprise, such as solely for earning a living. The treaty investor must be seeking US entry solely to develop and direct the US enterprise.
Certain employees of the E-2 treaty investor—individuals who will be employed with the US enterprise in executive, supervisory, or essential skills positions—may also be eligible for the E-2 classification, if such individuals share the same treaty country nationality as the E-2 treaty investor.
The E-2 treaty investor as well as E-2 treaty employees may only engage in employment consistent with the underlying activity as well as terms and conditions of E-2 status. All E-2 holders must maintain the intent to depart the US upon E-2 status expiry/termination.
For treaty country nationals, the E-2 classification is generally preferable to the L-1 intracompany classification, as the E-2 classification does not require maintaining a business outside of the US; strict requirements on periods of previous qualifying experience with a foreign operation abroad; or a prior approved nonimmigrant petition filing with US Citizenship and Immigration Services (USCIS). There is also not a general maximum limit on the total aggregate period for E-2 status, in contrast to L-1A (7 years) and L-1B (5 years). The E-2 classification is not available to all foreign nationals though, as the foreign national must be that of a qualifying treaty country.
E-2 Treaty Country
E-2 treaty countries are foreign states which the US maintains a qualifying Treaty of Friendship, Commerce, or Navigation (or its equivalent, such as a Bilateral Investment Treaty or Free Trade Agreement), as well as those foreign states which have otherwise been deemed a qualifying country with treaty visa privileges pursuant to specific legislation.
E-2 Treaty countries include: Albania, Argentina, Armenia, Australia, Austria, Azerbaijan, Bahrain, Bangladesh, Belgium, Bolivia, Bosnia and Herzegovina, Bulgaria, Cameroon, Canada, Chile, China (Taiwan), Colombia, Congo (Brazzaville), Congo (Kinshasa), Costa Rica, Croatia, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Grenada, Honduras, Ireland, Israel, Italy, Jamaica, Japan, Jordan, Kazakhstan, Korea (South), Kosovo, Kyrgyzstan, Latvia, Liberia, Lithuania, Luxembourg, Macedonia, Mexico, Moldova, Mongolia, Montenegro, Morocco, Netherlands, New Zealand, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Portugal, Romania, Senegal, Serbia, Singapore, Slovak Republic, Slovenia, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom, and Yugoslavia.
E-2 Treaty countries do not include: Algeria, Angola, Belize, Botswana, Brazil, Cambodia, China (including Hong Kong), Cyprus, Eritrea, Gabon, Haiti, India, Kenya, Kuwait, Mauritius, Namibia, Nepal, Nigeria, Peru, Qatar, Russia, San Marino, Saudi Arabia, South Africa, Vatican City, Venezuela, Vietnam, Zimbabwe, and UAE, among others.
E-2 Treaty Country Nationality
The authorities of the particular treaty country determine whether an individual is a national of the particular foreign state. This determination will typically be evidenced by the individual holding a valid passport from the respective treaty country. If the person (including spouse) acquired such nationality through financial investment (unless prior to December 27, 2022), the person must have been domiciled in the treaty country for a continuous period of at least 3 year prior to applying for the E-2 classification. A treaty investor who holds U.S. lawful permanent residence does not qualify to bring in employees under the E-2 classification.
To determine the nationality of a business, ownership must be traced to the ultimate owners of the enterprise/organization (must be at least 50 percent treaty country nationals). The country of incorporation is irrelevant; however, if the organization is listed on one country’s stock exchange, the nationality of that country may be presumed (supporting documentation is still necessary to support this presumption though). For determining business nationality, the stock shares owned by a U.S. lawful permanent resident cannot be considered.
E-2 Substantial Investment of Capital in Non-marginal Enterprise
A mere intent to invest, such as prospective investment arrangements without a current commitment, or possession of uncommitted funds in a bank account, are not sufficient to support a qualifying E-2 investment.
To qualify as an E-2 investment, the E-2 treaty investor must have invested, or be in the process of investing, unsecured personal business capital (or capital secured by personal assets, such as second mortgage on a home or unsecured loan) with the profit generation objective, where such capital is irrevocably committed to the enterprise and at risk in a commercial sense—subject to partial or total loss (i.e. unfavorable investment outcome). The invested capital can include funds and other assets (i.e. inventory, equipment, intellectual property, and so on), of which the E-2 treaty investor must have possession and control, where such capital was not obtained through criminal activity (directly or indirectly). Personal loans can be used where not secured by E-2 enterprise assets (including unsecured loans from business partners, family, and friends). The assets/funds can be from savings, inheritance, gifts, contest winnings, and/or other legitimate sources. The source of the assets/funds is a major focus for establishing the lawfulness of obtainment, as well as possession and control for investment.
The E-2 treaty investor has the burden to establish the irrevocably committed nature of the investment capital, where any available legal mechanism may be used for irrevocably committing such investment capital to the enterprise—including for a business purchase, the placement of investment funds in escrow in a pending status, while being subject to the treaty investor’s obtainment of E-2 classification approval and US admission in E-2 status (such mechanism may also help to support personal liability protection if the treaty investor is denied E-2 status). In other situations, the business should already be using the investment, or the business should be very close to business operation commencement, for which the investment will be utilized.
The amount of capital invested, or being invested, must be substantial relative to the total cost of establishing, or purchasing the enterprise, where also sufficient to ensure the E-2 treaty investor’s financial commitment to support the enterprise’s successful operation. Such amount must be of a magnitude to support, that the E-2 treaty investor will, more likely than not, successfully direct and develop the enterprise—where the enterprise’s cost is lower, proportionately, the investment amount must be higher to be considered a substantial capital amount.
There is not a minimum investment dollar amount or definitive percentages that will equate to a qualifying “substantial” investment in all cases. To determine if an investment is substantial, a proportionately test is used to weigh the qualifying funds amount against the business cost—the latter of which depends on the nature of the enterprise. The cost of acquiring a preexisting business will typically be the fair market value of its purchase price; in contrast, the cost of starting a new business will typically be the costs necessary to establish the business to the point of being operational.
For the substantiality determination, a higher percentage of investment is required in relation to the cost of the business being lower. To illustrate, the US Department of State may generally consider investments that constitute 100 percent of the total costs of a business requiring startup costs of $100,000, as being substantial; at the other end of the spectrum, due to investment magnitude, a much larger investment of $10 million in a $100 million business may also be considered substantial. For the avoidance of doubt, the business cost, however, is not itself determinative or independently relevant for the E-2 qualification.
After a successful determination on the substantiality of an investment, for future E-2 applications based on the same investment, it should not typically be necessary for the substantiality to be evaluated again, unless there has been a change in ownership, such as through a business acquisition.
The investment enterprise also cannot be marginal. In other words, the enterprise must have the capacity, present or future—realizable within 5 years from the enterprise’s normal business activity commencement date by the treaty investor, to generate more than sufficient income to provide a minimal living standard for the treaty investor (including family members). As a caveat, an enterprise that does not have income generation capacity, but has the capacity, present or future, to make a significant economic contribution, would not be considered marginal.
E-2 Treaty Investor
To qualify as an E-2 treaty investor, treaty country national(s) must own at least 50 percent of the E-2 treaty enterprise. Further, the treaty country national(s), through ownership or by other means, must develop and direct the E-2 treaty enterprise activities. The E-2 treaty enterprise type will be considered on the issue of whether a particular treaty investor is in a position to “direct and develop” the enterprise.
The E-2 treaty investor, including an E-2 treaty enterprise owner as employee of the E-2 treaty investor, must be seeking admission to the US in E-2 status to solely direct and develop the investment enterprise, based on control of the enterprise—at least 50 percent ownership, operational control as a manager or other corporate device, or by other means. Serving in a managerial position is not sufficient in itself to meet the “direct and develop” requirement, if the treaty investor will not “control” the investment enterprise.
Where treaty country ownership is too diffuse to enable a single person or company to control the E-2 treaty enterprise, the treaty country national owners must still collectively own at least 50 percent of the E-2 treaty enterprise, and have the collective ability to develop and direct the E-2 treaty enterprise. In this type of situation, although a particular owner may not qualify as an E-2 treaty investor, the owner may still be able to obtain an E-2 employee visa, if he or she will serve in the capacity of executive, supervisor, or essential skills employee for the E-2 treaty enterprise.
E-2 Employer
The principal treaty national employer must either be 1) a person in the US holding treaty country nationality, while also maintaining E-2 treaty investor status in the US, or if abroad, would be classifiable as a E-2 treaty investor; or 2) an organization/enterprise at least 50 percent owned by persons in the US that hold treaty country nationality, while also maintaining E-2 treaty investor status in the US, or if abroad, would be classifiable as a E-2 treaty investors.
E-2 treaty employees may be able to perform work for the actual parent treaty organization/enterprise, or any of its qualifying subsidiaries, where the approved E-2 application included evidence of the enterprise/organization and its qualifying subsidiaries—the work location, and that the subsidiaries independently qualify as a treaty organization/enterprise. In the case of an E-2 treaty investor employee, the work responsibilities must require executive, supervisory, or essential skills. Above all, the work to be performed must be consistent with the underlying approved activity for the E-2 classification.
E-2 Executives, Supervisors, and Essential Skills Employees
To qualify for E-2 status as an E-2 treaty enterprise executive or supervisory employee, the treaty country national must be seeking US admission to principally and primarily perform an executive or supervisory position, entailing the employee having ultimate responsibility and control for a major component of the E-2 enterprise or its overall operation.
The required threshold of responsibility and control is based on consideration of whether (as applicable):
· The executive position provides the employee great authority to determine enterprise direction and policy;
· The supervisory position provides the employee supervisory responsibility for a significant proportion of enterprise operations, and does not generally involve low-level employee direct supervision; and
· The applicant possesses executive and supervisory skills and experience; executive or supervisor-level employment commensurate salary and position title; in the overall organizational structure, the position is recognized (or has indicia) as one of authority and responsibility; responsibility for discretionary decision-making, policy-setting, managing/directing business operations, supervising professional/supervisory personnel; and where any limited routine work is required for the position, such routine work is only of an incidental nature for the position.
For a non-executive/non-supervisory role that requires special qualifications, a treaty country national may qualify for E-2 status for employment with the E-2 treaty enterprise, if the individual has essential skills/aptitudes to be utilized in the employment position, which are essential to the E-2 treaty enterprise’s successful or efficient operation. For determining if an individual possesses such essential skills, the following aspects must be considered (as applicable):
· The individual’s degree of proven expertise in the involved operational area; the training/experience period necessary for effective performance of projected duties; the individual’s training/experience length with the E-2 treaty enterprise; the skills/knowledge relationship to E-2 treaty enterprise specific processes/application, and the salary commandability of the special qualifications; if the individual’s specific skills/aptitude are possessed by others; foreign language/cultural knowledge do not in itself satisfy the special qualifications requirement; and
· If the skills/qualifications are readily available in the US. All presented facts must be taken into account for determination if the individual possesses the essential special qualifications. The essentiality of a particular skill may change over time, and become commonplace later. Skills necessary for initial enterprise start-up and operations may not continue to be necessary after initial startup phase post-completion where operations are running smoothly. Certain skills may only be short-term essential for training locally hired employees. In some situations, based on quality control, product improvement, or the delivery of a service not generally available in the US, the essentiality of the individual’s skills to the US treaty enterprise may continue for a longer period of time. Based on the E-2 treaty enterprise’s time-limited need of the individual’s essential skills, a reasonable projected start-up completion date or essential skilled worker replacement date, in addition to supporting documentation, may be required.
An essential skills employee is not strictly required to have prior employment experience with the organization. For essential skills employees who are responsible for start-up operations, a presumption exists that such individuals should be able to complete their objectives within 2 years, although there may be special circumstances for limited exceptions.
E-2 Duration
The initial period of E-2 status in the US can be up to 2 years, and extensions of E-2 status in increments of up to 2 year are available, with no maximum limit on the number of extensions. Further, an E-2 treaty investor or employee who travels abroad, may generally be granted an automatic 2 year period of readmission when returning to the US with a valid E-2 visa.
E-2 Application Process (General)
If the treaty investor is already in the US in a different valid nonimmigrant status, the treaty investor may file an E-2 petition to request a change of status to E-2. If the prospective employee is in the US in a different valid nonimmigrant status, the qualifying E-2 employer may file the E-2 petition on the prospective employee’s behalf to request a change of status to E-2. The filing fees for an E-2 petition with USCIS will range from $810 to $1,615.
If USCIS requires more information to adjudicate the E-2 petition, or intends to deny the petition based on the information/documentation already provided, USCIS may issue a Request for Evidence (RFE) or Notice of Intent to Deny (NOID). A formal response must be timely provided to USCIS in respect of the RFE or NOID. If USCIS ultimately denies the E-2 petition, it may be possible to file a motion to reopen and/or reconsider the E-2 petition denial decision, although the denial decision may not be appealed.
If the treaty investor or prospective employee is outside of the US, then the E-2 application must be submitted to the US Embassy/Consulate. Individuals must follow the applicable instructions and guidelines provided by the US Embassy/Consulate where the application will be made. The E-2 visa application fee is $315.00, in addition to a new visa integrity fee of $250. The validity period of the E-2 visa will depend on the US Department of State reciprocity schedule (i.e. the maximum validity period is typically 5 years), and the E-2 visa can be renewed where requirements are met. After approval of the E-2 visa, the individual may then seek to enter the US and be admitted in E-2 status at a US Port of Entry.
If the E-2 visa application is refused/denied at the US Embassy/Consulate, depending on the reasons for the actual refusal/denial, the treaty investor or prospective employee may still be able to reapply for an E-2 visa in the future, although a different strategy may be needed or a waiver if there is an inadmissibility issue.
E-2 Application Processing Time
For E-2 petitions filed with USCIS, regular processing will be around 1 year, although the processing time is subject to fluctuate. For an additional fee ($2,805), premium processing is available for E-2 petitions filed with USCIS, which may allow a decision on the E-2 petition within 15 business days. Where the E-2 petition is ultimately approved, USCIS will issue a formal E-2 approval notice. For treaty investors or prospective employees applying for the E-2 classification/visas at US Embassies/Consulates abroad, processing time will generally be more favorable, subject to visa appointment availability. As mentioned earlier, if the treaty investor or prospective employee is outside of the US, he or she will be required to submit the E-2 application to the US Embassy/Consulate.
E-2 Amendment
After E-2 status approval, if there will be a substantive change in the terms and conditions of E-2 status, such as a fundamental change in the employing entity’s basic characteristics (i.e. acquisition, merger, sale of the division where the E-2 holder is employed, or other event affecting the E-2 treaty investor’s/employee’s previously approved relationship with E-2 treaty enterprise), then either 1) an E-2 amendment petition must be filed with USCIS (with evidence of continued E-2 eligibility in the new capacity); or 2) the individual must obtain a new E-2 visa from a US Embassy/Consulate reflecting the new E-2 terms and conditions, and subsequently be admitted to the US in E-2 status at a US Port of Entry. A substantive/fundamental change does not generally include a corporate change that does not affect the previously approved employment relationship.
E-2 Dependents
The E-2 principal’s spouse, and unmarried children under the age of 21, may be eligible for E-2S/E-2Y dependent status/visas, in connection with the E-2 principal’s status. The dependents are not required to have treaty country nationality. The E-2S spouse is eligible for work authorization in connection with E-2S status.
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