The E visa classification is an excellent visa category preferred by many executive and business people for the many benefits it provides. In recent years, given the increase of trade and investment between the United States and the countries with which treaties were entered, many foreign corporations, investors and entrepreneurs have favored the E visa category because it affords them easy and continued access to the United States. Moreover, the E visa is even more particularly sought after as a result of its favor with the upper echelon of international business society including top executives of major commercial and industrial organizations.
E nonimmigrant visa classification is available to prospective nonimmigrants provided that there is a treaty of commerce and navigation between the United States and the foreign state of which the applicant is a national. However, there have also been recent amendments which may enable certain countries to qualify notwithstanding the absence of a treaty provided that reciprocity is offered to American nationals as well. The 1990 Immigration Act added Australia and Sweden to the list of treaty trader and treaty investor countries.
In order to qualify for this classification the applicant must be entering the United States individually or as the qualified employee of a company:
a) Solely to carry on substantial trade, principally between the United States and the foreign state of which he is a national (E-1 Treaty Trader visa). or
b) Solely to develop and direct the operations of an enterprise in which a substantial amount of capital has been invested, or is actively in the process of being invested.(E-2 Treaty Investor visa).
The United States has treaty trader relationships with over 40 countries, and treaty investor relationships with over 30 countries. Both E-1 and E-2 visas are available to citizens of a large number of these countries.
The following represent the prerequisites for E classification all of which must be present in order for an applicant to qualify
There must be a treaty between the United States and the Foreign Country providing for such visas.
– The E applicant must be a citizen of the treaty country. If the applicant is an employee of a company, the stock of that company must be at least 50% owned by the nationals of the treaty country, who are not permanent residents of the United States.
– Either substantial trade between the United States and the treaty country must be in place (E-1), or substantial investment in the U.S. must have been made, or be actively in the process of being made (E-2).
The Benefits of “E” Status
The benefits of E status are substantial, and most noteworthy is that this status, in either the treaty trader or treaty investor form, is almost equivalent to the rights available to someone who has permanent resident status. Visas are generally issued for a five year period with five year extensions available at the American Consul. Upon each entry to the United States, E visaholders are granted stays in E status for a one year period, with extensions of one-year periods normally, which are usually available without restriction. Further, if the visaholder travels outside of the United States at least once a year, there may be no need to apply for status extensions since a new period of one year authorization is granted upon each new entry that the visaholder makes to the United States. This virtually enables the visaholder a limitless stay in the United States provided that he continues to meet the requirements necessary to maintain status.
An important point to bear in mind is that although the primary visaholder may not have the need to extend his status authorization, it is often the case that the derivative E visaholders, such as the spouse and children may need to extend their status. This is the case, since often the primary E visaholder will travel outside of the U.S. on various business trips without his family and therefore family members will not automatically receive the same one year admission period the primary holder receives upon reentry. Therefore, it is important to make timely application for extensions for family members who do not travel so that they do not inadvertently fall out of status.
Additional Benefits
1) One of the additional benefits of E status authorization is that there is no need to show that the applicant intends a temporary stay in the United States other than to demonstrate that the applicant intends to return to his native country upon expiration of his authorized stay.
2) Moreover, there is no need to maintain a foreign residence abroad. Rather the applicant must display a definite intent to return to his foreign country of origin.
The expression of an unequivocal intent to return when the E status ends is normally considered sufficient, in the absence of specific indications or evidence that the applicant’s intent is to the contrary.
3) The applicant’s children, as well as the applicant’s spouse, are entitled to E status regardless of their own nationality. Therefore, they may be accorded E status even if their nationality is different from that of the treaty trader or treaty investor.
4) One of the major benefits of E status is that the initial one year admission time period may generally be extended almost without limit.
5) Spouses of E-1 or E-2 visa holders are entitled to apply for employment authorization.
The holder of an E visa is entitled to make application for admission into the United States (subject to any exclusionary provisions) in order to gain entry to the United States. Therefore, assuming no special problems are present which would lead to grounds of excludability, the E visaholder is normally assured of immediate entry and continued presence in the United States.
TREATY TRADER STATUS — E-1 VISA
In order to be classifiable as a nonimmigrant treaty trader, the corporate or individual applicant bears the burden of proving that the employee will be in the United States to conduct trade of a “substantial” nature between the U.S. and the home country.
TRADE means the exchange, purchase or sale of goods and services, with goods being defined as tangible commodities or merchandise having intrinsic value. While services are economic activities whose outputs are other than tangible goods.
The 1990 Immigration Act has expanded the meaning of “services” to include but not be limited to: banking, insurance, transportation, communications and data processing, advertising, accounting, design and engineering, management consulting, tourism and technology transfer.
There are no precise rules with regard to substantiality of the trade which depends on the particular situation being considered. Therefore, substantiality is largely a factual determination, often determined on a case by case basis. It is clear however, that at least 50% of the activity of the employer company must be between the U.S. and the home country.
The important thing is to look at the overall picture and view the transactions in relation to the overall situation, i.e. the market, the number of transactions, the percentage of U.S. sales, trade worldwide, continued course of trade, dollar value of the trade.
The substantial trade requirement necessary for treaty trader status classification is not necessarily geared toward ruling out smaller companies from consideration. In fact, proof of numerous transactions, although each may be small in value, may be sufficient to establish the requisite continuing course of international trade. A significant number of smaller transactions will be generally deemed substantial, while one large transaction will generally not be considered sufficient for the purposes of establishing substantiality of trade. What is important is that a constant flow of trade be shown to exist. In fact, one or two large sales of great value during a one year period may not qualify, while a flow of numerous transactions of lesser total value during the year may be sufficient.
It is also important to bear in mind that companies can be structured with the purpose of qualifying for E-1 Treaty Trader visas. For instance, a large foreign manufacturing and export concern may be selling 30% of its output to the United States, which would not qualify for E-1 visa issuance this would be true even if it established an unincorporated branch office in the United States. However, if a United States subsidiary at least 50% owned by the treaty country nationals is established, and that company imports at least 51% of its merchandise from the treaty country, employees of that company who are nationals of the treaty country of would qualify for issuance of E-1 visas.
COMPANY REQUIREMENTS FOR E-1 TREATY TRADER AND E-2 TREATY INVESTOR CLASSIFICATION
In order for a company to qualify for E-1/E-2 treaty trader or investor classification, the applicant must show that the company is 50% owned by a person or persons who are nationals of the treaty country.
In Parent/Subsidiary Relationships – The nationality of the corporation which will directly employ the applicant, is the deciding factor in determining whether a company may qualify for E classification. The place of incorporation of the company is not relevant. Therefore, for example, if a company is French-owned (50% owned by French nationals), the fact that the company’s place of incorporation is in the Grand Cayman Islands will have no bearing on the E application in determining whether the elements of nationality are met. However, company ownership will be traced back through holding companies, and the ultimate stockholder must be at least 50% nationals of the treaty country. Shares of a business owned by U.S. permanent resident aliens (green card holders) cannot be considered in making determinations of majority ownership by nationals of the treaty country.
– In countries such as Japan and the U.K., the American Consul keeps a separate folder on each company. There is a great concern for the number of individuals sent to the United States and the Consul may require that once a certain level of staffing is reached, new employees may be sent only as replacements rather than as initial E-1/E-2 Treaty Trader or Treaty Investor Employees. It is also important that sufficient United States employees be hired by the U.S. company.
– If the company in question is a publicly traded company where actual names and percentage of ownership are difficult to determine, then the firm’s nationality is presumed to be that of the country, in which the firm’s stock is principally listed and traded on the stock exchange.
TREATY INVESTORS (E-2 VISA CLASSIFICATION)
To qualify for E-2 treaty investor status the applicant must show that he or she is entering the United States solely to develop and direct the operations of an enterprise in which a substantial amount of capital has been invested, or is actively in the process of being invested.
What constitutes “Investing” or being “In the Process of Investing”
In order to prove that the applicant has invested or is in the process of investing, it must show that it has control of the funds to be invested. The mere intent to invest, or prospective investment arrangements entailing no present commitment, will not suffice to prove the requisite investment. Therefore, mere possession of uncommitted funds in a bank account would not qualify. Nor can indebtedness such as mortgage debt or commercial loans secured by the enterprise assets be counted toward the investment, as there is no requisite element of risk.
However, a reasonable amount of cash held in a business bank account or similar fund used for routine business operations may be counted as investment funds. Similarly, loans secured by the applicant’s own personal assets, such as a second mortgage on a home, or an unsecured loan guaranteed by applicant’s personal signature, may be included, since the applicant risks the funds in the event of business failure.
The applicant must be close to the start of actual business operations, not merely at the stage of signing contracts or looking for suitable locations or properties.
Further, the applicant must show that the investment is “substantial”, that the enterprise is a real operating commercial enterprise and that the enterprise is more than a marginal one solely for earning a living.
The investment must be substantial in order to entitle the applicant to E-2 Treaty Investor Status
To determine the substantiality of the investment for treaty investor purposes, a proportionality test must be employed. The proportionality test weighs the amount invested against either the total value of the particular enterprise in question OR the amount normally considered necessary to establish a viable enterprise of the nature contemplated. In assessing the amount normally required to establish a particular enterprise, the consular officer must draw upon his personal knowledge of the U.S. business scene to determine whether the amount the applicant proposes to invest is reasonable to that type of business. If the consular officer is in doubt, he may seek additional evidence to help establish what would be a reasonable amount. This additional evidence can include letters from Chambers of Commerce or statistics from trade associations.
The proportionality test is meant to be flexible and is not geared toward excluding small businesses. In fact, many E-2 visas involve relatively small investments. In the case of small to medium-sized businesses, “substantial” generally means an investment of more than half the value of the enterprise, or an amount normally considered necessary to establish an enterprise.
However, in some instances, the dollar amount of an investment may be so great as to warrant issuance of E-2 visas even though the investment is not a large proportion of the total value of the enterprise. This can be the situation when a large foreign corporation, capable of multimillion dollar capital transactions, invests in an enterprise in the United States and seeks to dispatch managerial and essential employees to that enterprise.
The meaning of the term “investment” for treaty investor purposes is the placing of funds or other capital assets at risk in the commercial sense in the hope of generating a return on the funds risked. If the funds are not subject to partial or total loss is investment fortunes reverse, then it is not an investment for treaty investor purposes.
The Applicant must show that the enterprise is more than marginal
In order to show that the enterprise the applicant is investing in is more than marginal, the applicant must show that the investment will generate more income than that which is considered earning a livelihood for the applicant and his family. To illustrate that the enterprise is not marginal, the applicant may show that the investment will expand job opportunities locally or that it is adequate to insure that the applicant’s primary function will not be that of a skilled or unskilled laborer. Further, even if the investment is such that it will merely produce a livelihood for the applicant, it can still qualify, if it can be shown that the applicant does not rely upon the investment enterprise to produce a living. This shows that the investment may be one of risk and not of providing a mere livelihood and therefore, the investment would not be in the marginal category.
HOW TO QUALIFY AS AN EMPLOYEE OF A TREATY TRADER OR TREATY INVESTOR COMPANY
Although many treaty traders and investors are self-employed individuals carrying on their own businesses, in highly industrialized, the vast majority of applicants tend to be employees of large companies who are being assigned to United States. In order to qualify for an E-1 visa, it must be demonstrated that:
1) The employee is or will be engaged in duties of an executive, managerial, or supervisory character, or if the employee will be engaged in a minor capacity, that
2) The employee has special qualifications that make the services to be rendered essential to the efficient operation of the enterprise.
– When assessing the supervisory or executive nature of the position, the factors to be considered are:
1) The title of the position being offered the prospective employee
2) The position of the Job within the overall corporate hierarchy
3) The amount of responsibility and control which the applicant will wield.
4) The applicant’s prior work experience
5) The proposed compensation of the applicant.
As far as the significance of the title is concerned, the size and nature of the organization will determine the significance accorded to this factor. For example, the title of “vice president” or “manager” might be of use in assessing the supervisory nature of a position if the applicant were coming to a major operation having numerous employees. However, if the applicant is coming to a small two-person office, such a title in and of itself would be of little significance in determining whether the applicant’s position is supervisory or executive in nature.
– Further, in order to qualify for E status, the applicant must show that the executive and supervisory duties are the employee’s principal and primary function, and not an incidental or collateral function. It is also important to bear in mind the proportion of E managers to local staff. The staffing levels must be proportionate, i.e. the staff should not be composed of all E-1/E-2 managers without any local staff. In light of the increasing popularity of E status classification, qualifications for E status are strictly construed. Therefore, it is generally easier for someone at a higher level in an organization to qualify for E status than it is for someone who is not highly placed within a corporation.
– Further, applicants seeking visas as employees of treaty trader companies, must apply for their visas at the appropriate consulate having jurisdiction over their place of residence, regardless of the consular post where the company treaty trader visa was initially established.
EMPLOYEES WITH ESSENTIAL SKILLS
In the event that the applicant seeking E visa classification as a treaty trader or investor employee will not perform duties of an executive or supervisory nature, the employee may nonetheless be accorded E visa classification if the applicant can show that the employee possesses specialized knowledge and that the services to be rendered are essential to the efficient operation of the enterprise.
– In order to prove that the employee possesses essential skills, the applicant must show that the employee possesses specialized knowledge that they will draw upon in the E-1/E-2 treaty trader/ investor ventures. Such knowledge must be shown to be generally unavailable in the U.S. so that U.S. workers are unavailable for the position. The company must also show how the E applicant will eventually train U.S. workers to perform this skill.
In certain instances, highly trained and specially qualified technicians may be employed by E-1 or E-2 firms to train or supervise personnel employed in manufacturing, maintenance and repair functions, even though these employees may perform some manual duties.
For essential skills employees may not be utilized as a long-term solution. In the case of highly trained technicians there is the presumption that they will train U.S. workers in a reasonable period of time to replace the foreign technicians. If the treaty trader or investor company continually requests visas for foreign technicians, the consular officer will remind them of their obligation to train U.S. workers and will view the absence of a training program for U.S. workers as a negative factor in examining future visa applications for technicians.
– It is important to note that the possession of language skills alone is not considered a special qualification to qualify as an essential employee of a treaty visaholder.
– E-2 Employees considered essential for start-up enterprises
In the instance of E-2 employees of treaty investors who will engage in starting up the treaty investor’s enterprise in the United States, the essentiality of their services derives from their familiarity with the overseas operations of the treaty organization rather than from the nature of their skills. This factor is unique to E-2 employees and usually applies where an established foreign firm seeks to use some skilled foreign personnel in the early stages of a U.S. investment usually for a period not to exceed one year.
SPOUSE AND CHILDREN OF TREATY TRADER OR TREATY INVESTOR
The spouse and any unmarried children under 21 years of age are entitled to accompany or follow to join the E visaholder and enjoy the same E status as the principal visaholder.
– The nationality of a spouse or child of a treaty visaholder is not material to the classification of the spouse or child as far as the visaholder’s E-1 status is concerned.
– Family members are authorized to attend school without the need to change their nonimmigrant status.
Traveling with an E Visa
The procedure with regard to E visaholders is as follows:
– Each time the E visaholder leaves the United States, he surrenders his Form I-94 (Arrival/ Departure Record) document to Immigration. Upon a new entry to the United States, the E visaholder presents his visa to the Immigration Inspector and receives a new I-94 which entitles him to a new one year period in E status, regardless of whether the former year period for which he was previously authorized, has elapsed.
This is one of the major benefits of E status, since travel abroad and return to the United States automatically triggers a new one year period of authorized stay without any other effort required from the visaholder.
– Travel to Canada and Mexico from the United States for less than a 30 day time period will generally NOT enable the applicant to receive a new year of extension, which would be the case if he were traveling abroad and then reentering the United States. This is because the applicant will generally retain his I-94 (Arrival and Departure Record) and not surrender it. He does not receive a new one upon reentry which would be the case if he were traveling to another country.
HOW TO FILE AN APPLICATION FOR AN E VISA WITH THE AMERICAN CONSULATE
The following documentation is generally required by American Consulates from applicants seeking E visa classification. The American Consulates in different countries requires different supporting documentation which should be clarified before the application is submitted.
Supporting Documents for Treaty Trader/Treaty Investor Visas
1) Treaty Trader/Investor Form 1 – U.S. Company Profile
2) Treaty Trader/Investor Form 2 – List of Executive, Managerial and Specialist Personnel
3) Application of Nonimmigrant Visa on Form DS-160
4) Photograph
5) Passport
6) Company Letters from U.S. and foreign companies
7) Documentary proof of the existence of the requisite investment or trade.
Required Supporting Documents
The following items represent the type of supporting documents which may be submitted in order to establish a company’s qualification for either E-1 or E-2 visa classification.
1) Detailed company report on the nature of the business, current and projected investment and other business plans, current and planned employment of treaty country and U.S. citizens, ties to U.S. corporations etc.
2) Evidence of establishment of U.S. company or branch office:
a) Certificate/Articles of Incorporation
b) Business License
3) Evidence of Actual trade between the U.S. company or office and treaty country. This may be evidenced by the submission of invoices, letters of credit, bills of lading and correspondence showing trading activity.
4) Evidence of investment in the United States. This may be shown by submitting proof of purchase of capital goods and inventory, lease or purchase of property contracts, construction contracts, blueprints, property valuations, photographs of building sites and newspaper reports on new business ventures.
5) Evidence of the applicant company’s business volume in the United States. This may be shown by submission of the company’s balance sheet, orders for goods shipped or awaiting shipment and by providing copies of the company’s tax returns.
6) Annual report or financial statement of foreign company
7) Organizational Charts for both the U.S. and foreign companies.
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