E-2 Treaty Investor Visa Requirements and Pitfalls

In May 2020, USCIS retired its Adjudicator’s Field Manual (AFM), a collection of our immigration policies and procedures. AFM guidance on E-2 visas is still relevant as of the date of this writing:

34.3 Treaty Investors.

(a) Eligibility Requirements

(1) The Business .

The E-2 enterprise (company, corporation, etc.) must involve the investment of a substantial amount of capital, rather than a marginal investment solely for the purpose of earning a living for the investor.

(2) The Alien .

An E-2 alien may be the actual owner of a qualifying enterprise or an employee of such enterprise working in an executive or supervisory capacity or in a capacity which requires special qualifications essential to the
operation of the enterprise. Such employees must have the same nationality as the principal employer. An E-2 alien may perform services for the parent treaty organization or any of its subsidiaries

(3) Nationality .

The E-2 principal must be either a person in the U.S. having the nationality of the treaty country (or, if not in the U.S., otherwise entitled to treaty investor status), or be a qualifying employee of an enterprise at least 50% owned by persons of such nationality. The list of treaty countries is contained in the Department of

State’s Foreign Affairs Manual , chapter 41.51, Exhibit 1 . Note that the list for treaty investors is different than
the list for treaty traders.

Note 1:
The nationality of dependents is irrelevant to their classification.

Note 2:

The spouse of an E nonimmigrant is may apply for work authorization.

(b) Application Process .

Because a treaty investor does not require a separate petition, E-2 status may be obtained either directly through the Department of State (by applying for an E-2 visa), or in the case of an alien already in the U.S., by applying to the appropriate service center for a change of status on Form I-129 , including the E supplement. Supporting documents to be submitted with an E-2 application include documents to establish
the nature of the employment and the ownership of the enterprise, as described in paragraph (a), above.

(c) Approval .

If, from the evidence submitted, the application appears approvable endorse the approval block and issue
Form I-797 (through CLAIMS) showing the period of validity and the alien beneficiary’s name and classification.

(d) Denial .

If the evidence does not clearly establish the beneficiary’s eligibility for E-2 status and a request for additional evidence does not appear warranted, prepare a denial notice setting forth the specific reasons why the application cannot be approved. There is no appeal from a denial of E-1 classification. However, if the facts of the case are novel, complex or potentially of value as a precedent, the decision of the director
may be certified to the Administrative Appeals Office pursuant to 8 CFR 103.4 .

(e) Advisory Letters .

An E-2 may seek advice from USCIS concerning any change in employment (e.g., capacity of employment, company restructuring, etc.) which might affect his or her status. The adjudicator reviewing the advisory request must either recommend the filing of another application, or prepare a new I-797 reflecting the non-substantive changes.

(f) Technical Issues .

(1) Ownership of an E-2 Company .

An alien employed by a foreign person may not be classified as an E-2 nonimmigrant unless the foreign employer is also classified as an E-1 nonimmigrant, or if abroad, the employer must be eligible for admission to the U.S. as an E-2 nonimmigrant. If the employer is a corporation or other business organization, the majority ownership (at least 50 percent) of the business must be by aliens who are of the same nationality as the employee and who, if not residing abroad, are maintaining status under section 10 1(a)(15)(E) of the Act. An alien who is a lawful permanent resident of the U.S. does not qualify to bring employees into the U.S. under section 101(a)(15)(E). Shares of a business owned by lawful permanent resident aliens cannot be considered in making determinations of majority ownership by nationals of the treaty country.

(g) Precedent Decisions Involving E-2 Treaty Investors

· Matter of Kobayashi and Doi , 10 I&N Dec. 425 (District Director 1963; Regional Commissioner 1963; Deputy Associate Commissioner 1963). Managerial employees charged with the training or instruction and supervision of entertainers and waiters in a theater restaurant are not employed in the
“responsible capacity” as required by 22 CFR 41. They are not properly classifiable as nonimmigrant employees of a treaty investor.

· Matter of Udagawa , 14 I&N Dec. 578 (BIA 1974) . Applicant for admission who will supervise and train American workers as tempura cooks at a Japanese restaurant and assist in the preparation of meals during the training period is inadmissible as an employee of a treaty investor because he will not be employed in a “responsible capacity” with the meaning of 22 CFR 41.51.

· Matter of Laigo , 15 I&N Dec. 65 (BIA 1974). A treaty investor is precluded from engaging in unauthorized employment by the provisions of both 8 CFR 214.1(e) and 8 CFR 214.2(e). Unauthorized employment constitutes a failure to maintain status.

· Matter of Lee , 15 I&N Dec. 187 (Regional Commissioner 1975) . E-2 status denied where the total value of the enterprise was $64,000 and the applicant has invested only $10,000, but alleges that at some unspecified future time he will increase his investment to more than 51% of the enterprise. The applicant has failed to establish that his investment does not represent a “small amount of capital in a marginal
enterprise solely for the purpose of earning a living” contrary to the provisions of 22 CFR 41.51.

· Matter of Chung , 15 I&N Dec. 681 (Regional Commissioner 1976) . An application filed under section 248 of the Act for change of nonimmigrant classification from visitor to treaty investor is denied where the applicant’s only showing was that he intended to invest $10,400 on deposit in a savings account in a shoe manufacturing business. The mere intent to invest does not meet the requirements of the Act.

· Matter of Nago , 16 I&N Dec. 446 (BIA 1978) . Where the applicant for admission is a highly trained chef who is engaged in a specialized form of Japanese cooking (Nabemono) and has been brought to the U.S. to impart his knowledge, the BIA concluded that the applicant is employed by a treaty investor in a
responsible capacity and therefore qualifies as an E-2 nonimmigrant.

· Matter of Khan , 16 I&N Dec. 138 (BIA 1977) . The respondent had at best a subjective intention to invest in the future. Although he may have invested funds in the past, that does not establish that he will invest funds in the future. More is required for such a showing.

· Matter of Csonka , 17 I&N Dec. 254 (Regional Commissioner 1978) . The alien who had not invested his own funds did not qualify as a treaty investor. He had acquired loans which had been guaranteed by another part .

USCIS Legacy Adjudicator’s Field Manual

Issues that come up commonly in E-2 RFEs:

– USCIS deems the investment to be insufficient to support the business proposition

– the proposed enterprise does not provide jobs for US workers, supporting only the investor and their family (this is known as the marginality issue, business must show growth to hire US workers)

– the applicant’s investment is considered not at risk, or too easily “retrievable”. Invested did not risk funds

– the investor owns less than 50% of the proposed enterprise

– the investment amount does not equal at least 50% of the total investment

– the proposed enterprise is not considered legitimate under US immigration law

– the applicant failed to demonstrate close ties to their home country

Sample Initial evidence requirements:

I. E-1 and E-2 Proof of Nationality of Investor or Applicant

·         Photocopy of passport biographical page

·         Evidence of legal status in Canada

II. E-1 and E-2 Ownership Documents (either A, B or C):

A. Sole Proprietorship:

·         Business registration documents

B. Partnership:

·         Partnership or joint venture agreement

·         Shares/stock certificates indicating total shares issued and outstanding shares

C. Corporation:

·         Shares/stock certificates indicating distribution of ownership, i.e. shares held by each firm and shares held by individual owners

·         Corporate matrix

·         If publicly traded on the principal stock exchange of a treaty country, enclose a sample of recently published stock quotations

III. E-2 Investment

A. For a New Enterprise: (show estimated start-up cost)

·         Trade Association Statistics

·         Chamber of Commerce Estimates

·         Market Surveys

B. Source of Investment:

·         Personal statement of net worth prepared by a certified accountant

·         Transactions showing payment of sold property or business (proof of property ownership and promissory notes) and rental income (lease agreements)

·         Voided investment certificates or internal bank vouchers and appropriate bank statement crediting proceeds

·         Debit and credit advices for personal and/or business account withdrawals

·         Audited financial statement

·         Annual report of parent company

·         Net worth statements from certified professional accountant

C. Evidence of Investment:

2. New Enterprise:

·         Inventory listing, shipment invoices of inventory, equipment or business related property

·         Receipts for inventory purchases

·         Canceled checks or official payment receipts for expenditures

·         Canceled check for first month’s rent or full annual advance rent payment

·         Lease agreement

·         Purchase orders

·         Improvement expenses

·         Initial business accounts statements

·         Wire transfer receipts

IV. E-2 Marginality

For New Business:

·         Payroll register, records of salaries paid to employees (if any), employee data including names, rates of pay, copies of W-2s

·         Financial projections for next 5 years, supported by a complete and thorough business plan

·         Business income and current corporate tax returns

·         Proof of registration, ownership, audited financial and review engagements

V. E-2 Real & Operating Commercial Enterprise

·         Occupational license

·         Business License/business permits

·         Sales tax receipt

·         Utility/telephone bills

·         Business transaction records

·         Current/commercial account statements

·         Letters of credit

·         Invoices from suppliers

·         Advertising leaflets

·         Business brochures/promotional literature

·         Newspaper clippings

VI. E-1 and E-2

Executive/Managerial/Supervisory/Essential Skills

·         Letter from the E-visa enterprise providing specific information on the applicant and the reasons for his/her assignment to the United States. The letter should explain the employee’s role in the E-visa company (job title and duties), the applicant’s executive or supervisory responsibilities or, if not a supervisor, his/her specialist role, the level of education and knowledge required by the employee’s position, his/her employment experience, progression of promotion or high-level training or special qualifications and the reasons why a U.S. citizen or legal permanent resident cannot fill the position (if the position is not managerial or supervisory).

·         Letter from responsible official at the U.S. company or office identifying the need for assigned employee.

·         Organizational chart showing current staffing pattern at U.S. company

·         Evidence of executive, supervisory or specialized knowledge, education, experience, skills or training, such as certificates, diplomas or transcripts

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Remember that each case is different. Prior results do not guarantee a similar outcome. Read the full disclaimer here.