Definition   

Employee   

Treaty Country   

Trade   

Substantial   
and Principal Trade   

Substantial Amount of Capital   

Marginal Investment   

Solely to Develop and Direct   

Executive and Supervisory   
Character   

Special Qualifications   

Filing and Duration   

Processing Times and Fees   

DEFINITION
Treaty trader or treaty investor status is available to a national of a country with which the United States has a qualifying treaty of commerce, where the foreign national is coming to the United States to engage in substantial trade, or to direct or develop an enterprise in which he or she has made a substantial investment.

An alien may be classified as a treaty trader (E-1) if he or she will be in the United States solely to carry on international trade of a substantial nature, either on his or her behalf, or as an employee of a foreign person or organization, engaged in trade principally between the United States and the treaty country of which the alien is a national.

An alien may be classified as a treaty investor (E-2) if the alien has invested a substantial amount of capital in a bona fide enterprise in the United States, as distinct from a relatively small amount of capital in a marginal enterprise solely for the purpose of earning a living, and is seeking entry to the United States solely to develop and direct the enterprise.

EMPLOYEE
An alien employee of a treaty trader or treaty investor may also be classified as an E-1 or E-2 if the employee is in or is coming to the United States to engage in duties of an executive or supervisory character, or if employed in a lesser capacity, the employee has special qualifications that make his or her services essential to the efficient operation of the enterprise. The employee must have the same nationality as the principal alien employer.

The principal alien employer must be a person having the nationality of the treaty country, or an enterprise or organization at least 50 percent owned by persons having the nationality of the treaty country.

A treaty alien may engage only in employment which is consistent with the terms of his or her status and the activity forming the basis for the treaty status. Treaty employees may perform work for the parent treaty enterprise, or any subsidiary.

TREATY COUNTRY
A treaty country is a foreign state with which a qualifying Treaty of Friendship, Commerce, or Navigation, or its equivalent, exists with the United States.

Treaty countries include most of the major industrialized nations, including the United Kingdom, most Western European countries, Canada, Japan and Australia, as well as many others.

Most treaties permit the nationals of the treaty country to obtain either E-1 or E-2 status, but some treaties only permit obtaining one or the other.

TRADE
Items of trade include, but are not limited to, goods, services, international banking, insurance, transportation, communications, data processing, advertising, accounting, design and engineering, management consulting, tourism, technology, and some news gathering activities.

Trade is the existing international exchange of items of trade for consideration between the United States and the treaty country.

Existing trade includes successfully negotiated contracts binding upon the parties which call for the immediate exchange of items of trade. Domestic trade, or the development of domestic markets without international exchange, does not constitute trade.

SUBSTANTIAL AND PRINCIPAL TRADE
Substantial trade is defined as an amount of trade sufficient to ensure a continuous flow of international trade items between the United States and the treaty country. This continuous flow contemplates numerous transactions over time.

Treaty trader status may not be based on a single transaction, no matter how protracted or monetarily valuable. Although the monetary value of the trade item being exchanged is a relevant consideration, greater weight will be given to more numerous exchanges of larger value.

There is no minimum requirement with respect to the monetary value or volume of each individual transaction. In the case of smaller businesses, the income derived from numerous transactions which is sufficient to support the treaty trader and his or her family constitutes a favorable factor in determining substantial trade.

Principal trade between the United States and the treaty country exists when over 50 percent of the volume of international trade is conducted between the United States and the treaty country.

INVESTMENT
An investment is the treaty investor's placing of capital, including funds and other assets, at risk in the commercial sense with the objective of generating a profit.

The treaty investor must be in possession of and have control over the capital invested. The capital must be subject to partial or total loss if investment fortunes reverse.

Such investment capital must be the investor's unsecured personal business capital or capital secured by personal assets. Capital in the process of being invested or that has been invested must be irrevocably committed to the enterprise.

The alien may use any legal mechanism available, such as the placement of invested funds in escrow pending approval of treaty classification, that would extend personal liability protection to the treaty investor in the event the application for E-2 classification is denied.

The enterprise in which the alien is investing must be a real, active, and operating commercial or entrepreneurial undertaking which produces services or goods for profit.

SUBSTANTIAL AMOUNT OF CAPITAL
A substantial amount of capital is an amount which is:

1. Substantial in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise under consideration;

2. Sufficient to ensure the treaty investor's financial commitment to the successful operation of the enterprise

3. Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise.

Generally, the lower the cost of the enterprise, the higher, proportionately, the investment must be to be considered a substantial amount of capital.

Although the regulations do not provide a specific monetary amount which constitutes a substantial investment, an investment of at least $200,000 is perhaps a safe harbor as a minimum monetary amount. But even an investment of that amount would be insufficiently substantial if the capital needs of the enterprise are far greater.

An investment of approximately 50 % of the capital requirements of the enterprise would perhaps meet the test of substantiality.

MARGINAL INVESTMENT
In order to qualify for treaty investor status, the enterprise may not be marginal. A marginal enterprise is an enterprise that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family.

An enterprise that does not have the capacity to generate such income, but has a capacity to make a significant economic contribution is not a marginal enterprise.

The projected future income-generating capacity should generally be realizable within 5 years from the date the alien commences the normal business activity of the enterprise.

SOLELY TO DEVELOP AND DIRECT
An alien seeking classification as a treaty investor (or in the case of an employee of a treaty investor, the owner of the treaty enterprise) must demonstrate that he or she does or will develop and direct the investment enterprise.

The applicant must establish that he or she controls the enterprise by demonstrating ownership of at least 50 percent of the enterprise, by possessing operational control through a managerial position or other corporate device, or by other means.

EXECUTIVE AND SUPERVISORY CHARACTER
The applicant's position must be principally and primarily, as opposed to incidentally or collaterally, executive or supervisory in nature.

Executive and supervisory duties are those which provide the employee ultimate control and responsibility for the enterprise's overall operation or a major component thereof.

In determining whether the applicant has established possession of the requisite control and responsibility, the INS will consider, where applicable:

1. That an executive position is one which provides the employee with great authority to determine the policy of, and the direction for, the enterprise;

2. That a supervisory position provides the employee supervisory responsibility for a significant proportion of an enterprise's operations and does not generally involve the direct supervision of low-level employees;

3. Whether the applicant possesses executive and supervisory skills and experience; a salary and position title commensurate with executive or supervisory employment; recognition or indicia of the position as one of authority and responsibility in the overall organizational structure; responsibility for making discretionary decisions, setting policies, directing and managing business operations, supervising other professional and supervisory personnel; and that, if the position requires some routine work usually performed by a staff employee, such functions may only be of an incidental nature.

SPECIAL QUALIFICATIONS
Special qualifications are those skills and/or aptitudes that an employee in a lesser capacity brings to a position or role that are essential to the successful or efficient operation of the treaty enterprise.

In determining whether the skills possessed by the alien are essential to the operation of the employing treaty enterprise, the INS will consider, when applicable:

1. The degree of proven expertise of the alien in the area of the operations; whether others possess the applicant's specific skill or aptitude; the length of the applicant's experience and/or training with the treaty enterprise; the period of training or other experience necessary to perform effectively the projected duties; the relationship of the skill or knowledge to the enterprise's specific processes or applications, and the salary the special qualifications can command. Knowledge of a foreign language and culture does not, by itself, meet the special qualifications requirement.

2. Whether the skills and qualifications are readily available in the United States. Skills that are essential to start up an enterprise may no longer be essential after the initial operations are complete and running smoothly. Some skills are essential only in the short-term for the training of locally hired employees.

Under certain circumstances, an applicant may be able to establish his or her essentiality to the treaty enterprise for a longer period of time, such as in connection with product improvement, quality control, or the provision of services not yet generally available in the United States

FILING AND DURATION
Unlike the other non-immigrant work classifications, treaty trader or treaty investor status may be initiated either at an American Consulate outside of the United States, or if the applicant is in the United States, by a petition filed with the INS.

In order for the applicant to file in the United States, he or she may not be in visa waiver status. If the applicant is in the United States, he or she may be granted treaty trader or treaty investor status for an initial period of not more than two years. Requests for extensions of stay also may be granted in increments of not more than two years.

With limited exceptions, it is presumed that employees of treaty enterprises with special qualification who are responsible for start-up operations should be able to complete their objectives within two years. Absent special circumstances, such employees will not be eligible to obtain an extension of stay.

There is no specified limit to the number of extensions of stay that a treaty trader or treaty investor may be granted. Pursuant to a recent change in the law, the spouse of a treaty alien may request work authorization.

Even if an applicant obtains treaty trader of treaty investor status while in the United States, he or she must file a new application for an E-1 or E-2 visa at an American Consulate abroad after departing the United States.

The American Consulate is not bound by the decision previously rendered by the INS in granting such treaty status, but will consider the case as new.

The American Consulates grant treaty trader or treaty investor visas for up to five years, but even with a five year visa, the alien is only given treaty status upon entering the United States in two year increments.

Each time the alien leaves the United States during the five years of the visa, he or she is granted treaty status for two years upon his or her return to the United States.

Therefore, an alien could avoid filing extensions of treaty status in the United States simply by leaving the country and returning during the five year life of the treaty visa and obtaining two more years upon his or her return.

PROCESSING TIMES AND FEES
For aliens in the United States, petitions for treaty status must be filed at one of four regional offices of the INS and typically take approximately 30-90 days to process. The filing fee to the INS for an E-1 or E-2 petition is $130.

If the parties wish to obtain expedited adjudication of the petition, they must pay a Premium Processing fee of an additional $1,000 to the INS, which guarantees a response from the INS, but not necessarily an approval, within 15 days of the date of filing.

For aliens outside of the United States, applications for treaty trader or treaty investor visas are filed at an American Consulate and typically take 30 days or less to process. The filing fees vary from country to country.