E-2 Treaty Investor Visas—A frequently overlooked alternative to H-1Bs
An increasingly competitive talent market and heightened scrutiny in traditional visa categories such as the H-1B, have compelled many employers to consider alternative strategies to recruit and retain foreign talent in the United States. One frequently overlooked option is the E-2 “Treaty Investor” visa. Though traditionally used for individual investors or smaller companies branching into the U.S., the E-2 also provides an important route for large employers to move managers and other essential talent into the U.S. and retain them while avoiding the unpredictable adjudication trends occurring in other visa categories.
E-2s are limited to employers and employees who are nationals of a country holding a treaty with the U.S. The primary challenge for larger employers is establishing the qualifying nationality of the corporate entity making the investment, which requires documentation of majority ownership by nationals of the treaty country. Publicly traded companies are generally presumed to hold the nationality of the country where they are listed. According to Forbes’ Global 2000 ranking, 70% of the largest 2,000 public companies are listed or majority-owned outside the U.S. Many of these companies are listed in treaty countries, such as Japan, the U.K. and South Korea, and would likely benefit from E-2 visas for a large percentage of their workforces. In other words, the E-2 category not only lends itself well to organizations in the early stages of operating in the U.S.—it also offers flexibility to some large organizations that other visa categories do not.
The basic E-2 criteria are: 1) the petitioning employer or investor must be a national of a treaty country, 2) the employer or investor must have made or be actively in the process of making a qualifying investment in the U.S., 3) the sponsored employee must share the nationality of the treaty country, and 4) the position offered to the employee must be an executive (supervisory) role or for providing essential services.
Here’s an example of how the E-2 could be leveraged: a large Japanese electronics company that is expanding into the U.S. may need executive leadership and essential employees from headquarters to steward the newly opened U.S. entity (or entities) through important early-stage activities. As business needs evolve, the parent may then need to move specialized engineering staff into the U.S. to train local hires on the company’s products, manufacturing processes, research goals, or other critical business needs. The E-2 visa category would enable the corporate parent to leverage its talent quickly, adapting to these market needs in the U.S. in real time, without the delays or challenges of categories like the H-1B or L-1. Unlike the L-1, a more familiar alternative to H-1Bs, the E-2 does not require the employee to have been previously employed with the petitioning employer abroad. What makes this category challenging for many companies is the nationality criteria—in addition to proving the corporate entity’s qualifying nationality, employees must share the nationality of the employer to be eligible for E-2 visas. In our example, only Japanese nationals would be eligible as E-2 employees. The typical process for pursuing an E-2 is to file directly with a U.S. consulate, and although the process varies by location, generally a company files an initial registration and, once registered, enjoys an expedited process for subsequent employees.
In an increasingly challenging U.S. immigration climate, BAL encourages all employers to engage proactively with counsel to assess all options. While the oft-overlooked E-2 may not be a solution for all, it does provide a critical route for many employers.
The information contained here is meant to be informational, and while BAL has made every effort to ensure the accuracy of the information, it is not promised or guaranteed to be complete. Readers of this information should not act upon any information contained on this alert/blog without seeking professional counsel. This alert does not constitute legal advice or create an attorney-client relationship. Any reference to prior results, does not imply or guarantee similar future outcomes.