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Important E-1/E-2 Treaty Trader/Investor Visa Changes

By Matt Schulz and Mengci Shao
January 6, 2023
  • Citizenship
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Citizenship by Investment programs are detrimentally impacted by important changes to US law for the E-2 treaty investor visa were included in the James M. Inhofe National Defense Authorization Act for Fiscal Year 2023 (H.R. 7776/NDAA) signed into law by President Biden on December 24, 2022.

The Good News.

Citizens of Portugal who satisfy the other requirements are now eligible for E-1 Treaty Trader or E-2 Treaty Investor visa status now that the US has designated Portugal as a treaty country.

The Bad News.

E visa status will not be so readily available to citizens of treaty countries who acquired citizenship through investment.

The US now requires individuals who acquired citizenship in a treaty country through financial investment to be domiciled in that country for a continuous period of not less than 3 years at any point before applying for an E nonimmigrant visa.

This rule is not retroactive.  Existing E visa holders are not subject to this rule.

Backgrounder.

As of the date of this writing, the US State Department has not yet revised its Foreign Affairs Manual (“FAM”) or online list of treaty countries to reflect this changes in US law, which were effective immediately upon signing by the President.

Citizens of countries that have entered into E visa treaties with the US have be able to obtain E visa benefits for their substantial trade or investment in the US if they acquired citizenship in a country with an E visa treaty.  While most countries require immigrants to first secure resident status and then complete a period of physical presence before acquiring citizenship, some countries offer pathways direct to citizenship, often through investment in government programs or local property.

These “Citizenship by Investment” programs often provide a number of different benefits to investors.  Some of those benefits are the rights citizens there have under treaties with the US, which may include longer duration of visas, participation in the US Visa Waiver Program (“ESTA”), and E-1 and E-2 visas.

For example, Grenada’s Citizenship by Investment program imposes no requirement that the new citizen reside in Grenada for any minimum period to become a citizen.  Grenada citizens are eligible for ESTA, E-1 and E-2 visa benefits.  Depending on the country of their other citizenship, Grenada citizens who are eligible for other visas, may receive those visas for longer times than the applicant’s other country of citizenship, based on the US State Department’s reciprocity reports.

Under the new law, E-1 and E-2 visa benefits will no longer be immediately available to investors who acquired citizenship in a treaty visa country.  The new law will require such applicants to prove that they were domiciled in that country for a continuous period of not less than 3 years at any point before applying for an E nonimmigrant visa.

Presumably the implementing FAM will define what “continuous period” means.  US immigration law does not necessarily use a consistent definition of this term in other areas.  Typically, absences for limited periods are not considered to break the continuity of the residence required. 

Just how much actual physical presence will be required remains to be seen, but the fact that such residence must be for a period of at least 3 years means the popularity of Citizenship by Investment programs is likely to decline for those motivated by dreams of E visas.

In creating this new law, the US has unilaterally detrimentally impacted the E visa treaty rights entered into with other countries.  Countries with Citizenship by Investment programs established these programs to attract foreign investment to meet their nation’s needs.  The changes in US law hurt those treaty partners of the US.  Careful review of the new US law shows it only applies to Citizenship by Investment Programs and does not apply to Residence by Investment programs, which the US and many other countries have.  Countries with Citizenship by Investment programs might consider revising their laws to create Residence by Investment programs accompanied by subsequent citizenship programs that have requirements attractive to foreign investors (e.g., little to no residence requirement and a short qualifying period).

For more information, contact the authors or your Dentons attorney.

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Citizenship, E-1 visa, E-2 visa, Foreign affairs manual, Immigration, US State Department, visas
Matt Schulz

About Matt Schulz

Matt Schulz is a member of Dentons' Litigation and Dispute Resolution practice with a focus on business immigration and employment law. He is a leader in the firm's Global Mobility practice and a member of Dentons' Venture Technology and Emerging Growth Companies practice.

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Mengci Shao

About Mengci Shao

Mengci Shao is a member of Dentons' Global Mobility practice and of the Employment and Labor practice. She practices immigration law with a focus on business immigration for corporate clients and businesses in the United States and worldwide. She helps employers plan and implement global transfers, secured appropriate work permits, provided pre- and post-transfer counseling to help ensure the proper drafting and execution of employment contract, and advised employers on staffing strategies, personnel policies, corporate compliance and best practices.

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