Our clients often ask us: What is substantial trade? What amount is substantial? How many transactions there have to be over a period of time?
Please note that there is no clear answer as to what is substantial trade and the Consulate will determine whether this requirement is satisfied on a case-by-case analysis.
Substantial trade means that there must be a “continuous flow” of trade items between the U.S. and the treaty country. This means, that there must be numerous trade exchanges between the U.S. and the treaty country over time. This usually means at least scores of transactions with high dollar values. The trade should be over a period of time and for a minimum of 6 months and normally would represent amounts that exceed $250,000.
The Consulates are instructed to focus on the volume of the trade, but they also may take into consideration the monetary value of each transaction and a greater value will be given to numerous transactions over time of a larger value. However, a single transaction (even if of an extremely large monetary value) will not be able to demonstrate that the trade is substantial. As a rule of thumb (although it could be less), there should be at least 25 transactions where the dollar value exceeds $250,000.
Can a small business owner prove that the trade is substantial?
Yes. The regulations specifically state that small businesses can also qualify for an E-1 visa if they can demonstrate numerous transactions over a period of time (even though they are smaller in value). In addition, if you are a small business owner, the Consulate will look if the income from the international trade is sufficient to support you and your family. While amounts smaller than $250,000 are possible lower amounts may make the case riskier.
Please note, that the trade has be “substantial” even after you get your E-1 visa as if you want to renew your visa, you will have to demonstrate that the trade has been substantial.
Please see our blog post on whether you need a Business Plan for E-1 visa when you click here.
Please see our blog post on whether your business in your home country has to continue after you get an E-1 visa when you click here.
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