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Israeli E-2 Visa Bill Signed By President Obama

In a rare case of bipartisan action, Congress passed legislation to add E-2 visas to the list of Treaty Investor countries. Historically, Israelis have only been able to use the E-1 Treaty Trader visa, but not the E-2 Treaty Investor visa. E-1 visas require a primarily Israeli owned US company engaged in substantial trade in goods or services between the US and Israel. Otherwise, Israelis have had to use the EB-5 permanent residence investor program, L or H visas depending upon the scenario. On June 8, 2012, President Obama signed into law H.R. 3992. The House version of the bill was sponsored by Rep. Howard Berman (D) from Los Angeles. A similar bill passed the Senate (S-921). E-2 nonimmigrant visas are available for foreign investors and some of their employees (executives/managers and “essential skill employees”) who also have citizenship of the treaty country (but do not have US citizenship or green cards). The US company must be at least 50% owned by nationals of the treaty country. Israelis have invested $58.5 billion into the US between 2000 and 2010 and conducted $26.9 billion in trade between our two countries in 2011 alone.

The E-1 Treaty Trader/E-2 Investor visas require that Americans be treated similarly when investing or trading in counterpart countries. The E-2 visas are not yet in effect, as Israel and the US work out the details.

The E-2 visa differs from the permanent residence EB-5 entrepreneur investor program. Advantages of the E-2 visa are that there are no specific dollar amounts required for investment nor specific numbers of jobs to be created. The visa is available to the person(s) directing and developing the investment as well as to treaty nationals who are managers/executives or have “essential skills.” Investment amounts depend upon the nature and type of the business and the proportion being invested to the total amount needed to buy, start and/or operate the business. E-2 visa holders can come and go, which may be advantageous for tax purposes compared to needing to stay in the US permanently in EB-5 status. The visa can be renewed indefinitely so long as the company and investors/employees continue to qualify. By contrast, the EB-5 program is for permanent residence and requires either a minimum $500,000 or $1,000,000 investment by the actual investor needing the green card. The investment must create at least 10 jobs over a two-year conditional residence period, with a lot of rules governing job creation. However, there is no requirement that the EB-5 enterprise be owned by a certain nationality. Depending upon the facts of the case, in theory, an E-2 investor could transition over a period of time to qualify for EB-5 permanent residence down the road. There are many other features of both visa types not mentioned here. More information about E-2s for Israelis can be found on the website for the US Embassy in Tel Aviv.