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Visas Through Treaties

by Cyrus D. Mehta

With the lowering of the limit of the H-1B worker visas from 195,000 to only 65,000, nationals of countries that extensively use the H-1B visas will soon get affected when the cap is expected to be reached in early 2004. Citizens of India will be the most affected as they are one of the biggest users of the H-1B visa program. On the other hand, citizens of countries that have treaties with the U.S. may be able to take advantage of other work visa options. [ modified 01/15/04 Ed. ]

The Treaty Trader (E-1) and Treaty Investor (E-2) visas result from treaties of Friendship, Commerce and Navigation (FCNs) between the US and another country. With such a treaty in place, nationals of the other country can apply for the E-1 or E-2 visa. FCNs are bilateral treaties between countries that extend various privileges to nationals and companies of foreign nations often including: the right to trade and establish businesses, the right to use the court system, the right to own or lease property, and sometimes most favored nation status. [ modified 01/15/04 Ed. ]

Section 101(a)(15)(E) of the Immigration and Nationality Act specifically authorizes the issuance of E-1 and E-2 visas to nationals of a country that has an FCN treaty with the U.S.1 The E-1 visa is applicable to a treaty national entering the U.S. solely to carry on substantial trade, which is international in scope and principally between the U.S. and the foreign state. The E-2 visa applies to a treaty national [or an entity owned by the treaty national(s)] to develop and direct the operations of an enterprise in which he or she has invested or is actively in the process of investing a substantial amount of capital.

There is no bright line test of what would constitute a “substantial” amount of capital. The U.S. State Department acknowledges that the costs of investing in a business can vary dramatically, depending on the nature of the business: many millions to buy an automobile factory; and only a relatively small sum to set up a consulting firm.2

In recent times, Bilateral Investment Treaties (BITS) negotiated by the U.S. with several countries are also recognized as equivalent to an FCN, but only for purposes of conferring E-2 visa authorization. The U.S. Bilateral Investment Treaty (BIT) program supports several key U.S. government economic policy objectives, including the protection of U.S. investment overseas and the promotion of market-oriented policies in other countries, as well as the indirect export promotion of U.S. goods and services.3

Another means of conveying the treaty trader/treaty investor visas was employed by the Immigration Act of 1990, where nationals of Australia and Sweden were granted E-1/E-2 benefits provided reciprocal benefits are extended to U.S. citizens.

At present, India does not have an FCN treaty, BIT or equivalent treaty with the U.S., although it has entered into BITs with several other countries. The Indian government should explore entering into such a treaty agreement with the U.S. If such a treaty is ratified, it will be open up the E visa possibility for Indian citizens who would be able to bring in to the U.S. investment and entrepreneurship for the mutual benefit of both countries. [ modified 01/15/04 Ed. ]

Unlike the L-1 visa, the E visa categories do not require the setting up of a branch, subsidiary or parent in the U.S. of a foreign entity. Furthermore, the proposed legislation to restrict the L-1 visa category does not include the E visa category.

The E visa category also has less government regulations compared to the H-1B visa category. There is no prevailing wage requirement, labor certification attestation, posting and public access file requirements. An E visa employee must be a national of the treaty country and also must function in an executive or a supervisory role or possess essential skills. One can only avail of the E visa if the employee works for a U.S. company that is owned by treaty country nationals.

In addition to the FCNs and BITs, other treaties have also given broad immigration benefits to certain countries. The best example is the North American Free Trade Agreement (NAFTA) between the US, Canada and Mexico that came into effect in 1994. Besides allowing nationals of the treaty countries to have access to E-1 and E-2 visas, NAFTA also created a special TN visa that allows nationals of Canada and Mexico to work in the US in specific occupations that have been designated under NAFTA. [ modified 01/15/04 Ed. ]

More recently, in 2003, the U.S. entered into free trade agreements with Singapore and Chile. Not only will E visa benefits accrue from these agreements, but 6,800 (or 10%) visas of the H-1B visa cap of 65,000 have been reserved for nationals of Singapore and Chile.

Instead of waiting for U.S. Congress to expand the H-1B visa category, a country such as India may wish to enter into a bilateral treaty out of which additional immigration benefits can accrue to its nationals, such as the E visa categories, which in turn will benefit the economies of both countries.

1 The following countries have treaties containing either E-1 or E-2 provisions or both: Albania, Argentina, Armenia, Australia, Austria, Bahrain, Bangladesh, Belgium, Bolivia, Brunei, Bulgaria, Cameroon, Canada, China (Taiwan), Colombia, Congo (Brazzaville), Congo, Dem. Rep. Of the (Kinshasa), Costa Rica, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Grenada, Honduras, Iran, Ireland, Israel, Italy, Jamaica, Japan, Kazakhstan, Korea, Kyrgyzstan, Latvia, Liberia, Luxembourg, Mexico, Moldova, Mongolia, Morocco, Netherlands, Norway, Oman, Pakistan, Panama, Paraguay, Philippines, Poland, Romania, Senegal, Slovak Rep, Spain, Sri Lanka, Suriname, Sweden, Switzerland, Thailand, Togo, Trinidad & Tobago, Tunisia, Turkey, Ukraine, United Kingdom, countries of former Yugoslavia.

2 See 9 Foreign Affairs Manual § 41.51 n. 10.3.

3 See US State Department Fact Sheet on US Bilateral Investment Treaty Program, available at

About The Author

Cyrus D. Mehta, a graduate of Cambridge University and Columbia Law School, practices immigration law in New York City. He is First Vice Chair of the American Immigration Law Foundation and recipient of the 1997 Joseph Minsky Young Lawyers Award. He is also Chair of the Immigration and Nationality Law Committee of the Association of the Bar of the City of New York. He frequently lectures on various immigration subjects at legal seminars, workshops and universities and may be contacted at 212-425-0555 or

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.