E-1 or E-2: is your trade already flowing, or are you about to invest?

E-1 and E-2 are twins: the same treaty, the same duration, the same rights for your family. A single question separates them. Are you already trading with America, or are you investing there? Answer that, and you know which documents to gather.

1The difference in one sentence

With the E-1, you show that money is already flowing between America and your home country. With the E-2, you show that your money is working in America. Everything else follows from that: which documents you gather, when you can apply and which kind of company qualifies at all.

Both visas belong to class E, and both rest on a treaty of commerce and navigation between the US and your country of citizenship. Germany, Austria and Switzerland have treaties for both visas: Germany since July 14, 1956, Austria since May 27, 1931 and Switzerland since November 8, 1855. If you hold one of these passports, both routes are generally open to you.

The table shows the differences and similarities at a glance. After that, we walk through what the authorities examine, point by point.

2What the two have in common

A surprising amount is the same. The company you are coming for must be at least 50 percent owned by nationals of your treaty country. The authorities trace ownership through every layer of a corporate chain, right up to the people who ultimately own it. The country where a company was incorporated plays no role in determining its nationality. Shares held by green card holders do not count.

The duration is the same. Each time you enter, you are admitted for up to two years, and extensions of up to two years each are possible with no limit on the number. If you leave and come back, a new two-year admission usually begins. For both visas, you must still intend to leave the US when your status ends. You don't need to keep a home in Europe for this; a clear intent to depart is usually enough.

Your family is treated the same way, too. Your spouse and unmarried children under 21 come with you, and they don't need to share your citizenship. Your spouse is authorized to work in their status. And for both visas: an office of your own is not a requirement, although it can matter when the authorities check whether your business is real.

3What the E-1 requires: trade that is already flowing

For the E-1, trade means an existing, traceable international exchange for payment, in which ownership of the goods or services passes from one side to the other. Trade covers goods, but also services, international banking, insurance, transportation, communications, data processing, advertising, accounting, design and engineering, management consulting, tourism and technology transfer. A service counts when it is what your company sells to its customers.

Three conditions turn trade into E-1 trade:

• It is already under way. If you are still looking for trading partners, you won't get an E-1. Binding contracts that call for immediate exchange do count, though.
• It is substantial. That means a continuous flow of many transactions over time. There is no minimum value per transaction, and a single large deal is never enough. The consul looks first at the number of transactions, then at their value. For smaller businesses, it works in your favor if the income from those many transactions supports you and your family.
• It is mainly with your home country. More than 50 percent of your international trade must be between the US and the treaty country. The rest may be with other countries. Purely domestic business within the US does not count as trade for the E-1.

Trade is measured at the level of the legal entity. A branch is measured together with the whole company, while a separate US subsidiary is measured on its own. That can decide whether the 50 percent rule is met. The details, with a worked example, are in E-1 requirements.

4What the E-2 requires: capital at risk

For the E-2, you invest in a real, operating business that produces goods or services for profit. Undeveloped land or shares you simply hold do not count. The capital must be at commercial risk: if the business fails, you could lose some or all of it. Loans secured by the company's assets therefore don't count; a loan against your own collateral does.

The investment must be substantial. The law sets no minimum amount. It is measured against the total cost of buying an existing business or building a new one: the less expensive the business, the higher the share you must put in yourself. And the business must not be marginal. Now or within five years, it must generate more than a modest living for you and your family.

Unlike the E-1, you don't have to wait until the business is up and running. Being actively in the process of investing is enough. But that means more than money in an account: the funds must be irrevocably committed, and you must be close to launching the business. A purchase that only takes effect if the visa is granted can be enough, provided the money is held in escrow. The E-2 needs no international link: your company may sell exclusively within the US. More on what the company must meet is in Requirements for the US company.

5Three companies, three answers

Typical situations show how the rules play out. The following examples are illustrative and are no substitute for a review of your own case.

5.1A manufacturer's sales subsidiary

A European machinery manufacturer sets up a US subsidiary that imports its machines and spare parts and sells them to American customers. If more than half of the subsidiary's international purchases come from the manufacturer's home country, and many shipments run throughout the year, that is a classic E-1 case. If the managing director has already worked at the parent company for a year, the L-1 is open to them as well.

5.2A new business without trade

A European founder buys an existing service business in Texas with local customers. There is no trade with her home country, so the E-1 is ruled out. Her route is the E-2: purchase price, takeover of the equipment, working capital, all at risk and documented.

5.3The company that does both

Take a Swiss software company that has sold licenses and consulting to US clients for years and is now investing in its own US office. Both routes may be open here. What usually tips the balance is which one is easier to prove: a long track record of invoices to the USA, or a clearly documented investment.

6Employees: who can join you on the E-1 or E-2

Both visas cover not only the owner but also employees, under the same rules. The employee must have the same nationality as the company they work for. They must either hold an executive or supervisory role, with ultimate responsibility for the company or a substantial part of it, or have special qualifications that are essential to the business.

The authorities judge what counts as essential by the proven expertise, whether others have these skills, the salary they command, and whether they can be found in the USA. Language skills and cultural knowledge alone are not enough. And a skill that is rare today may become commonplace later.

An employee may only work in the role they were approved for. They may, however, also work for the parent company or a subsidiary, as long as the link between the companies is established, the work there is equally executive or essential, and nothing else about the terms changes. What this looks like in practice for a team is covered in E-2 for employees.

7Application, forms and fees

If you are outside the USA, you apply for either visa at the consulate, with no prior petition to USCIS. The principal applicant completes Forms DS-160 and DS-156-E. The consular fee for both visas is $315 per person.

If you are already in the USA in another valid status, you can change to E status with USCIS using Form I-129. The fee is $1,015 on paper or $965 online, $510 for small employers, plus the Asylum Program Fee. If your company changes fundamentally, for example through a merger, an acquisition or the sale of the division you work in, USCIS must approve the change with a new I-129.

Because both visas are decided at the consulate, it is ultimately a consular officer who judges whether your documents hold up. Many of the standards leave room for discretion. The burden of proof is on you.

8Evidence: bills of lading or bank statements

The difference is clearest in the file you submit. For the E-1, you document trade: purchase orders, bills of lading, customs and warehouse papers, contracts, letters of credit, accounts receivable and payable. They must show how many transactions take place and in which direction.

For the E-2, you document money: where it came from, that it is yours and that it is committed to the business. Savings, inheritances, gifts and loans secured by your own assets all count as sources. The money does not have to come from outside the USA, but it must not come from unlawful activity. By the way, an inherited business is not an investment in itself. How to document the source properly is explained in Source of funds for the E-2.

9What about the L-1?

The E-1 and E-2 are not the only routes for European entrepreneurs. If there is a company abroad where you have worked for at least a year as an executive, manager or specialist, and an affiliated company in the USA, the L-1 may be an option, even for a new US office. It requires neither trade nor an investment threshold, just your employment with the company and its link to the US entity.

The comparison of the two most common routes is in L-1 vs. E-2: the key differences. All nine routes side by side are in Which US visa is right for you?

10The green card afterwards

Neither the E-1 nor the E-2 leads to a green card on its own. Both require the intention to leave the USA when your status ends. The regulations do protect you, though: an application for admission, change of status or extension in E status may not be denied solely because a labor certification was approved or a green card petition was filed.

The path to a green card therefore runs through a second application: based on your qualifications, such as the EB-2 NIW, on an investment with the EB-5, or on a group of companies with the EB-1C. Which route makes sense and in what order is described in From E-2 to green card; the same principle applies to the E-1.

In short

• The E-1 and E-2 rest on the same treaties; Norway, Sweden, Denmark, Finland, the UK, Ireland and the Netherlands have both.
• The E-1 requires ongoing, substantial trade, more than 50 percent of it between the USA and your home country.
• The E-2 requires a substantial investment in a real, non-marginal US business that you run; there is no statutory minimum amount.
• Duration, renewal, family and the consular fee are the same for both.
• If you have a company abroad that can transfer you, look at the L-1 before either.

How we help you

• Visa RoadmapIn writing: which visa fits you and your family, prepared with the immigration attorney on the firm's team.
• Visa Roadmap for Company FormationFormation and visa in one plan, so the company carries the visa.
• Visa and Green Card ConsultationWhich route to the USA fits you, settled in one conversation.
• Form a CorporationThe US corporation (Inc) for growth, investors and your visa.
• US market entrySubsidiary, staff, taxes: your start in the US market.