By Alon Harnoy, Esq. and Adam Valko, Esq.
In 2012, President Obama signed a treaty which would ultimately set the stage for the extension of the E-2 visa to Israeli citizens. However, this process was delayed until the launch of a reciprocal treaty offered to U.S. citizens in Israel. While this ultimately took nearly seven years, in June 2018 Israel approved the issuance of the B-5 investor visa to U.S. entrepreneurs for investment in Israel.
As a result, on May 1, 2019, Israeli citizens were able to apply for E-2 visa status in the United States, joining approximately ninety (90) other countries that are afforded similar status. A commemoration ceremony was held on May 6, 2019 to memorialize this historic moment.
By way of brief overview, the E-2 visa allows for citizens of treaty countries to be admitted into the U.S. when investing a “substantial amount of capital” into a U.S.–based business (such amount is not explicitly defined, but is instead based on factors including, but not limited to, the in individual investor’s commitment to the enterprise based upon the total investment). The determination of “substantial” may also vary based upon the type of business, location, and costs to operate the business. However, note that an investment of as little as $50,000 has found success in certain circumstances, but is “considered low by any standard [and the] risk of denial is higher” with such an amount.
This capital must be subject to partial or total loss if the investment fails. In addition, the applicant must be “seeking to enter the United States solely to develop and direct the investment enterprise . . . [with] at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.”
For the investment to qualify, the investment may not be “marginal.” In short, the investment must have the “present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family.” While some enterprises may be in the startup phase, and thus unlikely to generate the requisite income, they should have the capacity to do so within five (5) years.
Visa recipients are awarded a maximum two (2) year initial stay, which may be extended indefinitely for periods of up to two (2) additional years. Recipients may be accompanied by spouses, and unmarried children under 21 years of age upon approval of their status as “dependents.” The recipient must only work in the activity for which they were approved at the time the E-2 was issued.
Pursuant to the treaty, Israeli citizens will be able to apply for an E2 visa at the U.S. Embassy Branch Office Tel Aviv. To apply for this visa, applicants are required to submit a binder, subdivided into specific sections, as set forth at https://il.usembassy.gov/visas/visas-for-treaty-traders/_Required/.
This is, without question, an incredibly positive development in the entrepreneurial relationship between the United States and Israel. “As someone who has followed for years the process of legislating for work visas in general and the E-2 visa in particular, there is no doubt that this is the right solution for the hi-tech sector and Israeli entrepreneurs,” said Advocate Tsvi Kan-Tor, Chair of the Israel-America Chamber of Commerce’s Visas Committee. Given the proclivity of technology companies and entrepreneurs in Israel, this provides Israeli entrepreneurs the opportunity to live and work in the United States through establishing a US-based business which meets the E-2 criteria.
We here at Shiboleth LLP frequently assist clients in setting up the corporate and investment structures necessary to establish a business in order to comply with the E-2 Visa requirements. Individuals who need counsel in setting up such structures in the United States can contact Shiboleth for assistance.
 See https://legalservicesincorporated.com/how-large-does-an-investment-have-to-be-for-an-e-2-visa/