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E-2 Investor Visa Allowed for Israeli Nationals on May 1

Published: March 29th, 2019

By: Catherine Henin-Clark Chad I. Rubin

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The Israeli Office of Population and Immigration Authority just released that after 7 years of negotiations between the United States and Israel, Israeli nationals will be eligible to apply for the E-2 investor visa as of May 1, 2019.

Coming to the U.S. as a professional or businessperson has become increasingly difficult, lengthy and costly. Until now Israeli nationals desiring to come to the U.S. to establish a business could only obtain either an E-1 visa requiring to show that a substantial trade between the U.S. and Israel had been created, apply for an L-1 intracompany transferee reserved to large multinationals transferring their managers to US subsidiaries or affiliates –L-1s are notorious with their high denial rate – or apply for the EB-5 immigrant investor program to obtain their green cards through large investments ($500,000 in rural and high unemployment areas or $1Million in others and creation of ten jobs) which entails 2 ½ years processing time.

The E-2 visa is based on a treaty between the U.S. and the eligible countries: Israeli nationals investing in a business in the U.S. can obtain the E-2 visa and Americans investing in Israel as well.

Requirements for E-2 visas include:

  • Nationality: the U.S. enterprise must be majority owned by an Israeli national;
  • Substantial investment in a commercial enterprise: a passive investment does not qualify. The Israeli investor will have to either purchase an existing business or start-up a new business. There is no minimum amount of capital required like the EB-5. However and because another requirement is to show that the business is not a “marginal” enterprise (see below), generally successful investments for start-up represent an investment of at least $100,000-$150,000 and for existing enterprises at least $200,000-$300,000. An experienced attorney will assist in determining whether an investment qualifies;
  • The capital must be at risk and any loan secured by the business assets is not qualifying E-2 capital. However, the U.S. embassy applies a proportionality test meaning that for larger amounts of investment the investor can contemplate financing; Also the value of inventory and/or equipment brought to the U.S. for the business is also qualifying capital;
  • The business must be a non-marginal enterprise meaning that it must generate more than just a living income for the investor and his/her family. For example, a Central Florida business generating an income of over $60,000 in salary, dividends and/or profits to the investor would qualify. Start-ups provide a business plan which would show profitability within 5 years; and
  • The investor must control and manage the enterprise and the day-to-day operations of the U.S. enterprise must be performed by employees. However, there is no requirement for the creation of a minimum number of employees.

The advantages of the E-2 visa:

  • The visa will be applied for at the U.S. embassy in Tel Aviv; trained E-2 visa staff handle the E-2 visa applications and the U.S. embassy provides guidance as to how to organize the supportive documentation;
  • The U.S. embassy of Tel Aviv currently quotes 2 to 3 weeks to review an E-2 visa application noting that it is already handling E-2 visas for Israeli nationals who have dual nationality including one which is E-2 qualifying. Once the embassy has had a chance to review the supportive documentation, it will ask the investor to set up an appointment. On May 1, 2019, Israeli nationals will be eligible to apply for the E-2 visa;
  • The E-2 should be granted for a five-year period and be renewable without any cap limit in the number of renewals which is generally not the case for other visa classifications;
  • The spouse of the E-2 investor is eligible to apply for work authorization in the U.S.; and
  • Children under 21 can obtain an E-2 visa as dependents and can study in the U.S. but are not allowed to work; in some states like Florida they can benefit from the status of student residents for tuition fee purposes meaning the costs of their studies can be two to three times cheaper than as an F-1 foreign student.

Disadvantages of the E-2 visa:

• The applicant cannot apply for the E-2 visa unless he/she has committed the capital to the investment; however, with proper guidance from the immigration attorney there is no reason the E-2 visa should not be approved;
• The E-2 visa does not “convert” to permanent residence in the U.S. (i.e., green card). However, should the investor consider the EB-5 he/she can apply for permanent residence as immigrant investor? Considering the EB-5 process takes more than 2 years to complete, the E-2 visa would permit the investor and family to come to the U.S. while the EB-5 process is pending; and
• Children over 21 cannot benefit from the visa and the ones under 21 are not allowed to work in the U.S.

This is very exciting news for prospective Israeli nationals desiring to invest in the U.S. or who have already invested in the U.S.

For over 30 years, the Dean Mead immigration team has handled hundreds of E-2 applications with U.S. embassies across the globe with a nearly 100% success rate. Our service consists of not only preparing the E-2 visa packages but more importantly guiding prospective investors with ensuring their investment should be qualifying.

The above is only a portion of all that is involved in the E-2 visa. Each case requires its own evaluation.

To find out more about the new rules or other investor visas, contact Dean Mead attorneys Catherine Henin-Clark or Chad Rubin.