E-2 Visa- AN IMMIGRATION PATHWAY TO THE UNITED STATES FOR TURKISH NATIONALS

Written by Taher Kameli

The  E-2  visa  provides  an   immigration   pathway   for foreigners   who  seek   to   come to the United States. In general terms, an E-2 visa is for (a) a citizen of a country with which  the  United  States  maintains  “a  treaty   of commerce   and   navigation”,   (b)   who  will “develop and direct” a United States “enterprise” in which he or she invests “a substantial amount of capital”. The E-2 visa has been popular with Turkish nationals in recent years. In 2014, 422 Turkish nationals were issued an E-2 visa  in the United  States.  In 2017,  629  Turkish nationals were issued an E-2 visa in the United States – a 49 percent increase over 3 years. This paper examines how other Turkish nationals can follow this immigration trend and obtain an E-2 visa to come to the United States. Long Standing Economic Relationship of the United States and Turkey The United States and Turkey have a longstanding economic relationship.  The  United  States  and  Turkey signed  an  Economic  and  Technical  Cooperation Agreement in 1947. Overall United States-Turkey trade significantly increased  from $10.8 billion in 2009 to $20.5 billion in 2018. In 2017, Turkey was the United States’ 28th largest goods export market and  its  34th  largest supplier of goods imported.  The top  categories of United States  exports  to  Turkey  in  2017  include   aircraft, agricultural   products (including tree nuts, distillers grains, and soybeans), iron and steel, mineral fuels, machinery, and cotton. The top categories of United States imports from Turkey in  2017  include  vehicles,  iron  and  steel, machinery,  agricultural  products  (including   processed   fruit and vegetables, tobacco, and snack foods), carpets and  other  textile  coverings,   and   stone,  plaster,  and cement.  In  addition,  Turkey  had  $2  billion  of   foreign direct   investment in the United States in 2017, up 18.1 percent from 2016.

Given   these   extensive   economic   ties   between   the United   States   and   Turkey,   it  is  not  surprising  that  E-2 visas have been available to qualifying Turkish nationals since May 18, 1990.

 

 Key Specific Requirements of E-2 Visas

 

Besides the requirement of being a citizen of Turkey, among the key specific requirements of E-2 visas for Turkish nationals are the following:

  • The Turkish  national  must  come  to  the  United States  “solely  to  develop  and  direct  the operations   of   an   enterprise   in   which   he   has invested,   or of  an  enterprise  in  which  he  is actively in the process of investing”.   For   these purposes, “solely to develop and direct” means that the Turkish national 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

 

  • The “investment” for an E-2 visa is the Turkish national placing of capital, including funds and other assets (which have not been obtained, directly or indirectly, through criminal activity), at risk  in  the  commercial   sense   with  the objective of generating a profit.

 

  • The Turkish national    must    be    in    possession    of   and   have control  over the  capital  invested  or   being invested.  The capital must be subject to partial   or total loss if investment fortunes reverse. Only indebtedness collateralized by the     Turkish  national’s  own  personal  assets,  such  as  a second mortgage on a home  or  unsecured  loans,  such  as  a  loan  on  the   Turkish   national’s personal signature, may  be  included  as  “investment”, since the Turkish  national risks the funds in the event of business failure. Indebtedness such as mortgage debt or commercial loans secured by the assets of the enterprise cannot be included as “investment”, as there is no requisite element of risk.

 

  • Capital in the process of being invested or that has been invested must be irrevocably committed to   the   The   Turkish national   may    use any  legal  mechanism available,   such   as   the   placement   of   invested funds in escrow pending E-2 visa issuance, that would not only irrevocably commit funds to the enterprise, but that might also extend personal liability protection to the Turkish national if the E-2 visa application is denied.

 

  • The investment  must  be  in  a  bona   fide enterprise in the United States,   which must be a real, active, and operating commercial or entrepreneurial undertaking which produces services or goods for profit.

 

  • The investment  cannot  be  in  a  marginal enterprise, which 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   Turkish   national   and    his   or her family.  An   enterprise   that   does   not   have   the capacity to generate   such income, but that has a present or future 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 Turkish   national   commences   the   normal business   activity of the enterprise.

 

  • The investment  must  be  of  “a  substantial amount  of  capital”,   which   cannot  be   of   a relatively   small   amount   of      For   these purposes,  “a  substantial  amount  of   capital” constitutes an amount which is (i)   substantial in the proportional sense, i.e., in relationship to the total  cost  of  either  purchasing  an  established enterprise  or  creating  the  type   of   enterprise under consideration, (ii) sufficient to ensure the Turkish national’s financial  commitment   to   the successful operation of the enterprise; and (iii) of a magnitude to support the likelihood that  the  Turkish  national  will  successfully  develop  and direct  the  enterprise.  Whether   an   amount of   capital is substantial in the proportionality sense is   understood   in   terms    of  an  inverted  sliding  scale,  i.e.,   the   lower   the   total   cost   of   the   enterprise, the higher, proportionately,  the investment  must  be  to  be considered a substantial amount of capital.  For  example, investments constituting 100 percent of the total cost would normally be considered substantial for  a  business  requiring  a   startup   cost   of $100,000.  At the   other extreme, an investment of $10 million in a $100 million business may be considered  substantial,  based  on   the   sheer magnitude of the investment   itself. The term, “substantial”, is not defined by reference to any specific minimum amount of capital investment. Rather,   it   is   defined    by   reference to the “enterprise” (business) in which the investment will be made by the  Turkish   national.    For example,   while   a   consulting   business   may require a  relatively  small   investment,   a manufacturing   business   likely   will   require a much larger investment.

 

  • The Turkish national must intend to depart the United States upon the expiration or termination of E-2 visa status. This point means that the E-2 visa is a “nonimmigrant visa” and does not grant a permanent right to stay in the United Qualified treaty investors and employees will be allowed a maximum initial stay of two years. Requests for extension of stay in, or changes of status to, E-2 classification may be granted in increments of up to two years each. There is no limit to the number of extensions an E-2 nonimmigrant may be granted. An E-2 nonimmigrant who travels abroad may generally be granted, if determined admissible by a U.S. Customs and Border Patrol Officer, an automatic two-year period of readmission when returning to the United States.
How to File for E-2 Classification – In the Case of Treaty investor is

 

Currently in the United State in a Lawful Nonimmigrant Status

 

If the treaty investor is currently in the United States in a lawful nonimmigrant status, they may file Form I-129 to request a change of status to E-2 classification. If the desired employee is currently in the United States in a lawful nonimmigrant status, the qualifying employer may file Form I-129 to request a change of status to E-2 classification on the employee’s behalf. The basic filing fee for all I-129 petitions is $460. This fee must be paid each time that the petition is filed including for extensions and amendments.

 

 How to File for E-2 Classification – In the Case of Treaty investor is

 

Outside the United States

 

A request for E-2 classification may not be made on Form I-129 if a treaty investor is physically outside the United States. Interested parties should refer to the U.S. Department of State website for further information about applying for an E-2 nonimmigrant visa abroad. If E-2 visa is approved and issued to the treaty investor, the person may seek admission at a United States port of entry as an E-2 nonimmigrant.

 

 Family of E-2 Treaty Investors and Employees

 

Treaty investors and employees may be accompanied or followed by spouses and unmarried children who are under 21 years of age. Their nationalities need not be the same as the treaty investor or employee. These family members may seek E-2 nonimmigrant classification as dependents. If family members’ E-2 nonimmigrant classification is approved, generally they will be granted the same period of stay as the employee. If the family members are already in the United States and are seeking change of status to or extension of stay in an E-2 dependent classification, they may apply by filing a single Form I-539 with $370. Spouses of E-2 workers may apply for work authorization by filing a form I-765 with the $410.

 

Businesses Invested in by Turkish Nationals to Obtain E-2 Visas

 

Among the businesses in which Turkish nationals have invested in recent years to obtain E-2 visas are the following: Various franchises, including gelato, fitness, and coffee franchises; Various restaurants; Freight forwarding company; Corporate consulting and research firm; Auto refinishing and detailing services; Logistics company; and High-end tile design company. Any

 

of the above-described  categories  of  significant imports by the United States from Turkey  (such as, for example, carpets and other textile coverings, and stone, plaster, and cement) would appear to be excellent areas for Turkish nationals to invest in a United States business and obtainE-2 visas.

 

Advantages of the E-2 Visa Over the EB-5 Visa

 

Another  popular  United  States  immigration  visa based on investment is the EB-5   visa. However, the E-2 visa has various advantages over the EB-5 visa for the Turkish national. First,  while  the  EB-5  visa  requires  a foreign  investment  of  $500,000   or   $1,000,000  under current law (and these amounts are likely to increase in the future), the “substantial amount  of  capital” requirement  for  the  E-2  visa  will  generally  result   in   a smaller   amount of investment.  Second, while the EB-5 visa   requires   the  creation   of  10   jobs,   there is  no  such specific “job creation” condition for the E-2 visa.  Third, the processing time for the E-2 visa is generally a few months – much shorter  than  the  multiple  years  of processing  time  for  the  EB-5  visa.  Fourth,  most   EB-5 investments are structured as   passive investments, with the  EB-5  investor  generally  having  no  control  over  the  investment funds or the business in which the investment is made. On the other hand, the E-2 investor generally has control over the investment funds and the business in which the investment is made.  Fifth, because the EB-5 visa is a “permanent residency in the United States” visa (qualifies the EB-5 investor to receive a “green card”), the  EB-5  investor  is  taxable  in  the  United  States  on worldwide income.   In comparison, because the E-2 visa is not a “permanent residency in the United States” visa (although,  as  described  above,  it   can  be renewed indefinitely), the E-2 investor is not necessarily taxable in the United States on worldwide income (although may be if the E-2 investor resides a significant portion of the year in the United States). Sixth, the legal fees are generally less for the E-2 visa than for the EB-5 visa.

 

Based on its strong economy, political freedoms, and cultural diversity, the  United  States  is  an   attractive destination   for   many   foreigners. Turkish  nationals desiring  to   come to the United States should definitely consider  the  E-2  visa.  The  Law  Offices  of Kameli  and Associates   has   extensive   experience   in   helping immigrants obtain E-2 visas. If any Turkish  nationals has questions about, or desires to obtain, an E-2 visa, please contact  the Law Offices of Kameli and Associates, at taher@kameli.com or 312-233-1000.