Brandon:— “Thank you, Patrick, thank you for the invitation. Looking forward to our discussion.”
B:— “Yeah, so the E2 investor visa is one of the oldest visa categories that the United States has had for allowing people overseas. The E2 is based upon a trade investment treaty between the United States and a particular country overseas. The first E2 treaty in existence was with the United Kingdom, which dates back to the 1800s, as an example. So right now there are about 90 countries worldwide, whose nationals and citizens can qualify for an E2 visa because their country has the requisite treaty with the United States.”
B:— “That’s correct. So the kind of the big omissions from the E2 list in no particular order are the People’s Republic of China, India, and Vietnam are three examples that stick out as their citizens not currently having E2 eligibility.”
B:— “That’s right. Brazil’s probably another great example of a country that is currently omitted from the list. So then, individuals start looking back to their family tree to see who has a grandparent from Italy or Spain or somewhere in Western Europe that does have the E2 treaty.”
B:— “That’s correct.”
B:— “I mean, because basically, the U.S. and the Brazilian governments have yet to come to an agreement. It’s bilateral. So very difficult for U.S. citizens, for example, to obtain investor visas to go to Brazil, and likewise. So these are—”
B:— “Yes. And so you have to look at other options. And so, you know, sometimes these negotiations drag on for years and years and years. So the most salient example of that is Israel. So Israeli citizens have qualified for what’s known as an E-1 treaty trade visa, for as long as I can remember, but negotiations and the subsequent implementation of E2 privileges for Israeli citizens have been dragging on for 10, 15 plus years now. I think it’s only now that Israeli citizens are eligible.”
B:— “And that’s the other thing, too, is…most E2 visas are good for five years. It is based upon agreed reciprocity, these do change. So say an example for Mexico. So, you know, 15 years ago, Mexican citizens were issued five-year E2s. And basically, overnight, the U.S. government cut that reciprocity to one year.”
B:— “I mean, it’s great for an immigration attorney such as myself because you’re basically constantly renewing someone’s visa.”
B:— “But it’s so inefficient. Or I would imagine for the U.S. government that basically have to keep renewing or keep having visa appointments every year. And not to mention the stress and trauma on the business and the family having to re-maintain E2 compliance, basically, on a constant, consistent basis.”
B:— “And France has cut…I believe cut reciprocity for the U.S. down to, I think it was like, either three months or one year, but fortunately, the U.S. government has not retaliated yet against French nationals.”
We mentioned a few times about nationality. And so, basic requirements for an E2 visa is that a U.S. business has to be more than 50% owned by nationals from the treaty country. So, for example, if you want to qualify for E2, you know, from Mexico, two things have to happen. You and any other subsequent applicants for the E2 business, all have to have Mexican passports. And the U.S. business has to be more than 50% owned by Mexican nationals, either individuals with Mexican citizenship and/or entities registered out of Mexico. That’s the kind of base bare requirement.
And so sometimes there’s the impact if you sell the business, and the business falls below 50% ownership, that can lead to, you know, instant revocation of all the E2 status. So this is something to mention to keep in mind going forward, but that 50% ownership issue is a bear requirement.”
B:— “Yeah, absolutely.
You know, some of the biggest multinational companies in the world are heavy users of the E2 Visa, such as Sony, or Allianz, or, you know, any of the big companies. They’ve been using these for decades to transfer, you know, personnel to the U.S. on E2 visas.
The E2s that we’re talking about in this context mostly would be in the startup realm or purchase of an existing business realm, depending on the particulars, but it’ll generally start off as, you know, the investor, the manager, or the owner will usually process the E2 first.
But as the business grows, and depending on its growth trajectory, the business can sponsor additional E2 employees, you know, skilled personnel, managerial personnel to come to the U.S. on the E2 visa as well.”
B:— “Yeah. That’s a great question. And that’s one of the challenges of the E2 visa we should talk about is, you know, unlike EB-5 and some of the other types of visas out there, there’s no real, strict numerical requirements for what constitutes an approvable E2. And so, you know, each consular post, an embassy out there has their own sort of unofficial standard for what qualifies. So, for example, one consular post may approve an E2 for an initial investment of say $50,000. Whereas another consular post won’t approve anything under say $150,000, $200,000, $250,000 depending on the business. So it’s very important to know the unofficial standards of the post that you’re applying at before you apply because otherwise… For example, if you take a $50,000 investment to the U.S. consulate in Vancouver or London or Toronto, there’s zero chance of it getting approved.”
B:— “You just have to rely on…you know, you definitely need solid legal advice, and whoever you hire, whether it’s Meyer Law Group or someone else, you just have to know the lay of the land.”
B:— “Yeah, we have a discussion group that’s constantly discussing. Right now, the hot topic seems to be E2 adjudications out of the U.S. Embassy in Rome. Apparently, there are some, not very positive developments on that post, same as Paris. So it’s just being in the network and working with people who this is what they do, and won’t send you to Vancouver with a $25,000 investment.
But to answer your question, you know, at what point is it good for a company, you know, okay, so they get the initial…and should bear in mind too that initial E2 approval is a two-step process.
First, the company itself…the U.S. company itself has to be approved as an E2 treaty enterprise, by the consulate or embassy. And then once that’s done, that’s when the first transferee can submit their individual visa application.
Then after that, you know, any number of subsequent employees, as long as they have the nationality, can apply. But then, —you know, Patrick, well,— if you have five people in the U.S., is that a good time to start transferring personnel? Or is it 10? And the answer is, it really depends on the consular post, and how well the business is doing in the U.S. I think, most consular posts, you could probably submit that second E2 application if you have five people in the U.S. It will certainly be easier if you have 10, you know. Because there are no guidelines in terms of investment, as we mentioned, there’s also no guidelines in terms of headcount, or revenue,—”
B:— “It’s good and bad. It’s good in some instances, it’s bad in others. So, you know, as a practitioner trying to advise on these points, you know, my answer to everything is more is always better than less. I mean, you can’t go wrong. I mean, if you hire more people, if you invest more money, if you have more revenue, if you just have more and more and more, it makes it so much easier for a U.S. consular official to approve your application.”
B:— “No, absolutely not. But then if it looks like to the consular officer, that you the applicant are trying to get this through with the absolute bare minimum of everything, investment amount, business idea, headcount, revenue projections, then that just makes it easier for the officer to feel good about denying your case, which is obviously—”
B:— “Right. So, if you’re trying to do, say, a manufacturing facility, Berkeley is trying to do, let’s just say, you know, a boba tea franchise, for example, you know, obviously, to get a manufacturing facility off the ground is going to require substantially more capital and more headcount than it would be for a boba tea shop. The consulates do look at that to a judge that’s known as the principle of marginality. So basically, it’s not only…can the business…is the business capitalized enough? Is the plan sufficiently proportional to the type of business that purports to be operated? And more importantly, is it just a business you know, for, you know, one or two investors and their families to just, you know, basically get by and make a living?”