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An Overview of the Valuable E-1/E-2 Visa

July 3, 2018

The E-1 or E-2 visa can be a valuable tool for foreign-owned businesses that trade primarily with the U.S. (E-1) or have made a substantial investment in the U.S. (E-2). The visa class requires that the business be majority-owned by nationals of a foreign country with a qualifying E-1 trade treaty or E-2 investment treaty with the U.S, which represents roughly 80 countries.

Employees who share the nationality of the foreign-owned business (e.g., a Japanese national from a Japanese business) may obtain an E-1 or E-2 visa valid for up to five years to enter the U.S. as a manager, investor, owner, or employee with essential skills. E-1/E-2 is therefore useful as an alternative to the L-1 intracompany transferee, as there is no foreign employment requirement. Candidates are also entitled to apply directly for the visa with a consulate, and spouses may obtain employment authorization documents as well.

The E-1 visa however requires that over 50% of a company’s international trade be between the U.S. and the foreign country, which creates a high bar in the modern, global economy. The E-2 visa only requires substantial investment into a real and operating U.S. business, which is determined by a proportionality test related to the cost of opening the enterprise. For example, a relatively inexpensive business requiring $140,000 to open may necessitate an owner’s contribution of 100% (the full $140,000 investment), but a more expensive business requiring $50,000,000 in capital may require only a 10% investment of $5,000,000.

The popularity of the E-2 visa may well increase in coming years. Upon announcing its plans to rescind the International Entrepreneur program, the Trump administration pointed to the E-2 as a viable alternative option for investors, thereby demonstrating an implied preference for the program. Further, the E-2 program is currently being touted for expansion in certain critical countries such as Israel, which has had an E-1 treaty with the United States since 1954. Additionally, the U.S. Senate just passed the KIWI Act to proceed with an E-2 treaty with New Zealand.