E-1, E-2 & EB-5 Treaty Traders and Investors
Our Attorneys help you achieve your goals through the establishment of an entity to fulfill business and immigration needs. The ‘E’ visa can be complex and requires detailed analysis and proper preparation to clearly establish the immigration requirements.
The Immigration and Nationality Act (I.N.A.) provides nonimmigrant visa status for a national of a country with which the United States maintains a treaty of commerce and navigation who is coming to the United States to carry on substantial trade, including trade in services or technology, principally between the United States and the treaty country, or to develop and direct the operations of an enterprise in which the national has invested, or is in the process of investing a substantial amount of capital. (See List of Treaty Countries below)
Treaty visas are part of the United States’ efforts to “enhance or facilitate economic and commercial interaction between the United States and the treaty country.” Treaty Investors must invest a substantial amount in a U.S. commercial Enterprise. This value of money and trade varies based on the type of business and the attorneys at Kazmi & Sakata value their knowledge regarding investment determinations.
In addition, Treaty Traders and Investors have other benefits, including:
- An applicant for an E visa need not establish an intent to go to the United States for a specific temporary period.
- An applicant for an E visa need not have an unabandoned foreign residence and ordinarily need only express an unequivocal intent to return abroad.
- The spouse and children (unmarried and under age 21) of a treaty trader or investor are entitled to the same E-1 or E-2 classification as the principal visa holder. The nationality of a spouse or child of a principal E visa holder is not material to their classification as E-1 or E-2. In addition, the spouse may apply for separate work authorization while in the United States.
Requirements: Treaty Trader-E-1
The applicant must be a national of a treaty country;
The trading firm for which the applicant is coming to the U. S. must have the nationality of the treaty country;
The international trade must be “substantial” in the sense that there is a sizable and continuing volume of trade;
The trade must be principally between the U.S. and the treaty country, which is defined to mean that more than 50 percent of the international trade involved must be between the U.S. and the country of the applicant’s nationality;
Trade means the international exchange of goods, services, and technology. Title of the trade items must pass from one party to the other; and
The applicant must be employed in a supervisory or executive capacity, or possess highly specialized skills essential to the efficient operation of the firm. Ordinary skilled or unskilled workers do not qualify.
Requirements: Treaty Investor-E-2
The investor, either a real or corporate person, must be a national of a treaty country;
The investment must be substantial. It must be sufficient to ensure the successful operation of the enterprise. The percentage of investment for a low-cost business enterprise must be higher than the percentage of investment in a high-cost enterprise;
The investment must be a real operating enterprise. Speculative or idle investment does not qualify. Uncommitted funds in a bank account or similar security are not considered an investment;
The investment may not be marginal. It must generate significantly more income than just to provide a living to the investor and family, or it must have a significant economic impact in the United States;
The investor must have control of the funds, and the investment must be at risk in the commercial sense. Loans secured with the assets of the investment enterprise are not allowed; and
The investor must be coming to the U.S. to develop and direct the enterprise. If the applicant is not the principal investor, he or she must be employed in a supervisory, executive, or highly specialized skill capacity. Ordinary skilled and unskilled workers do not qualify.
Spouses and unmarried children under 21 years of age, regardless of nationality, may receive derivative E visas in order to accompany the principal alien. Spouses may apply for work authorization in the United States.
Holders of E visas may reside in the United States as long as they continue to maintain their status with the enterprise.
List of Countries Qualified for E-1 & E-2 Visas
TREATY COUNTRIES
| Country | E-1 | E-2 |
|---|---|---|
| Albania | — | E-2 |
| Argentina | E-1 | E-2 |
| Armenia | — | E-2 |
| Australia | E-1 | E-2 |
| Austria | E-1 | E-2 |
| Azerbaijan | — | E-2 |
| Bahrain | — | E-2 |
| Bangladesh | — | E-2 |
| Belgium | E-1 | E-2 |
| Bolivia | E-1 | E-2 |
| Bosnia and Herzegovina | E-1 | E-2 |
| Brunei | E-1 | — |
| Bulgaria | — | E-2 |
| Cameroon | — | E-2 |
| Canada | E-1 | E-2 |
| Chile | E-1 | E-2 |
| China (Taiwan) | E-1 | E-2 |
| Colombia | E-1 | E-2 |
| Congo (Brazzaville, Kinshasa) | — | E-2 |
| Costa Rica | E-1 | E-2 |
| Croatia | E-1 | E-2 |
| Czech Republic | — | E-2 |
| Denmark | E-1 | E-2 |
| Ecuador | — | E-2 |
| Egypt | — | E-2 |
| Estonia | E-1 | E-2 |
| Ethiopia | E-1 | E-2 |
| Finland | E-1 | E-2 |
| France | E-1 | E-2 |
| Georgia | — | E-2 |
| Germany | E-1 | E-2 |
| Greece | E-1 | — |
| Grenada | — | E-2 |
| Honduras | E-1 | E-2 |
| Iran | E-1 | E-2 |
| Ireland | E-1 | E-2 |
| Israel | E-1 | — |
| Italy | E-1 | E-2 |
| Jamaica | — | E-2 |
| Japan | E-1 | E-2 |
| Jordan | E-1 | E-2 |
| Kazakhstan | — | E-2 |
| Korea (South) | E-1 | E-2 |
| Kosovo | E-1 | E-2 |
| Kyrgyzstan | — | E-2 |
| Latvia | E-1 | E-2 |
| Liberia | E-1 | E-2 |
| Lithuania | — | E-2 |
| Luxembourg | E-1 | E-2 |
| Macedonia (FRY) | E-1 | E-2 |
| Mexico | E-1 | E-2 |
| Moldova | — | E-2 |
| Mongolia | — | E-2 |
| Montenegro | E-1 | E-2 |
| Morocco | — | E-2 |
| Netherlands | E-1 | E-2 |
| New Zealand | E-1 | E-2 |
| Norway | E-1 | E-2 |
| Oman | E-1 | E-2 |
| Pakistan | E-1 | E-2 |
| Panama | — | E-2 |
| Paraguay | E-1 | E-2 |
| Philippines | E-1 | E-2 |
| Poland | E-1 | E-2 |
| Romania | — | E-2 |
| Serbia | E-1 | E-2 |
| Senegal | — | E-2 |
| Singapore | E-1 | E-2 |
| Slovak Republic | — | E-2 |
| Slovenia | E-1 | E-2 |
| Spain | E-1 | E-2 |
| Sri Lanka | — | E-2 |
| Suriname | E-1 | E-2 |
| Sweden | E-1 | E-2 |
| Switzerland | E-1 | E-2 |
| Thailand | E-1 | E-2 |
| Togo | E-1 | E-2 |
| Trinidad & Tobago | — | E-2 |
| Tunisia | — | E-2 |
| Turkey | E-1 | E-2 |
| Ukraine | — | E-2 |
| United Kingdom | E-1 | E-2 |
| Yugoslavia | E-1 | E-2 |
EB-5-IMMIGRANT INVESTOR
The Immigration Act of 1990 created the Immigration Investor Program (or EB-5) as the fifth preference category for employment-based immigration applications. This was the first time a category specifically facilitated the admission of investors as lawful permanent residents and currently remains the only such category to do so. EB-5 is available to those individuals who have invested, or are in the process of investing at least $1 million in a commercial enterprise employing at least 10 full-time U.S. workers. Individuals who invest in a targeted employment area only need to invest a minimum of $500,000.
Approximately 10,000 visa numbers are allocated annually to EB-5 investors. Moreover, participation in the investor program has traditionally been far below capacity. The purpose of the Immigrant Investor Pilot Program is to attract foreign investors to fund businesses and projects in specific “regional centers” that would otherwise find it difficult to attract domestic investment based on current geographical market trends. By bringing such investment into areas of economic hardship and high unemployment, Congress hopes to simulate job expansion, improve infrastructure, and promote the growth of innovative new businesses. Congress has made the Immigrant Investor Pilot program particularly attractive to foreign investors by lowering the investment minimum to $500,000 (for a troubled business in a designated regional center) as opposed to $1,000,000 and not requiring the day to day management of the business.
With substantial improvements made in the consistency of the EB-5 visa, investors have begun to display more confidence and interest in the program. Each successive year, the EB-5 visa has grown in popularity. For instance, in 2008, USCIS issued a total of 1,360 EB-5 visas. In 2009, this number amounted to over 4,000 EB-5 visas; half of these came directly from China. Part of this increase was due to the unprecedented economic growth of China and the creation of many independently wealthy individuals.
Approval for the EB-5 visa is high. In 2009, USCIS received 1,028 Form I-526. Of these, 966 were approved and 163 were denied. Likewise, in 2010, USCIS received 1,100 Form I-526 applications. Of these, 955 were approved and 113 were denied.
Requirements & Investment Options
General Requirements
- Invest in or currently be in the process of investing at least $1,000,000. If this investment is made in a company located in a targeted employment area (“TEA”), the minimum investment is lowered to $500,000. A TEA is an area not located in any metropolitan area or town with a population of 20,000 people or more or an area that has experienced high unemployment of at least 150 percent the national average.
- You must provide benefit to the U.S. economy in the form of goods and/or services.
- You must create 10 full-time employment positions. If you choose to expand an existing business’s workforce, you could be required to create more than 10 jobs.
- Must be involved in the daily management of the company. Acceptable positions include acting as corporate officer, board member, etc.
New Business Enterprise
Any for-profit entity of lawful business is considered a commercial enterprise. There are four types of sub avenues classified as new business enterprises.
Creating a new business: Based on a 1998 precedent, an EB-5 investor was required to be present at the creation of an enterprise. However, this was problematic for businesses created under a partnership model. A partnership is typically formed with the main partners and then other limited partners are sought afterwards. Because of the 1998 precedent, such limited partners could not qualify for an EB-5. In 2002, Congress overruled this decision, only requiring a petitioner to show that he/she has invested the required amount.
Buying an existing business: An EB-5 investor can restructure an existing business. USCIS does not consider merely changing the legal structure of an enterprise sufficient. There is only one known case of a petitioner showing that an enterprise was materially changed enough to receive approval.
Expanding an existing business: An EB-5 investor can also create a “new” business by expanding an existing one. Through this avenue, an EB-5 investor must either expand the net worth of an existing business or the number of employees by 40%. If an investor chooses to increase the number of employees, he/she could be required to create more than 10 jobs; the larger the number of existing employees, the more of a burden this becomes.
Pooling: Multiple EB-5 investors can combine their money to invest in an enterprise. All investors must infuse the required amount into an enterprise and create at least 10 jobs. All jobs created by a pooling arrangement will be distributed evenly among investors. For example, if there are 3 investors and only 21 jobs are created, this does not mean that 2 of the investors created 10 jobs each and the third investor only created one job. It means that all three investors created 7 jobs a piece.
Overview of the EB-5 Green Card Process
The EB-5 visa is a three step self-petitioning process consisting of Form I-526, Adjustment of Status (I-485)/Consular Processing, and Removal of Conditional Residency (I-829).
File I-526 Petition
Investors should first file Form I-526, “Immigrant Petition by Alien Entrepreneur,” accompanied by supporting documentation. The required documentation must show that the immigrant investor has invested or is investing the required lawfully-gained capital in a company within the U.S. and that the investor will create full-time jobs for at least 10 U.S. workers.
The filing fee for Form I-526 is $1,500. Current processing time is six to eight months.
Filing for Adjustment of Status/Consular Processing
Once an investor has received I-526 approval, he/she needs either to go through consular processing or file Form I-485.
If You Are Living Outside the United States
You can become a permanent resident through consular processing if you live outside the United States. Consular processing is when USCIS works with the Department of State to issue a visa on an approved Form I-526, Immigrant Petition by Alien Entrepreneur Petition when a visa is available. Processing time is between 6 months to 1 year.
If You Are Living in the United States
You can become a conditional permanent resident through adjustment of status if you live inside the United States. Once Form I-526 is approved, you can apply for conditional permanent residence using Form I-485, Application to Register Permanent Residence or Adjust Status.
Processing time is usually anywhere from 6 months to 1 year. Once the I-485 is approved, resident status of the investor and his/her derivative family members is “conditional” for two years. Children must be unmarried and under the age of 21 to be considered derivatives at the time the I-526 is filed.
Often times, there is confusion as to when the 2 year period starts in which the investor must begin to uphold the job requirement. According to USCIS memo “AFM Update AD 09-04”, the two year job requirement commences six months after adjudication of Form I-526. In other words, the investor must hire and maintain 10 jobs within six months after approval of Form I-526.
Removal of Conditional Residency
Within 90 days of the 2-year conditional green card’s expiration date, the investor must file Form I-829, “Petition by Entrepreneur to Remove the Conditions” ($ 3,835) to request removal of conditional permanent residency. Determination of whether to remove conditions on the green card will be made within 90 days of filing or interview, whichever is later. The petition will be granted if the investor has: 1) infused $1 million/$500,000 into an enterprise, depending on the area of investment, 2) maintained the investment throughout, and 3) created/maintained at least 10 full-time positions (also dependent on the area of investment).
Immigrant investors remain in “valid” status while their I-829 petition is pending. Their status is will be extended automatically in one year increments until USCIS acts on the petition. During that time, investors are authorized to travel. Once conditions have been removed, a full green card is granted for indefinite permanent resident status in the U.S.
If you have any further questions or wish to discuss in more detail, please contact us at your convenience.
