The U.S. Embassy in Israel has announced that the necessary agreement has been signed and Israeli citizens will be able to apply for an E-2 Visa as of May 1, 2019. This is an important announcement for the Israeli high-tech sector and the U.S. economy because it opens new possibilities for Israelis wishing to create start-ups in the U.S. or open subsidiaries in the U.S.
President Barack Obama had signed legislation in 2012 allowing nationals of Israel to apply for E-2 treaty investor status, with the caveat that the benefit would not be available until Israel provided similar status to U.S. nationals. In 2014, the Israeli government passed such a bill, but the necessary regulations were not enacted until June 2018. The U.S. Department of State has determined the Israeli legislation (the B-5 Visa) was reciprocal.
Israelis have been eligible for E-1 Treaty Trader status since 1949; however, that status requires the Israeli company to have been engaged in substantial trade. It also requires such trade to be principally between the U.S. and the treaty country. Neither of these requirements could be easily met by a start-up or even a more mature company that is planning on growing in the U.S.
Israel has long been known as “Start-Up Nation” (based on a book by the same name published in 2009). Israel has the largest per capita number of start-ups of any country – by a margin. In Israel, there is one start-up for every 1,400 people. In France, 0.112, and in Germany, 0.056. The area between Tel Aviv and Haifa, known as “Silicon Wadi,” is one of the world’s best start-up environments, second only to Silicon Valley in the U.S.
To qualify for an E-2 visa, an individual must, among other things:
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Be a national of a treaty country;
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Invest a “substantial” amount of capital; and
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Have at least a 50-percent ownership interest in the enterprise or have operational control.
Further, the investment must be at risk and the funds must not directly or indirectly result from criminal activity.
The U.S. Embassy in Israel has directed Israelis who wish to apply for E-2 visas to submit all application materials by mail to the Embassy’s Branch Office in Tel Aviv. Jackson Lewis attorneys are available to assist in this process.
