The E-2 is a visa for foreign investors (and certain employees of the investor) who are nationals of qualifying countries and who are making a qualifying investment in the United States. The investor may either be an individual or an entity.

How Do You Qualify for an E-2 Visa?

Applicants for E-2 visas must prove three essential elements in order to qualify for an E-2 visa: 1) the investor must have treaty status; 2) the investment must be "substantial" and must result in an active and operating enterprise; and 3) employee applicants for the E-2 visa must be of the same nationality as the principal investor and either perform duties at the director/manager level or have special qualifications that make his or her skills essential to the operation of the enterprise.

1. How do you Determine Whether an Investor has the Correct Treaty Status?

If the investor is an individual, then that individual must be a national of a country that has a "treaty of commerce and navigation" or a "bilateral investment treaty" in place with the United States. If the "investor" is a foreign company, then that company must be at least 50% owned by nationals of the same treaty company. Companies that are publicly traded generally are considered to have the nationality of the country where its stock was initially listed on a public stock exchange. Place of incorporation is not relevant to determining nationality

2. What Constitutes a Substantial Investment Resulting in an Active and Operating Enterprise?

Unfortunately, there is no specific level of investment that satisfies this "substantiality" requirement. The size of the investment is considered in light of the type of business that is being created in the United States. The investment must be enough to establish a viable business of whatever type has been initiated. If an investor is building a semiconductor plant in the US then the amount of investment that would rise to the level of "substantial" for this enterprise would be very large. Far less would be required for an investor starting an internet-based company.

There are few limits placed on the investment vehicles that an E-2 investor may use. This means that cash, debt, and equity transactions in their various forms may all be acceptable. However, to be counted as part of the "substantial investment," the investor's funds or assets must be placed at risk in the commercial sense. The "at risk" requirement will render certain leveraged investments ineligible for E-2 status. The investor's personal funds (or the funds of the foreign entity) must be subject to total loss if the investment is unsuccessful.

The business created by the investment must be one that actively seeks to produce a profit. The business cannot be marginal in the sense that it will only provide sufficient return to support the investor and his or her family.

3. When Will an Investor's Employees Qualify for the E-2 Visa?

The employees of the individual investor or of the investor entity, must meet two criteria to qualify for the E-2 visa. First, they must be nationals of the same country as the investor. Second, they must either be going to the US to assume a position with executive or supervisory duties, or they must have special qualifications that make them essential to the operation of the company.

U.S. law allows investors to file E-2 applications with either the United States Citizenship and Immigration Services ("USCIS") or a US consulate (Department of State) depending on the investor's situation. However, as discussed below, the consulates normally have the last word on the E-2.

More than any other non-immigrant visa, the E-2 is a creature of the US consular system which falls under the jurisdiction of the Department of State. Most consulates that review E-2 visa applications have specialists who are able to parse through the financial documentation that is used to prove these cases. Once an investor proves to the E-2 visa specialist's satisfaction that the investment made in the U.S. qualifies for the issuance of E-2 visas, the Consulate will consider that company to be "registered" at their office. If the investor is actually a company that will be sending many employees to work at the new operations in the US, then the following employees need not re-prove the substantiality of the investment. They can simply reference the initial registration of the company and file far less complicated applications proving that they are qualifying E-2 employees.

Investors and their employees who are already legally in the United States and who are eligible to change status to another type of visa may file their applications with the USCIS. If the USCIS believes that the investor or the employee meets the criteria discussed above, it can change the investor or employee to E-2 status. However, when these applicants travel outside the US, they must make another full application for the E-2 visa at a US consulate. The E-2 visa specialists at the consulates around the world do not defer to the USCIS determination of E-2 visa eligibility. They review applications from anew, and exercise virtually complete discretion in their conclusions.

How Long May a Person Remain in E-2 Status?

E-2 visa holders are admitted to the US for two years. However, the status can be extended in two-year increments for as long as the E-2 investor or the E-2 employee meets the E-2 criteria. The caveat to this rule is that employees with specialized qualifications who are traveling to the US to establish a start up company are presumed to have completed their essential work by the end of the initial two-year admission. Extensions of stay beyond the initial two years for such employees is difficult.

What are the rules regarding travel with E-2 visas?

E-2 visas can be issued with a validity of up to 5 years. Each time a person enters the US with an E-2 visa, they may be granted a period of stay on Form I-94 of up to two years. The period of stay may at times exceed the validity of the E-2 visa.

How about my family?

The spouse and unmarried children under 21 are entitled to the same E-2 classification as the principal alien. The nationality of the spouse/children is not material to their classification as long as the principal alien is a treaty national.

How about applying for a green card?

E-2 status does not require an applicant to maintain an unabandoned residence abroad. A person in E-2 status who adjusts status to permanent lawful residence (green card) status in the US should file a waiver of privileges and immunities for treaty nationals.