E-2 Visa – Investor Visa For The USA

E-2 visas are for citizens of countries with which the U.S. maintains treaties of commerce and navigation. On the basis of the Treaty of Friendship, Commerce and Navigation, which was concluded between the U.S. and the Federal Republic of Germany on October 29, 1954 and which entered into force on July 14, 1956, German citizens may apply for E-2 visas.

The U.S. maintain similar contracts with most other European countries (e.g. Austria, Switzerland, Poland, France and Italy) and many other countries, including New Zealand, Pakistan, South Korea, Cameroon, Senegal, Honduras and Bolivia.

The person applying for an E-2 visa must be of the same nationality as the U.S. company for which they will be working. The nationality of the U.S. company is determined by the nationality of the natural persons who ultimately own it, possibly through several intermediary companies. At least 50% of the company owners must have the same nationality as the applicant. It is important that the owners are also entitled to vote accordingly. It should also be noted that persons with a U.S. greencard are no longer considered nationals of their home country for the purpose of E-2 visas.

As the previous paragraph makes clear, nationality plays a decisive role in the E-2 visa. The applicant must be a German citizen and hold either at least 50% of the shares (and voting rights) as an "investor" or hold a key position in the U.S. company. In addition to the owner/shareholder, only persons who have employee responsibility, e.g. as a Managing Director or Head of a Department, or who have company-specific specialized knowledge that is not available on the U.S. labor market and cannot be acquired in a relatively short training phase qualify for an E-2 visa.

As a Managing Director, the visa holder must be able to act freely and have decisive influence on the company's policy; a Head of Department should be able to independently supervise, instruct and also, for example, recommend their employees for promotion; as an employee with specialized knowledge, previous work experience in a foreign group company is an advantage, although not mandatory. It is also important that the unique position or qualification is reflected in the applicant's salary.

The applicant must leave no room for doubt that he or she will leave the USA when the requirements for his/her visa status are no longer applicable, for example, if the business fails or the employment contract with the qualifying business is terminated. The Consulate is obliged to be satisfied with the applicant's unambiguous declaration of intent. However, if the Consulate has justified doubts about the truthfulness of the declaration of intent, it can demand that sufficient ties to the home country be proven in an appropriate manner.

Unlike with tourist or business visas, for example, E-2 visa applicants must not maintain their residence outside the USA. So, for example, as a young entrepreneur, the applicant can certainly pull up stakes in Germany to live and work in the USA. Theoretically, it is not even necessary to leave the USA to make the necessary extension of stay.
 

In the case of the principal applicant who qualifies for an E-2 visa, his or her spouse and unmarried children under the age of 21 can also accompany him or her to the USA without having to meet any special conditions. However, they must also fill out various forms.

The children are allowed to attend school or study; the spouse is permitted to take a job in the USA. It is, however, disputed between the USCIS and the Social Security Administration as to whether the latter will need a work permit in addition to a visa. To be on the safe side, an application should be submitted prior to starting work. However, this can only be done after entering the USA rather than already in connection with the visa. The corresponding application form is the I-765.

The following naturally applies accordingly to cases from Austria, Switzerland or other states with which an "E-2 agreement" exists.

An essential prerequisite, as already mentioned above, is that at least 50% of the ownership of the U.S. target company is held by German citizens if Germans are applying for the E-2 visa. If, for example, U.S. citizens are also to participate in the company, particular attention must be paid to the minimum participation of 50% of Germans when founding the company. Caution is also advised if Germans who already hold a permanent residence permit for the USA (greencard) are involved or are to be involved.
In the present context, they are not considered German citizens. 

In addition, investors should make sure that the purchase price (in the case of an equity investment) flows into the company via some kind of capital increase and is spent on the company, i.e. does not go to the seller of the shares. Moreover, the investor should also be able to show that he does not simply want to continue the existing company but rather also continue its development. This is especially true in the case of a purchase of the entire company whereby the purchase price then naturally flows to the previous owner.

Particularly in the case of larger companies, it is also important to note: If, in the course of time, the shareholder structure changes in such a way that the requirements related to nationality are no longer fulfilled, previously issued E visas become invalid even if the validity date printed on them is still current. Employees who are in the USA during the change of ownership would be there illegally after the implementation.
 

Not every business idea qualifies the investor or other persons for an E-2 visa. For example, an E visa will not be issued for the purchase of a plot of land in hope of possibly being able to sell it at a profit in the future; nor, for example, will a visa be issued for the purchase of a luxury flat in New York to be rented out. On the one hand, the business idea should produce goods or offer services; on the other hand, it must be shown that the daily presence of the E-2 visa holder is necessary for the success of the enterprise.

The E visa regulations state that the company must generate more profit than the investor and his family need for living costs. If this is not the case, it must be shown that the company adds value to the U.S. economy, i.e. that it would like to hire U.S. employees or that other U.S. companies will benefit from it. Experience shows that the last point is generally emphasized, i.e. it is not sufficient that the company is profitable for the investor. Therefore, other conditions should be fulfilled in principle, irrespective of the profitability of the company: 

1. The company should employ U.S. citizens (or U.S. greencard holders) in qualified positions. 
2. If possible, the company should require the products and/or services of other U.S. companies to realize its own business idea.

The chances of being granted an E-2 visa increase if both conditions are fulfilled at the same time although this is not mandatory. If, for example, the investor has no opportunity to hire employees, he will not be excluded from the E visa process for this reason from the outset; rather, special emphasis would then have to be placed on indicating that other U.S. companies can profit from the company and how this can be achieved, specifically to a significant extent. However, it cannot be ruled out that more emphasis will be placed on job creation in the future, so our recommendation is to demonstrate intent to employ staff (U.S. citizens or greencard holders) in any case, as far as possible.

This fact and how these conditions are fulfilled should be presented in a business plan as part of the initial application for an E-2 visa or, in the case of a renewal, be proven through appropriate supporting documents.

This often surprises many applicants: The USA generally requires that investments had already been made prior to obtaining the visa; this must be proven with appropriate documentation when the application is submitted. Therefore, an E-2 visa is not issued so that the applicant can travel to the USA to make investments, rather it is issued so that the applicant can continue to expand and/or manage the business in which he or she has already invested under the terms of the regulations. Tip: Persons who shy away from investing larger sums even before an E-2 visa is granted can establish the relevant contracts subject to the (sole) condition that the visa is granted, transfer the funds to a trust account and make their routing transfer also subject to the sole condition that the visa is granted. 

Moreover, it is not clear from the relevant legal provisions what is considered an investment. While the rental of office space and/or land usually only counts as an investment if and to the extent that this has been paid for in advance, the purchase (or import) of operating materials, machinery and/or goods usually constitute investments without further ado. Funds in a business account are generally not accepted as an investment. As stated in the regulations, the invested assets must be "at risk" and "irrevocably committed", i.e. if the venture fails, the investment must be partially or totally lost.

Furthermore, there are no precise legal requirements regarding the amount of the investment. In the case of small investments, it must be ensured that the company is advanced to the point where it can start its business activity when the applicant receives his or her visa.
 

Depending on the case, an E-2 visa is valid for two (primarily for start-ups and initial applications) to a maximum of five (usually for renewals or companies that have been in existence for some time) years. With the initial application for an E-2 visa, the U.S. company is "registered" with the U.S. Consulate in Frankfurt (or Bern, Vienna, etc.); the registration is also valid for two or five years. While the company is registered, employees can be posted through a simplified procedure. If the registration expires, it must be renewed. For companies with less than 25 employees, the procedure is comparable to that of the initial registration; for companies with more employees, there is a simplified procedure.