Treaty Trader (E-1) and Treaty Investor (E-2) Visas

David North | Center for Immigration Studies While there have been news stories and congressional hearings on EB-5 visas (the immigrant investor program), a roughly comparable program that brings in about four times as many aliens has drawn virtually no attention. This is the Treaty Trader (E-1) and Treaty Investor (E-2) program. It provided nonimmigrant visas for more than 42,000 aliens in 2013, the last year for which we have statistics. Unlike the EB-5 program, it offers only temporary visas for traders and investors, and unlike the EB-5 program its growth in recent years has been steady, but not dramatic. A few years ago EB-5 visas were counted in the hundreds; now that program — with massive encouragement from the Obama administration — is bumping up against the statutory maximum of 10,000 visas a year. (The E-1 and E-2 program has no numerical ceiling.) These treaty programs, again unlike EB-5, are run largely by the U.S. Department of State, and require virtually no interaction with U.S. local business organizations or with other U.S. government agencies at any level. If the alien seems to fit the department’s image of a treaty trader or investor, he or she gets a visa after an overseas interview. (It is possible to secure a states-side adjustment to E-1 or E-2 status, but the resulting document does not allow its holder to leave the United States and return.) The only management of the program comes through the visa renewal process. Every two years the visas have to be renewed, but as long as the State Department regards the business as “substantial” there is no limit on the number of renewals. There are three obvious areas of concern with these E visas: 1) there is absolutely no oversight of the aliens involved within the United States; 2) there is no numerical ceiling on the number of visas that can be granted; and 3) there is no floor on the appropriate amount of money to be invested. In contrast, the fraud-bedeviled EB-5 program looks almost responsible in comparison. The program is divided into two subcategories, traders and investors. E-1 visas go to persons who engage in international trade and to their family members and employees; it is the smaller of the two subparts of this program. E-2 visas are for treaty investors, their family members, and their employees. In both parts of the program all those described are allowed to work in this country, but as children pass their 21st birthday they “age out”, i.e., they must either leave the country or move into another visa status, such as F-1 for students. Treaty traders tend to represent overseas corporations; treaty investors usually run their own companies here. Statistical Trends. As Table 1 indicates, the two categories have moved in different directions over the last 20 years. Using the measure of visas issued, we see that the trader category has dropped from about 11,000 a year in the mid 1990s to 6,000 or 7,000 in recent years. Meanwhile, the treaty investor portion of the program has moved up from about 19,000 a year in the 1990s to more than 35,000 in 2013.


Table 1. Treaty Trader (E-1) and Treaty Investor (E-2) Visas Issued 1994-2013
Year E-1 E-2
1994 11,695 19,236
1995 11,082 19,103
1996 10,471 19,438
1997 9,497 20,261
1998 9,457 20,775
Five-Year Total 52,202 98,813
Year E-1 E-2
1999 9,973 22,975
2000 9,539 26,981
2001 9,309 27,577
2002 7,811 25,633
2003 7,590 24,506
Five-Year Total 44,222 127,672
Year E-1 E-2
2004 8,608 28,213
2005 8,867 28,290
2006 8,015 29,453
2007 7,413 29,298
2008 6.862 28,588
Five-Year Total 39,765 143,842
Year E-1 E-2
2009 6,432 24,033
2010 6,279 25.5
2011 6,807 28,245
2012 6,907 31,942
2013 7,283 35,272
Five-Year Total 33,708 144,992

Source: U.S. Department of State’s Report of the Visa Office for 1994 through 2013.
 
Table 2. 33 Largest Users of Treaty Trader (E-1) and Trader Investor (E-2) Visas Issued, 1997 and 2013
2013 E-1 2013 E-2 1997 E-1 1997 E-2
Europe
Austria 17 130 69 82
Belgium 6 182 44 104
Bulgaria 0 55 1 5
Denmark 27 124 123 9
Finland 11 51 83 74
France 172 2,218 199 883
Germany 1,317 3,811 764 1,661
Great Britain & N. Ireland 219 2,488 406 2,160
Ireland 33 264 16 44
Italy 245 1,173 278 416
Netherlands 25 439 95 218
Norway 163 154 180 116
Poland 3 53 2 26
Spain 112 1,299 97 161
Sweden 30 446 48 444
Switzerland 12 147 86 280
Turkey 33 244 36 34
Ukraine 4 54 1 0
Total: 18 Nations 2,429 13,332 2,528 6,717
Asia
China-Taiwan only 744 391 770 198
Mainland China* 9 48 6 15
Israel 340 37 740 7
Japan 1,625 11,333 3,330 10,041
Korea, South 287 2,425 1,142 957
Pakistan 8 54 68 35
Philippines 7 74 53 83
Thailand 28 320 92 103
Total: 7 Nations +PRC 3,048 14,682 6,201 11,439
Oceania
Australia 40 313 30 182
North and Central America
Canada 363 2,609 92 1,013
Honduras 8 51 1 1
Mexico 1,198 3,001 263 586
Total: 3 Nations 1,569 5,661 356 1,600
South America
Argentina 33 310 64 69
Brazil 8 46 8 26
Columbia 70 220 66 57
Venezuela 1 124 2 18
Total: 4 Nations 112 700 140 170
Total: 33 Nations 7,198 34,688 9,255 20,108
Total Worldwide 7,283 35,272 9,497 20,261

Source: U.S. Department of State’s Report of the Visa Office for 1997 through 2013. * The program is not open to Chinese; these are visas issued to people from other countries who applied at one of our consular posts in China.
The United States has treaties of commerce and navigation with 80 nations, some of which are listed above. In 54 cases they relate to both treaty traders and treaty investors; in another 26 cases they involve only treaty investors. (We have many other treaties with the nations of the world, but only these treaties create the E-1 and E-2 visas.) Whereas the Obama administration has been promoting the EB-5 program in a number of different and sometimes questionable ways it has not taken a similar posture regarding these treaties — no new ones have been signed since 2008. What growth there has been in the program comes from issuing more visas in the countries that are already in the program, with some of these arrangements dating back to the 19th Century. These treaties are reciprocal in nature; they provide American business people the same set of rights in the treaty countries that the citizens of the other countries enjoy here. The treaties tend to be made with other prosperous countries and Table 2 shows few low-income nations. Two large nations, China and India, are not on the list. The lack of Chinese access to E-1 and E-2 visas explains, to some extent, the interest in the EB-5 program by rich Chinese. How these programs are used, and sometimes abused, will be the subject of a subsequent blog.
The author is most grateful to Sally Devin who found the data and constructed the tables.   Source: Center for Immigration Studies]]>

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