Anyone wanting to live in the U.S. for an extended period of time should consider an E-2 visa. Although the E-2 visa is not a Green Card, there is no maximum period of stay for an E-2 visa. Unlike most other non-immigrant visa categories, E-2 visas can be extended indefinitely — as long as the investment continues to satisfy all relevant requirements.
To obtain an E-2 visa the investing company or individual must invest in a U.S. company. However, it does not matter how old the U.S. company is or whether it was purchased from someone else or established by the investor herself.
Citizens of many countries qualify for an E-2 visa
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 Iran, Pakistan, South Korea, Cameroon, Senegal, Honduras and Bolivia.
The threshold requirement for an E-2 visa is that citizens of a treaty country own at least 50% of the U.S. company, in which case the U.S. company is considered to have the nationality of the treaty country. It is not relevant whether the ownership is direct or indirect. Instead, the chain of ownership is traced back to the ultimate beneficial owners.
For example, if a non-U.S. parent company “A” owns 100% of the U.S. company “B”, one would look to the ownership of “A” to determine the nationality of “B”. And if citizens of a treaty country own 50% of “A”, the 100% U.S. subsidiary (“B”) is also considered a national of the treaty country.
However, foreign citizens who are U.S. lawful permanent residents (i.e. who have a Green Card) are not considered foreign citizens for purposes of the E-2 ownership requirements.
The applicant must be a citizen of a treaty country and have the same nationality as the U.S. company. He must also be a majority (at least 50%) owner of the U.S. company, be destined to an executive or supervisory position, or possess skills essential to the firm’s operations in the U.S.
Factors relevant to determining whether the applicant qualifies as a manager, executive or supervisor include the degree to which the applicant has ultimate control and responsibility for the firm’s overall operations or a major component thereof, the level of pay, and her professional experience.
To qualify as an essential employee, one must generally show that the applicant has gained special knowledge and some experience in the field in which the U.S. company does business, e.g. by having been employed with a foreign parent company. The availability of U.S. workers is also relevant to the degree of specialization the applicant possesses.
E-2 investments must be active rather than passive. A classic example of a passive investment is purchasing undeveloped land in the expectation of an appreciation in value. To be an active investment the U.S. company must be a real and active commercial or entrepreneurial undertaking that provides or produces a service or commodity.
Many potential E-2 investors are surprised to find that the E-2 investment must be irrevocable. As a rule, this means that key investments have to be made before an E-2 visa application is submitted.
The reason for this requirement is that the E-2 visa is not designed for persons who are preparing to invest by, for example, meeting with business partners, signing contracts or scouting for suitable locations and properties. Such preparatory activities can generally be conducted using a B-1, B-2 visa or ESTA.
Once investments have been made, the U.S. company must have begun business operations or must be very close to starting actual business operations for the investor to qualify for an E-2 visa.
However, e.g. when purchasing an existing business, the requirement that funds must be “irrevocably committed” would be met if the purchase agreement has been signed, the funds for the purchase of the business are in a U.S. based escrow account and the disbursement of said funds is dependent only on the issuance of the E-2 visa.
- Types of Investment
The E-2 visa provisions do not specify in detail what kinds of investment will satisfy the investment requirements. However, if the only investment is cash held in a business bank account, it is extremely unlikely that an E-2 visa would be issued.
Payments for leases or rents for property or equipment, on the other hand, may be counted as at-risk investments (e.g. rent paid for one year in advance will, as a rule, be qualified entirely as an investment). Equipment, inventory, licenses and patents can also be counted as investments as long as ownership has been transferred from the investor to the U.S. company and any physical equipment or inventory have been shipped to the U.S.
- Amount of Investment
The E-2 visa rules do not establish a minimum investment amount that is required to obtain an E-2 visa. How much must have been invested by the time the E-2 visa application is submitted depends on two factors. First, the amount of money generally required to begin the operations of similar companies in similar industries. Second, the higher the overall costs of beginning operations, the lower the amount of total investments that must have been made at the time of application.
Last not least, it has to be shown that the U.S. company will have the capacity to generate more than enough income to provide a minimal living for the investor and his/her family, and that the U.S. business will make a significant contribution to the economy. The latter condition might be met by showing that the U.S. company will employ qualified U.S. citizens or requires, on a regular basis, the services and/or goods of other U.S. companies in order to realize its specific business purpose.
An applicant for an E-2 visa does not have to establish an intent to remain in the U.S. for a limited period of time. The applicant may even sell his foreign residence and assets and purchase a home in the U.S.
However, the E-2 applicant must provide enough evidence to show that she intends to leave the U.S. upon the termination of her E-2 status, e.g. if business fortunes reverse or the U.S. company no any longer meets the E-2 nationality requirements. The applicant’s expression of an unequivocal intent to return when the E-2 status ends is usually sufficient to meet this requirement.
The principal E-2 applicant can be accompanied by her spouse and children (unmarried and under the age of 21). Children may attend school and the spouse (and only the spouse) may engage in employment. However, the spouse must apply for an employment authorization document before beginning employment.
After expiration of the E-2 visa, an extension (renewal) is possible. Although the first E-2 visa issued on behalf of a U.S. company is usually valid for only two years, extensions may be granted for up to five years.
Because many of the E-2 requirements are vague, it is a very good idea to obtain legal advice before establishing a U.S. company or making any investments. We would be happy to discuss your U.S. project, whether it will meet the legal requirements and what other options you may have to reside in the U.S. temporarily or permanently.