An alien may enter the United States of America for an indefinite time to conduct substantial international trade between the alien’s country of nationality and the United States on E-1 treaty trader visa, pursuant to an E-1 treaty of friendship, commerce, and navigation or other arrangement between the two countries.
An alien many likewise enter the United States to form, operate, buy, or develop, and direct an enterprise, in which the alien has invested, or is actively in the process of investing, a substantial amount of capital on E-2 treaty investor, visa pursuant to an E-2 treaty between the alien’s country of nationality and the United States.
Both E-1 treaty trader and E-2 treaty investor visas or statuses are nonimmigrant, while investment under the Fifth Preference Employment-Based employment creation (investor) (EB-5) may initially result in the grant of conditional residence (CR) status for two (2) years to an investor alien, who invests, or is in the process of actively investing $1,000,000 or $500,000 (in a targeted employment area) in a commercial enterprise that creates at least ten (10) employment for U.S. citizens or immigrant workers.
Investment in an immigrant investor pilot program for designated regional centers would relax the employment creation requirement of ten (10) full-time jobs for qualifying employees. The conditions in the CR status can be removed by filing a petition of removal of CR status (Form I-829) within ninety (90) days before the second anniversary of the CR status, and upon approval, results in a lawful permanent resident status (green card).
I. E-1 Treaty Trader Category Requirements:
An alien may apply for an E-1 non-immigrant visa with the U.S. Consul in his / her country of nationality or residence on Form DS-156 and DS-156E, or for change of status in the United States on Form I-129.
A. Substantial Trade:
The alien applicant has to provide proof of “substantial trade,” trade being defined as “the existing international (not domestic) exchange of items of trade for consideration between the U.S. and the treaty country.”
Evidence would consist of bills of loading, letters of credit, purchase orders, insurance policies on imported or exported commodities, carrier inventories, and other receipts on import/export activities, that show continuous flow of international trade between the two countries.
There are no requirements for the volume and value of the exchanges of items of trade, but the volume counts more towards “substantial trade,” than the value thereof. “Items of trade” include goods, services, transportation, advertising, accounting, consulting, tourism, etc.
B. Ownership of Corporation:
If the treaty trading activities are to be performed by a foreign corporation, the nationality of such corporation is the nationality of the owners of at least fifty (50) percent of its stocks, who are nationals of the particular treaty country.
Such owners may enter the U.S. on E-1 status as principal employers including their spouses and children below 21 years of age, and hire key employees from the treaty country, such as executives, supervisors, or other “essential” employees.
C. Admission of Stay As E-1 or E-2 Status Holder:
Aliens with E-1 as well as E-2 visas may be admitted to the United States, or aliens may change status in the United States to E-1or E-2 for two (2) years of initial admission and extensions of stay at increments of two (2) years without limit.
And there is no restriction to adjustment of status to lawful permanent residence by employment-based petition or family-based petition, as long as the E-1 or E-2 status is maintained, unless adjustment is through marriage to a U.S. citizen spouse, which waives unlawful presence and employment without authorization.
II. E-2 Treaty Investor Category Requirements:
A. Substantial Investment:
The test for substantial investment in the United States is defined by the U.S. Department of State in relation as the “relative/proportionality” test, composed of three components: (1) amount of investment in relation to total cost to the enterprise, (2) amount of investment sufficient to ensure the investor’s commitment to successful operation of the enterprise, and (3) magnitude of investment that the investor will successfully develop and direct the enterprise.
In other words, the lower the cost of purchasing or creating the enterprise, the higher the investment ratio must be. As suggested by the regulations, if the total cost of the enterprise is $100,000 or less, then E-2 investor should provide 100 percent of that total cost.
A business plan for 5 years for an enterprise should be submitted and state the necessary amount of investment to establish a viable enterprise. Thus, a consultancy business would relatively require less investment than a manufacturing company. Income from the investment should be more than a living wage for the E-2 investor and his/her family.
B. E-2 Position In the Enterprise:
The E-2 investor must develop and direct a commercial enterprise as principal investor, who may hire E-2 employees who: (1) must have the same country of nationality as the treaty employer; and (2) must be executives, supervisors, or essential employees of the enterprise.
Essential employees on E-2 employee status must be indispensable to the success of the business, with skills required at different stages of the operation of the enterprise. But for E-1 or E-2 employees to qualify and maintain status, the employers should hold E-1 or E-2 status, if in the United States, and if not, should be classifiable in that category.
C. E-1 and E-2 Spouses and Children:
Spouses and minor children (below 21 years of age) of E-1 and E-2 principal status holders may accompany or follow to join the E holders, even though their nationality is different from their spouse or parent.
Moreover, E-1 and E-2 spouses are eligible for employment authorization on Form I-765 and can obtain such authorization on Form I-766. Minor children of E principal cannot, however, obtain employment authorization, but can attend school in the United States without changing status from E-1 or E-2 children to F-1 student status.
III. EB-5 Employment Creation (Investors) Requirements:
A. Investment In “New” Commercial Enterprise:
The United States has allowed aliens who invest $100,000,000 or $500,000 under certain circumstances in a new commercial enterprise that employs full-time at least ten (10) U.S.-citizens or immigrants, and engage in the business on day-to-day basis or through policy formation to obtain conditional residency, and upon removal of the conditions, lawful permanent residence.
A commercial enterprise is “new” if the investment is in a company formed after November 29, 1990. If formed before that date, a commercial enterprise can still be considered “new,” if reorganized or restructured to form in a new commercial enterprise, or expanded to substantially change its net worth or number of employees.
The investment in EB-5 employment creation (investor) category, as in E category, must be at risk in a business activity, and not just in a passive investment plan.
B. Amount of Investment Capital:
The alien who seeks to qualify under EB-5 employment creation (investor) category must invest, or is actively in the process of investing, the sum of $1,000,000, or the sum of $500,000, if in a targeted employment area (with small population and high unemployment), and must complete the investment and the employment requirement by the end of the two-year conditional residency period.
The investment may take the form of cash, inventory, equipment, and other unencumbered assets for a new commercial enterprise. Investments in several commercial enterprises cannot be combined to qualify for the capital requirement. Indeed, each EB-5 qualifying investor must separately meet the aforesaid investment capital and employment creation requirements. Moreover, the capital contribution must come from lawful means, as in E category.
C. Application For and Removal of CR Status:
The application for EB-5 category is on Form I-526, and the removal of conditions petition is on Form I-829, that are filed either at the California Service Center or Texas Service Center.
An approved Form I-526 grants conditional residency to the principal EB-5 investor and to his/her spouse and minor children (below 21 years of age) for two years. Form I-829, the petition for removal of conditions, must be filed within ninety (90) days before the second anniversary of the CR status. Otherwise, the CR status is automatically terminated by the second anniversary thereof.
In order to obtain removal of the conditions, the EB-5 conditional resident investor must show: (1) investment of the required capital or active investing thereof; (2) creation or expectation to create the required employment creation within a reasonable period of time; and (3) sustainment of the capital investment in and of the commercial enterprise.
But unlike in conditional residency through marriage to a U.S.-citizen spouse, where the Form I-751 may be filed jointly, if still married, or separately (as a waiver) if divorced, Form I-829 may be filed to include the divorced spouse or married or 21-year-old children. They may, however, file separately.
Moreover, if the EB-5 principal investor dies during the 2-year conditional residency period, the surviving spouse and children may file Form I-829 and obtain permanent residency, if all the EB-5 requirements have been met.
The United States needs foreign capital from alien investors. Welcome to the United States!