E-2 Israel FAQ

 

When does E-2 status become available to Israeli nationals?

 The US Consulate in Tel Aviv and USCIS in the United States will begin accepting Israeli E-2 visas on May 1, 2019.

 What are the general requirements for an E-2 visa?

 E-2 visas are available to nationals of approved countries who are coming to the United States to develop and direct the operations of an enterprise in which the applicant has invested, or is actively in the process of investing, a substantial amount of capital in a bona fide enterprise. Also, those who work in the enterprise as an executive, supervisor, or a person whose skills are essential to the efficient operation of the business. To qualify for the E-2 as an Israeli company, at least 50% of the shares of the company must be held Israelis. Israelis with dual nationality can count toward the 50% calculation as long as they hold themselves out as Israeli nationals for E visa purposes.

 What’s different than the E-1 visa Israelis have had available for 30+ years?

 E-1 visas are based on a company engaging in substantial trade between the US and Israel. The E-1 is generally less useful for start-ups who have may not be engaged in trade with Israel much less have a way to document a substantial volume of trade. For larger companies, demonstrating that the company is primarily trading with the US may be a problem if it is doing business in multiple countries.

 How does a petitioning company show they are Israeli for purposes of the E-2 application?

 A company must provide stock certificates, a share register, minutes of annual shareholder meetings or similar evidence to document the majority of shares in the business are held by Israeli nationals who are not permanent residents or dual citizens. If a company is the shareholder, then the nationality of that company must be documented by demonstrating the nationality of that company’s shareholders. If a company is publicly traded, the company must provide a translated copy of the Company Registrar from the Israeli Ministry of Justice, detailing the shareholders’ names and percentage of stock ownership, and a statement from a CPA stating the amount of stock that is traded on any stock exchange. All individuals of the Israeli company who seeking E-2 status must also be Israeli nationals.

 What does it mean to have an investment or to be “actively in the process of investing”?

 To be considered to be investing for E-2 purposes, the source of the investment may include capital assets or funds from savings, gifts, inheritance, contest winnings, loans collateralized by the investor’s own personal assets or other legitimate sources. The source of the funds may be from inside the US. Note that the inheritance of a business does not constitute an investment.

 The investment funds must be at risk and placed with the hope of generating a financial return. If the funds cannot be lost in total, they are not considered to be at risk and will not qualify. That also means the funds must be irrevocably committed. However, if a business is being purchased, it is permissible to condition the sale on the issuance of the E-2 visa. Similarly, other contracts (such as a lease or a purchase of equipment) can have a similar requirement. Many investors choose to demonstrate their irrevocable financial commitment by placing funds in an escrow account with instructions for the escrow agent to release the funds upon issuance of the visa.

 Does the business need to already be operating to file for the E-2 visa?

 The business must be “real and active” and must not merely be a paper organization. Often, investors will appropriately enter the US initially on a visitor visa with the stated purpose of setting up a new business with the intention of applying for an E-2. Once the business begins operations, then the investor will seek a change of status from B-1 to E-2 status with USCIS or leave the US and apply for an E-2 visa at the US Consulate.

 How much is enough to be considered to have made a “substantial investment”?

 There is no set dollar figure for an investment to be considered “substantial”. The US government instead says an investment is substantial if if is an amount that is

 1. Substantial in a proportional sense (comparing the amount invested versus the cost of the business with businesses that involve only a small percentage down payment being considered less likely to be substantial);

2. Sufficient to ensure the E-2 investor’s financial commitment to the successful operation of the business; and

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

 As a general rule, the business plan should demonstrate the expected cost to operate the business and the applicant should be prepared to demonstrate that the capital invested will be able to support the continued operation of the business for many months – perhaps a year – without having to depend on the business’ cash flow.

 Can I obtain an E-2 visa by buying a US business?

 Yes. And purchasing a business can often be looked upon favorably for E-2 purposes because the business already has revenue-generating history that can be demonstrated.

 How do I apply for an E-2 visa?

 If you are applying for E-2 status at the consulate, you must file your initial application by mail (many consulates accept online submissions and hopefully the US Consulate in Tel Aviv will soon allow this). The US Consulate has already published a lengthy list of documents to be submitted including a cover letter that is essentially a legal brief outlining how the E-2 rules will be met by the Israeli company, evidence the company meets the nationality requirements, documentation that the State Department’s online visa and E supplement applications have been submitted, evidence of the investment of substantial capital, a detailed business plan and a variety of other evidence the business is real and operating.

 Change of status applications filed in the US with USCIS will contain similar documentation except that USCIS’ I-129 and E supplement form are submitted with the documentation.

 For how long is an E-2 valid?

As of now, we don’t know how long E-2 visas will be valid. E-1 visas for Israelis are issued for up to five years so it is likely that this will also be the case for E-2s. E-2s can, however be renewed without any limit.

 Do I need to demonstrate I plan on leaving the US after my E-2 status is over?

 E-2s need not show they are coming to the US for a specific period of time, but they must show they intend to depart the US and not remain permanently. However, unlike other visa categories, an E-2 need not demonstrate they are maintaining a residence in Israel or elsewhere outside the US. Also, an E-2 may not be denied solely because the E-2 has applied for a green card (though if an applicant has filed for adjustment of status as part of green card processing, E-2 status may be denied).

 Can I apply to change status in the US to E-2 status if I’m currently in the US on another visa?

 Yes. USCIS has announced they will begin accepting E-2 change of status applications on May 1st. Be cautious, however. If you are approved for an E-2 change of status and leave the US, you will need to file a new E-2 application with the E treaty officer at the US consulate in Tel Aviv and the consulate can reverse USCIS’ decision.

 Can spouses and children accompany the E-2 beneficiary? Can they work?

 Spouses and unmarried children under the age of 21 can accompany an E-2 as a dependent and remain in the US for the same duration as the principle applicant. E-2 spouses are also entitled to apply for employment authorization after arriving in the US as an E-2 spouse or changing status to E-2 spouse within the US. An I-765 application must be filed and a wait of three to five months is normal to get the work card.

 What if I plan to eventually take on non-Israeli outside investors?

 One of the challenges for E-2 start-ups is they must maintain the nationality of the treaty country or the E-2 visa holders risk losing their E-2 status. If investors come in to the company that cause the percentage of Israeli ownership to be diluted below 50%, E-2 eligibility will be lost.

 Where can I find more about qualifying for E-2 status as an Israeli national?

 Siskind Susser has an information web page at www.e-2israel.com including our dual Hebrew/English artificial intelligence-based app that will help you evaluate your prospects for qualifying for E-2 status.