LawFlash

E-2 Treaty Investor Visa Eligibility for Israel Expected May 1

April 01, 2019

Israeli entrepreneurs will be able to get E-2 investor visas to launch startups in high-tech and other industries in the United States, and to work in the country to develop those businesses. Reciprocal rules will allow US investors to start new businesses in Israel using B-5 visas.

The Israeli government recently approved rules that will provide for reciprocal investor visas for entrepreneurs from Israel and the United States to start new businesses. The new program will likely take effect May 1, 2019, though details are not yet available. The United States approved E-2 treaty investor status for Israeli investors during the administration of President Barack Obama. The recent action by the Israeli government should clear the way for a program allowing Israeli citizens or Israeli-owned businesses to obtain E-2 work visas based on a substantial job-creating investment in the United States.

The E-2 visa is likely to become the principal work-authorized visa for Israeli investors, entrepreneurs, and existing businesses that seek to invest in and grow businesses in the United States. The United States currently has E-2 treaty investor programs in place with approximately 80 countries. Many companies in the technology, life sciences, engineering, commercial and manufactured goods, and retail industries use the E-2 visa as an important tool in their cross-border mobility strategies.  

Background

The E-2 visa will allow Israeli citizens to work in the United States to develop and direct the operations of an enterprise in which the individual (or an Israeli-owned business) has invested a substantial amount of capital, or to provide an essential skill to the new US business. The visa is typically issued for an initial period of five years, and the qualified investor or investor’s employee is admitted for an initial period of two years, with unlimited extensions for as long as the person’s activities continue to center on the investor company. US investors are eligible on reciprocal terms for the Israeli B-5 visa.

The E-2 visa has a number of beneficial characteristics:

  • No specific degree or background is required.
  • Once a company registers as an investor entity, subsequent E-2 visas are issued relatively swiftly and predictably to qualified applicants.
  • There is no US residence requirement, and the E-2 may be used intermittently.
  • Unlike the H-1B visa, the E-2 is readily available to owners, shareholders, and partners.
  • Dependents are eligible for visas in the same classification.

The specific criteria for E-2 visa eligibility are the following:

  • The investor—either a person, partnership, or corporate entity—must have the nationality of a treaty country.
  • If a business, at least 50% of the business must be owned by persons with the treaty country’s nationality.
  • The investment must be substantial, with investment funds or assets committed and irrevocable. It must be sufficient to ensure the successful operation of the enterprise.
  • The investment must be a real operating enterprise, an active commercial or entrepreneurial undertaking. A “paper” organization, speculative or idle investment does not qualify. Uncommitted funds in a bank account or similar security are not considered an investment.
  • The investment must generate significantly more income than just to provide a living to the investor and the investor’s family, or it must have a significant economic impact in the United States.
  • The investor must have control of the funds, and the investment must be at risk in the commercial sense. Loans secured with the assets of the investment enterprise are not allowed.
  • The visa applicant must be coming to the United States to develop and direct the enterprise. If not the principal investor, the applicant must be considered an essential employee, employed in a supervisory, executive, or highly specialized skill capacity. Ordinary skilled and unskilled workers do not qualify.

What Comes Next

The US Embassy in Jerusalem is in the process of preparing instructions on how to apply for the E-2 visa. We expect that applications will be submitted at the US consulate in Tel Aviv where E-2 applications are currently processed for Israeli dual-citizens who are citizens of another E-2 treaty country. The instructions are likely to be posted on the E-2 page of the US Embassy’s website.

We are closely watching developments in this area and will provide updates as needed.

How We Can Help

Morgan Lewis’s global mobility and immigration lawyers are available to provide guidance to individuals and companies interested in exploring the new E-2 treaty investor program for Israel. Moreover, in close collaboration with our firm’s US-Israel practice—comprising lawyers with specialized knowledge in cross-border startups in the high-tech, life sciences, cybersecurity, and other industries—we can provide comprehensive one-stop counseling for Israeli investors and businesses seeking to invest and expand in the United States.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:

Washington, DC
Eric Bord
Shannon A. Donnelly
Eleanor Pelta

San Francisco
A. James Vázquez-Azpiri