In 2012, then-President Barack Obama signed legislation allowing nationals of Israel to apply for E-2 treaty investor status, but benefit would not be available until Israel provided similar status to U.S. nationals. In March 2014, the Israeli government passed such a bill creating B-5 status for American investors. Further enabling regulations were necessary, however, because Israel had no path for granting work permits to foreign nationals based on investment alone. On June 21, 2018, the Interior Committee of the Knesset enacted the necessary regulations. Now, it is up to the U.S. Department of State to determine if the Israeli legislation meets the “similarity of status” requirement, i.e., is it reciprocal?

According to USCIS, to qualify for E-2 treaty investor status the investor must:

  • Be a national of a country with which the United States maintains a treaty of commerce and navigation;
  • Have invested, or be actively in the process of investing, a substantial amount of capital in a bona fide enterprise in the United States;
  • Be seeking to enter the United States solely to develop and direct the investment enterprise by showing at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device;
  • The investment must be at risk; and
  • The funds invested must not have been obtained directly or indirectly from criminal activity.

E-2 treaty investor status is distinct from E-1 treaty trader status. Israel has been eligible for E-1 treaty trader status since 1949, but that status requires the company already to be carrying on substantial trade. It also requires such trade to be principally between the U.S. and the treaty country which qualifies the treaty trader for E-1 status. These requirements would not cover start-ups or entrepreneurs who wish to create businesses or subsidiaries in the United States.

Jackson Lewis will continue to follow the progress of E-2 treaty investor status for Israel and provide updates as soon as they are available.