E Visa, Trade Treaty Visa

Foreign national investors can use investment visa to expand their business in the U.S. There are three elements necessary which if any of these misses, the visa can not be issued:

  1. A treaty must exist between the U.S. and the native country of the alien.
  2. Nationals of the native country must control or own majority of the investment or trading.
  3. Each employee or principle of the company must have the citizenship of the native country.

There is no petition required to be filed in the U.S.; the applicant can apply directly to a U.S. consular office abroad.

The spouse and minor children of the main alien can accompany him/her to the U.S. under the same principle as him/her while they are not required to have the same nationality. Investment must be substantial

The investment required for treaty investor status must be “substantial.” No set dollar figure constitutes a minimum amount of investment to be considered “substantial” for E-2 visa purposes. The requirement is met by satisfying the “proportionality test.” The test is a comparison between two figures: the amount of qualifying funds invested, and the cost of an established business or, if a newly created business, the cost of establishing such a business. The amount of the funds or assets actually invested must be from qualifying funds and assets. The cost of an established business is, generally, its purchase price, which is normally considered to be the fair market value. The cost of a newly created business is the actual cost needed to establish such a business to the point of being operational. The actual cost can usually be computed as the investor should have already purchased at least some of the necessary assets and, thus, be able to provide cost figures for additional assets needed to run the business. The value (cost) of the business is clearly dependent on the nature of the enterprise.

Proportionality test

The amount invested in the enterprise should be compared to the cost (value) of the business by assessing the percentage of the investment in relation to the cost of the business. If the two figures are the same, then the investor has invested 100 percent of the needed funds in the business, and such an investment is substantial. Illustrations: A newly created business might need only $50,000 investment to be set up and to become fully operational. As this cost figure is relatively low, a higher percentage of investment, such as 90-100 percent, is anticipated. A business costing $100,000 might require an investment of 75-100 percent to meet the test. A small business costing $500,000 would demand generally upwards of a 60 percent investment, with a $375,000 investment clearly meeting the test. In the case of a million dollar business, a lesser percentage might be needed, but 50-60 percent investment would qualify.fn61 A business requiring $10 million to purchase or establish would require a much lower percentage.

A $3 million investment might suffice in view of the sheer magnitude of the dollar amount invested. An investment of $10,000,000 in a $100 million business would qualify based on the sheer magnitude of the investment itself. Caution: Assessing proportionality requires the use of judgment that takes into account the totality of the factors involves and is not a simple arithmetic exercise.

Enterprise must be real, operating commercial enterprise

The enterprise, to qualify for treaty investor classification, must be a real operating commercial enterprise or active entrepreneurial undertaking, that is, a business venture productive of some service or commodity. The enterprise cannot be a fictitious paper organization, or an idle speculative investment held for potential appreciation in value, such as undeveloped land or stocks held with no intent to direct the enterprise.

Enterprise must be more than marginal

The alien seeking treaty investor status must not be investing a relatively small amount of capital in a marginal enterprise solely for the purpose of earning a living. An alien is not entitled to treaty investor status if the investment, regardless of its substantiality, will return only enough income to provide a living for the applicant and the applicant’s family.

There are various ways to help determine whether an investment is marginal, in the sense of providing only a livelihood for the applicant. First, the consular officer will look to the alien’s income or financial situation, and if the applicant has another source of income or other financial means to support him or herself and his or her family, then the business is not deemed to be established for the sole purpose of earning a living. If the income derived from the business exceeds what is necessary to support the alien and the alien's family, then this too meets the test. If the first test is not met, and it becomes necessary to consider other factors, the consular officer may look to the economic impact of the business. An applicant may show, for instance, that the investment will expand job opportunities locally and/or that the income or return from such a business will have a positive significant impact on the local economy. The investment must be more than a mere conduit by which the alien seeks to enter the skilled or unskilled labor market.

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