The Treaty Investor Visa (E-2), a Cheap Way to Buy Entry into the U.S.

We at CIS, for reasons outlined below, routinely pay little attention to the Treaty Investor (E-2) program, which grants extended temporary legal status in the United States, but a neglected Government Accountability Office report that has just come to my attention documents how inexpensive it can be to join the program.

While the Immigrant Investor (EB-5) program comes with a minimum price of $900,000, two-thirds of those getting E-2 visas have invested $200,000 or less. In fact, 30 percent of these arrivals have invested $100,000 or less to get the visas, as this telling figure from the report shows:

The GAO data, generated from the E-2 investors themselves, raises significant policy questions: Should we be handing out semi-permanent visas at such bargain rates? Should we grant these visas, as USCIS routinely does (and as State does not), without face-to-face interviews with the applicants? The report does not raise those two questions, but does encourage more training for officers making these decisions, more coordination between the two agencies involved, more care in fraud detection, and more document retention.

The Treaty Investor program, which is largely run by the State Department, gives nationals of certain countries the right to migrate to the United States to open a business. There must be an existing treaty between the United States and the other nation before the visa can be granted. The investor and his or her spouse, and their under-21 dependents, all get work permits. These visas may be — and usually are — extended for multi-year periods as long as the government is satisfied that the businesses are continuing to operate. The question of initial E-2 grants and extensions are usually decided by junior diplomats sitting thousands, if not tens of thousands, of miles from the business in question. Other decisions are made by USCIS staff within the United States.

Why the lack of the Center's full-scale attention to this program? The E-2s are neither very numerous, in the scale of immigration, generally, nor are they likely to be victimized (as can happen to foreign farmworkers and some EB-5 investors), nor are they likely villains who exploit others, though that sometimes happens. The E-2 migrants do not come in clumps that distort markets. Further, because they are nonimmigrants, they cannot play a major role in chain migration.

Finally, whatever corruption there is in the program (the admission of non-eligibles), by definition, is mostly small-scale in nature. The new visas and extensions number about 40,000 to 50,000 a year, but the whole population of E-2s is probably several times as large.

The GAO report tells us that only four countries account for 5 percent or more each of the E-2 beneficiaries, with South Korea leading the pack by a huge margin, as the following table shows:

China and India, the lead sources of immigrants to the United States, generally, are not on the list above because we do not have the specific kind of treaty with those nations that would allow for the admissions of E-2s.

Returning to the question of fraud, the only kind discussed in this sober and largely thorough report (like most of the others from GAO) is the question of investor eligibility for the program. That is unfortunate because there have been instances in which the principal E-2 person has brought in — usually from his own country — "key employees" who have been exploited by the principal. The State Department, which has no field staff within the United States, in this program and its numerous J-1 activities (such as summer work travel) has been shown to be particularly useless when it comes to preventing worker abuse in its programs in the States.

We reported on one such instance in a remote Louisiana shipyard and another on Guam, where foreign-worker exploitation is widespread, but I saw nothing about such matters in this report.

In a report several years ago, we summarized the problems with the E-2 program in this way:

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.