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E-1 and E-2: Japanese-owned Businesses Can Hire Japanese Citizens to Serve as Executives and Managers

HiResA good business plan involves consideration of both short-term and long-term goals. Your plans should do the same for your management and business employees; getting them into the U.S. as you start or grow your business, and keeping the organization properly staffed as it succeeds. This occasional blog provides guidance regarding some of the most common and important employment-based U.S. immigration options.  

Today’s blog focuses on an employment-based immigration option available to citizens of particular countries; in this case, Japan. I will follow up with additional information about these options for other countries in the future.

In my last blog, I wrote about one of the fastest and easiest ways to transfer a valued employee to the U.S. to work for a related business entity: the L transfer option. But what options do you have if the person you have identified for a U.S. position has never worked for you, or has worked for you, but not for the one year required for the L transfer option? Or what if the person qualifies for the L transfer option, but U.S. employment is sought for more than the up to seven years authorized for L status, and the person does not want to become a U.S. permanent resident?

An additional employment-based immigration option is available if the business operating in the U.S. happens to have significant (50% or more) Japanese ownership or investment. The U.S. and Japan have a “Treaty of Commerce and Navigation” that makes it possible to hire Japanese citizens, whether they are still in Japan or already in the U.S., to provide executive, managerial, or “essential” services. No previous employment with any of your companies is required.

The E process may involve a filing at a U.S. consulate overseas and/or a mail-in petition in the U.S. Government-charged filing fees at U.S. consulates in Japan start at $270. Mail-in filings in the U.S. have a $325 filing fee. Mail-in filings can take one month or more for review, and visa issuance in Japan can take just as long or longer, depending on the availability of appointments.

One particular advantage of this option is that the status has the potential of being renewed indefinitely, which is the reason why many Japanese businesses choose the E process for many employees, even if other employment based immigration options are available.

Two versions of E status are available.

The E-1 (“Treaty Trader”) is available based on the U.S. business having “substantial trade” with Japan. Items of trade include but are not limited to:

  • Goods
  • Services
  • International banking
  • Insurance
  • Transportation
  • Tourism
  • Technology and its transfer
  • Some news-gathering activities.

To qualify for E-1 classification, the Japanese employee of a treaty trader must be an employee engaging in duties of an executive or supervisory character, or if employed in a lesser capacity, have special qualifications.

The other version of E status is the E-2 (“Treaty Investor”), which is available based on a “substantial investment” by Japanese in a U.S. business, such that the U.S. business is at least 50% owned or controlled by Japanese.

The treaty investor must be Japanese and must have invested, or be actively in the process of investing, a substantial amount of capital in a bona fide enterprise in the United States. The government does not define how much the investment must be. It can vary from a relatively low percentage compared to the total cost of purchasing or establishing a large U.S. business, up to 100% for a relatively small U.S. business. And the investment must generate more than enough income to provide a minimal living for the treaty investor and his or her family. Treaty Investor E-2 status is available for the qualified investor who seeks admission to develop and direct the enterprise, as well as for non-investing executives, supervisory and essential workers.

The Immigration Group is available to work with you as you consider employment-based immigration options for you or your employees.

 

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The International Practice Group of Garvey Schubert Barer is a cross-disciplinary group of attorneys practicing in areas ranging from business transactions, immigration, maritime, government regulatory work, transportation and logistics, and estate planning. The group members include bilingual and multicultural attorneys who are well-versed in handling these subject matters in a cross-border context. The firm’s attorneys have been actively practicing in the international arena since the early 1970s. 
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