Would You Like to be a Treaty Trader or Treaty Investor?

Introduction

The United States has entered into treaties or agreements with a number of countries throughout the world which allow citizens of those countries to open businesses in the United States. These persons can remain in the United States as long as their businesses are in existence. Sometimes such persons can remain in the United States for 15-20 years or more. If after reading this you feel you are qualified for treaty trader or treaty investor status, you should contact our office who specializes in Immigration Law or the closest U.S. Citizenship & Immigration Services (USCIS) office, U.S. Embassy or U.S. Consulate.

The countries with which the United States currently has treaties or agreements are:

*Treaty Trader only **Treaty Investor only


Albania**
Argentina
Armenia**
Australia
Austria
Azerbaijan**
Bangladesh**
Belarus**(Pending)
Belgium
Bolivia
Bosnia-Herzegovina
Brunei*
Bulgaria**
Cameroon**
Canada
Chile
Colombia
Congo**
Costa Rica
Croatia
Czech Republic**
Denmark*
Ecuador**
Egypt**
Estonia
Ethiopia
Finland
France
Georgia**
Germany
Greece*
Grenada**
Haiti (Pending)
Honduras
Iran
Ireland
Israel*
Italy
Jamaica**
Japan
Jordan
Kazakhstan**
Korea, South
Kyrgyzstan**
Latvia
Liberia
Luxembourg
Macedonia
Mexico
Moldova**
Mongolia**
Morocco**
Netherlands
Nicaragua**(Pending)
Norway
Oman
Pakistan
Panama**
Paraguay
Philippines
Poland
Romania**
Russia (Pending)
Senegal**
Singapore
Slovakia**
Slovenia
Spain
Sri Lanka**
Suriname
Sweden
Switzerland
Taiwan (China)
Thailand
Togo
Trinidad & Tobago**
Tunisia**
Turkey
Ukraine**
United Kingdom
Uruguay (Pending)
Uzbekistan (Pending)

E-1 Treaty Trader

A person is considered to be a "treaty trader" if s/he is coming to the United States to carry on substantial trade, principally between the United States and the foreign country of which s/he is a citizen. Most individuals who apply for treaty trader status are usually involved in some area of import/export. However, international airlines, international banks, travel agencies and other businesses may also qualify for treaty trader status.

The law requires that the trade be substantial. The law is more concerned with the number of transactions than the actual dollar figures. Therefore, numerous transactions may be sufficient to meet the substantial requirement, even though each transaction may be small in value. However, the general rule is that enough profit must be generated by the trade to adequately support the treaty trader and his/her family while in the United States.
In order to qualify for treaty trader status, over 50% of the volume of international trade must be conducted between the United States and the country of the person's nationality.
Documentation is extremely important to successfully obtain treaty trader status. Bills of lading and other traditional business documents will need to be presented to the USCIS (if a person is applying for E-1 status while in the United States) or to the American Consulate (if the person is applying abroad). In addition, other documents demonstrating an ongoing business such as incorporation papers, office leases or rental agreements, business licenses, etc. must be presented.

E-2 Treaty Investor

A treaty investor is a person coming to the United States for the sole purpose of developing and directing the operation of a business in which s/he has invested, or is actually in the process of investing, a substantial amount of capital. When a business is in the process of formation, it must be shown that the funds have been irrevocably committed to the business. Uncommitted funds in a bank account do not represent an investment.

The business into which the investment is being made must be a real, operating business, producing some service or commodity for a profit. Mere investment in a house or land does not qualify. However, a real estate development business or farming operation would qualify.

In order to ensure that the investor is in a position to "develop and direct" the business, the investor must control the business by owning at least 50% of the business or otherwise possessing operational control. Therefore, if the business will be owned with others as a partnership or corporation, the investor must be sure to have at least a 50% ownership share.

Although the U.S. government has not established a minimum dollar value to meet the requirement of substantial investment requirement, the investor must look at the needs of the business and determine the proportional investment amount required to make the company viable. Although investments of less than $50,000 have been approved, generally, investments of less than $100,000 will not be considered substantial and, often, even larger amounts will be required to start a viable business.

The U.S. government has determined that, if an investment is marginal, an investor will not be eligible for treaty investor status. An investment will be considered marginal if it will produce only enough income to provide a living for the investor and his/her family. The investment will be considered more than marginal if it can be shown that the investment expands job opportunities locally, that the investor has substantial income from other sources, or that the investment will produce a profit of much more than the investor needs in order to make a living. Generally, at least one employee must be hired and, in many cases, more will need to be hired so that the investment will not be viewed as marginal.

Employees of E-1 and E-2 Businesses

Under certain circumstances, persons may obtain E-1 or E-2 visas by working for treaty trader or treaty investor companies. To qualify, they must be employed as executives, managers, or supervisors, or they must have special qualifications, which make their services essential to the efficient operation of the enterprise. Whether a person has special qualifications that are essential to the business operation depends on such factors as proven expertise, uniqueness of the specific skills, length of experience with the company, the period of training, and the salary.

In order to qualify as an employer, the employer must be:

  • a citizen of a treaty country and be maintaining the status as treaty alien (E-1 or E-2) if in the United States; or
  • a partnership or corporation that is more than 50% owned by persons having the citizenship of a treaty country who are maintaining treaty status (E-1 or E-2) if residing in the United States.

In addition, the employee must have the same nationality as the owners of the treaty company.

Under some circumstances, a person may not qualify as an employee of a treaty company, but may be eligible to work for the company under another visa category. (For more information, see "Would You Like to Work in the United States?" by Edward R. Litwin.)

Procedures

A person may apply for E-1/E-2 status either a) in the United States, presenting all of the necessary forms, information and documentation to the C.I.S., or b) abroad, presenting all the necessary forms, information and documentation to the nearest American Consulate. Frequently, investors and traders apply for E status while in the United States. They have found that, in cases where additional documentation may be requested to prove the required factors, they can obtain such documentation easier while they are in the United States. Trying to obtain such documentation from the United States while abroad may be more difficult and it, therefore, may slow down or otherwise hinder the visa application process if filed directly with an American Consulate or Embassy abroad. However, persons who have initially obtained E status in the United States must present the same documentation to an American Embassy or Consulate the first time they travel outside the United States to have a visa issued, otherwise, they will not be able to return. A person may remain in the United States as long as the trader or investor-company continues to be in operation. However, if the business is sold or closed, there is no further basis for remaining in the United States and the treaty trader or treaty investor must leave, unless the proceeds of a sale are reinvested into a new business.

While in the United States, the spouse and children of the treaty trader or treaty investor are also authorized to remain in the United States with him/her. The spouse may work and the spouse and children may attend school. In the case of children, however, once a child turns 21 years of age, the child is no longer considered a dependent of the treaty trader or investor, and will be required to find his or her own way to remain independently in the United States (for example, in F-1 student status) or be required to leave the United States.

This document answers most of the frequently asked questions about treaty investments. If after reading this you have questions about Treaty Trader or Treaty Investor status or any other immigration matters you may call Litwin & Smith and arrange an appointment with him or one of his associates at either South San Francisco, San Francisco, or Santa Clara office. There is an initial consultation fee for the first half- hour consultation. The information in this article does not constitute legal advice. The law is constantly changing, and we make no warranty of the accuracy of information