For many investors considering a U.S. investment-based visa, the EB-5 option seems increasingly less attractive. Fortunately, there is the E-2 Treaty Trader Visa, which can be an attractive option for investors who wish to obtain lawful status in the United States for themselves and their immediate family more quickly and at a lower cost than an EB-5 visa.
Investment-Based Visas (E-2 and EB-5)
Investor visas, often referred to as “Golden Visas” have been a part of the global mobility marketplace for decades. Several Caribbean countries like St. Kitts and Nevis codified investor visa programs as early as 1984, and the U.S. established its EB-5 investment visa program in 1990. These programs provide a significant source of Foreign Direct Investment to offering countries’ economies and they offer valuable passports to investors — particularly those residing in countries with undesirable political or economic issues.
But becoming a permanent resident or a citizen of another country by obtaining an investor visa can come with drawbacks, not least of which can be becoming subject to more than one nation’s income tax laws. In the United States, once a foreign national becomes a permanent resident, their worldwide income becomes taxable by the IRS as a U.S. taxpayer. EB-5 requirements can be problematic due to its comparatively high minimum investment amount. As of 2023, the minimum investment for an EB-5 visa has been increased to $1,050,000 for standard investments and $800,000 for investments in Targeted Employment Areas (TEAs), which include rural or high-unemployment areas, under the EB-5 Reform and Integrity Act. These increased amounts reflect adjustments to account for inflation and changes to the program.
Each EB-5 investment must also create ten full-time jobs for U.S. citizens. In addition to these eligibility criteria, the current United States Citizenship and Immigration Services (USCIS) processing times for EB-5 petitions is a little over four years. An investor must then complete a 24-month conditional residence period in the United States, followed by filing another petition to remove those conditions that is also averaging a little over four more years. Even in a best-case scenario (no country-based visa quota backlogs), the timeframe for receiving permanent residence through the United States EB-5 program is currently a shocking 10.5 years — and all this after investing a minimum of $800,000 in a TEA or $1,050,000 for non-TEA investments. Additionally, filing fees have increased as part of the 2023 updates, adding further financial burden to the EB-5 process.
The E-2 Visa Alternative
Like EB-5 visas, the E-2 visa is an investment-based visa through which an approved investment in a United States business forms the basis of the visa status. However, unlike with an EB-5 visa, an E-2 visa does not grant the investor or their immediate relatives permanent residence. Rather, approved investors and their immediate family members (for children under 21 years old) enjoy what is known as an “evergreen” non-resident visa, which allows them to live, work, and go to school in the United States on a renewable basis as long as the investor’s business remains operational.
The E-2 visa is a creature of treaty and is an obligation of the United States to citizens of countries with which it has treaties of Friendship, Navigation and Commerce, bilateral investment treaty, or their equivalent. The U.S. has such treaties with 80 nations that qualify their citizens for E-2 eligibility. The basics of E-2 investment eligibility are the following:
- Be a national of a qualifying country;
- Have invested or be actively in the process of investing a substantial amount of capital in a bona fide enterprise; and
- Seek to enter the United States solely to develop and direct the investment enterprise, which is evidenced by at least 50% ownership in the enterprise or possession of operational control of the same.
There is no statutorily defined minimum investment amount for purposes of E-2 eligibility. The requirement is simply that the investment amount be “substantial”. This can be generally understood as an investment commensurate with a qualifying ownership interest of an enterprise or an amount that will effectively capitalize it. The analysis of the sufficiency of the investment depends on the nature and scope of the business but it is typically much less than many golden visa programs including EB-5. For example, if an investor were to open and operate a bodega in New York City, an eligible substantial investment would be much lower than if the investor were opening a manufacturing facility there. There is also no job creation requirement for U.S. citizens as there is with an EB-5 visa.
Another favorable aspect of E-2 visas is that the petitions are not adjudicated by the United States Citizenship and Immigration Service (the USCIS), unless the investor files the petition from within the United States, which is absolutely not necessary to do. In recent years, the fact that E-2 visas are not decided by the USCIS has become more important because in addition to the USCIS’s extensive processing times, the USCIS has become hostile towards immigration petitions. E-2 visas are decided by the United States Department of State abroad. Because the basis of the visa is both non-immigrant in nature and a U.S. treaty obligation, E-2 petitions often enjoy processing times measured in months not years, as well as a far less hostile adjudicatory environment.
Company Registration Requirement at Consular Posts
A key difference between the E-2 visa and other investment-based visas is that the E-2 visa application is typically processed at U.S. consular posts, not through USCIS. Since July 2022, many consular posts have required the registration of the applicant’s company as part of the E-2 application process. This involves providing extensive documentation to demonstrate the bona fide nature of the U.S. business, including evidence of substantial investment, ownership structure, and business viability. Without company registration, E-2 visa applications may be delayed or rejected. Consular officers carefully review the company’s financials, operational plans, and ownership structure to ensure compliance with E-2 eligibility requirements.
Client experiences and anecdotal references suggest that some consulates are more flexible with processing times than others, with wait times varying from weeks to several months depending on the post. For instance, E-2 visa processing in countries such as Canada and the U.K. has generally remained efficient, while post-COVID backlogs at other consular posts, particularly in Latin America and parts of Asia, have caused significant delays. Investors are encouraged to consult with experienced immigration counsel to navigate these challenges.
E-2 Essential Employees
Another major plus for an E-2 visa is that it allows the investor to bring citizens of their country to the U.S. to work for their U.S. business as essential employees. The eligibility requirements for being approved as an essential employee under an E-2 visa can be complex, but a qualifying essential employee and their immediate family are granted the same status in the US as the investor.
Maintaining E-2 Status
To maintain E-2 status, the business must remain operational and the investment must be at risk for the duration of the visa period. Anecdotal evidence from immigration attorneys indicates that consular officers are increasingly scrutinizing the financial health of businesses during visa renewals, with particular attention to whether the business continues to generate enough revenue to support the investor and employees. E-2 visa holders must be prepared to show updated financial statements, tax returns, and other evidence that the business remains viable.
Consider the E-2 Visa
The E-2 visa can be an attractive option for investors who wish to obtain lawful status in the United States for themselves and their immediate family at a lower cost and faster speed than an EB-5 visa. However, given the evolving nature of consular processing and company registration requirements, it is crucial to seek legal guidance to navigate these complexities. The flexibility of the E-2 visa, particularly in terms of no minimum investment amount or job creation requirements, makes it a popular choice for foreign nationals from treaty countries who are looking for a more accessible U.S. investment visa.
