February 21, 2012 | 12:57 pm

New Bill Seeks to Expand E-2 Investor Visa for Citizens of Israel

Posted by Cedric M. Shen

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Recently, U.S. Rep. Howard L. Berman, Ranking Member on the House Foreign Affairs Committee, introduced the bill H.R. 3992 allowing Israeli nationals to apply for an E-2 investor visa to the United States.  According to Rep. Berman, this legislation seeks to “encourage Israeli business leaders to invest in the United States and lead to the creation of jobs for American workers.  Israel is one of our closest allies in the world and a significant investor in the U.S. economy.  The E-2 investor visa program will strengthen the vital U.S.-Israel relationship, boost the American middle class, and help grow the economies of both countries.”

The E-2 visa allows foreign nationals of a country that has a treaty with the United States, to make an investment in a business enterprise. Generally, the investment must be substantial, at risk, and the investor must oversee and direct the day-to-day operations. The visa is valid for three years, and is renewal indefinitely so long as the business continues to operate.

What is a ‘substantial investment’?

Unlike the EB-5 green card, which expressly states a $500,000.00 or $1 million investment, the term “substantial” for an E-2 visa is not so clear-cut. The unwritten rule of thumb is that the investment should be approximately $250,000.00 USD if the business/enterprise is new. There may be some cases where the investment is as low as $50,000.00. However, these cases usually involve businesses that act as a subsidiary to a parent company in the foreign national’s home country. In these types of situations, the investor may also want to consider an L visa.

What does ‘at risk’ mean?

This means that the investment must be at risk of being lost of the business is unsuccessful. Otherwise, there would be a glutton of people applying for E-2 visas - knowing that there is no risk in losing their investment.

Pros and cons

The E-2 visa is a great vehicle for foreign nationals and their families to live in the United States while operating a business. One advantage is that the application can be processed within three weeks under Premium Processing. Another advantage is that the visa is valid for three years, and renewable indefinitely so long as the business continues to operate.

The downside is that the investment amount can be significant, and you risk losing all the money and being forced to return to your home country if the business is unsuccessful. There is also no direct path to permanent residency on an E-2 visa. While an E-2 visa holder may obtain a green card through employment or marriage, the E-2 visa itself does not make one eligible for permanent residency.