The distinction that runs through all of it is between “no registration required” and “no law applies.” Those are not the same thing, and the antifraud rules never switch off.

Is it a security at all?

The investment contract test. SEC v. W.J. Howey Co., 328 U.S. 293 (1946), asks “whether the scheme involves an investment of money in a common enterprise with profits to come solely from the efforts of others.” Courts no longer read “solely” literally; the question is whether the efforts of others are the significant ones.

Stock is stock. Landreth Timber Co. v. Landreth, 471 U.S. 681 (1985), held that an instrument called stock, bearing stock’s usual characteristics, is a security, and rejected the “sale of business” doctrine. Control is irrelevant. The companion case, Gould v. Ruefenacht, 471 U.S. 701 (1985), reached the same result on a fifty percent purchase.

Assets are not. The statutory definition at 15 U.S.C. § 77b(a)(1) enumerates instruments: notes, stock, bonds, investment contracts, and the like. Equipment, inventory, goodwill, leases, and customer lists are not among them, and Texas parallels the federal list at Tex. Gov’t Code § 4001.068(a). An asset purchase generally has nothing for the Acts to operate on.

But watch the seller note. Most asset acquisitions are partly seller-financed, and a note is presumptively a security. Reves v. Ernst & Young, 494 U.S. 56 (1990), applies a family-resemblance test with recognized exceptions including a note secured by a lien on a small business or its assets. A single secured acquisition note that is not distributed comfortably fits that exception. It is an analysis, not an automatic pass.

LLC interests depend on the operating agreement. There is no per se rule. Courts run Howey on the governance documents. A member-managed LLC interest held by a member with real governance rights, including the ability to remove managers, is usually not a security. A manager-managed interest held by a passive member usually is. What controls is the objective ability to exercise control under the agreement, not whether you exercise it. See Great Lakes Chemical Corp. v. Monsanto Co., 96 F. Supp. 2d 376 (D. Del. 2000), and Robinson v. Glynn, 349 F.3d 166 (4th Cir. 2003).

General partnerships, and a warning aimed at foreign investors. In the Fifth Circuit, which governs Texas, Williamson v. Tucker, 645 F.2d 404 (1981), holds that a general partnership or joint venture interest generally is not an investment contract, but the presumption is rebuttable. One of the three ways to rebut it is that the partner “is so inexperienced and unknowledgeable in business affairs that he is incapable of intelligently exercising his partnership or venture powers.”

Picture the man that describes. He arrived eight months ago. His English is functional but not fast. He has never run a U.S. company, he does not know what a UCC filing is, and his “partner” handles the bank, the payroll, the landlord, and the books. On paper he is a general partner with full voting rights. In practice he signs what he is handed. That is Williamson factor two, and it converts his partnership interest into a security, with everything that follows.

It is one more reason the governance documents matter, and one more reason a foreign investor should not take a U.S. partner’s word for what he is signing.

What that means in practice

The favorable half nobody mentions

Because a stock purchase is a securities transaction, an E-2 buyer misled by a seller’s misrepresentations has a federal Rule 10b-5 claim and, in Texas, a statutory rescission remedy under Tex. Gov’t Code § 4008.052 that an asset buyer would not have. That is a genuine reason a client might prefer a stock deal, and it belongs in the analysis alongside the tax and liability reasons. See Buying an Existing Business on an E-2.

The exemptions, when a security is involved

Section 4(a)(2), 15 U.S.C. § 77d(a)(2), exempts “transactions by an issuer not involving any public offering.” SEC v. Ralston Purina Co., 346 U.S. 119 (1953), asks whether the offerees can “fend for themselves,” and puts the burden of proving the exemption on the issuer. Exemptions are affirmative defenses you have to be able to prove, which is why documentation stays mandatory even when filings are not.

Regulation D. Rule 506(b) permits an unlimited number of accredited investors and no general solicitation. Rule 506(c) permits general solicitation but requires all purchasers to be accredited and reasonable steps to verify it. Rule 506 securities are “covered securities,” which preempts state registration. Rule 504 is not covered, which is why multi-state raises use 506.

Accreditation is not a residency concept. A foreign national qualifies on the same net worth and income tests at 17 C.F.R. § 230.501(a), and non-U.S. assets and income count. E-2 and EB-5 investors are very often accredited. Entity category (a)(8), where all equity owners are accredited, is the workhorse for a foreign family holding vehicle.

Regulation S matters most to this audience. Offers and sales occurring outside the United States are outside § 5, on two conditions: an offshore transaction, and no directed selling efforts in the United States. Equity of a non-reporting U.S. issuer, which describes nearly every EB-5 new commercial enterprise and every private U.S. operating company, falls into Category 3 and carries a one-year distribution compliance period, offering restrictions, purchaser certifications, and legends.

Two things clients consistently misunderstand about Reg S. It does not make the interest “not a security.” And it does not displace antifraud law. Regulation S says expressly that it relates solely to § 5 and not to the antifraud provisions.

What changed in 2025 and matters to EB-5. On March 12, 2025, SEC staff took the position in a no-action letter, with accompanying interpretations, that a high minimum investment amount is itself a relevant factor in verifying accredited status under Rule 506(c). Reported thresholds are $200,000 for natural persons and $1,000,000 for entities. Three conditions attach: the investor represents in writing that he is accredited; he represents that no third party financed the investment in order to make it; and the issuer has no knowledge to the contrary. Every EB-5 investment exceeds the natural-person threshold, which is a practice-changing development for offerings marketed to investors abroad who could not easily produce U.S.-style documentation.

Which state’s rules reach you

The two sections that follow are for two different readers. If your business and your investors are in Texas, read the Texas section and skip Illinois. If you are in Illinois, do the reverse. If your investors are in several states, you need all of them, and the preemption section after that explains why the list is shorter than you fear.

Texas: two exemptions, one filing, and a felony

The Texas Securities Act was recodified into Government Code Title 12, Chapters 4001 through 4008, effective January 1, 2022. The recodification was expressly nonsubstantive, so pre-2022 case law construing former Article 581 remains good authority.

One correction to a belief I hear regularly: the Texas State Securities Board was not consolidated into another agency. It continues as an independent agency, and was continued by the Legislature through 2031.

The exemptions likely to apply:

• 4005.004, isolated transactions.Where the seller is not in the business of selling securities and the sale is an isolated transaction not made in the course of repeated and consecutive transactions, involving personal investment of the seller’s personal holdings or a change in investment. This is the exemption that covers a one-off E-2 stock purchase from an individual owner.
• 4005.012, limited offerings.Sales made without any public solicitation or advertisement, where the issuer’s total security holders do not exceed thirty-five after the sale, or where the issuer sold to not more than fifteen persons in the preceding twelve months. No filing and no fee.
• 7 TAC § 139.19, the uniform accredited investor exemption. Notice of transaction within fifteen days, no fee.

The Rule 506 notice filing. A copy of the Form D through the NASAA Electronic Filing Depository, no later than fifteen days after the first sale in Texas, with a fee of one-tenth of one percent of the offering, capped at $500. No annual renewal.

And the part that makes this post honest. § 4005.001 exempts covered transactions “except as expressly provided otherwise in this title.” Civil liability under § 4008.052 applies “regardless of whether the security or transaction is exempt under Chapter 4005.” Criminal securities fraud under § 4007.203 is graded by amount, and at $100,000 or more it is a first-degree felony. Every EB-5 investment exceeds that threshold.

Illinois: earlier trigger, annual filing, and an independent violation

Under the Illinois Securities Law of 1953, 815 ILCS 5/5, securities must be registered prior to their offer or sale in Illinois unless exempt. Note “offer.” Illinois attaches earlier than the federal Form D trigger at first sale.

Exempt transactions under 815 ILCS 5/4 include the limited offering exemption at 4(G), which requires that sales to Illinois residents in the preceding twelve months have been to not more than thirty-five persons or have involved an aggregate price of not more than $1,000,000, with no general advertising or solicitation in Illinois and compensation not exceeding twenty percent of the sale price; the accredited investor exemption at 4(H); and isolated transactions at 4(Q).

The Illinois trap. Under 815 ILCS 5/2a and 14 Ill. Adm. Code § 130.293, a Rule 506 issuer files Form D with a $100 fee within fifteen days of the first sale to an Illinois resident, and then annually thereafter. Illinois is not a one-and-done state the way Texas is. If the issuer fails to remedy a deficiency within ten business days of notice, the Secretary of State may treat it as a refusal and require registration. And a missed filing is an independent violation under 815 ILCS 5/12(D), not merely a delinquent fee.

What preemption does, and the row people miss

The National Securities Markets Improvement Act, 15 U.S.C. § 77r, preempts state registration and merit review for covered securities, including Rule 506 offerings.

NSMIA preempts state regulation of the security. It does not preempt state licensing of the people selling it.

EB-5, specifically

A regional center EB-5 interest is a security, essentially always. It is a limited partnership interest or a passive LLC interest whose returns depend on a manager’s efforts, which is Howey in textbook form. The SEC has said so in enforcement, charging a regional center operator and thirty-seven affiliated partnerships with offering unregistered EB-5 securities and with broker-dealer registration violations.

Three points for investors.

“Not registered” is not the same as “not regulated.” The SEC and USCIS joint investor alert notes that most regional center offerings are not registered with the SEC or any state regulator. They are unregistered because they are exempt, which is lawful. The alert’s warning is worth quoting: “If your investment through EB-5 turns out to be in a fraudulent securities offering, you may lose both your money and your path to lawful permanent residency.”

Form I-956K is not a broker-dealer registration. The 2022 Act requires direct and third-party promoters to register with USCIS on Form I-956K. That registration does not satisfy, substitute for, or excuse registration under § 15(a) of the Exchange Act or state agent registration. Separate regimes, separate agencies. A person taking transaction-based compensation for soliciting EB-5 investors is acting as a broker, and the SEC has brought cases on that theory. See The July 2026 EB-5 Rule.

A true standalone EB-5 where the investor forms, capitalizes, and actively manages his own enterprise, with no pooling and no promoter, may fall outside the definition of a security on the same reasoning that covers an E-2 founder. Note carefully, though: EB-5 requires only policy formulation, not day-to-day management, so an investor can satisfy the immigration test while remaining entirely passive for securities purposes. The two tests are not the same test, and satisfying the first does not answer the second.

Where that leaves you

For most of our E-2 clients, none of this applies, because no security is involved. For the ones buying stock, the transaction is exempt and the obligation is to deal honestly. For anyone investing in a pooled offering, including every regional center EB-5, the compliance is real, it belongs to the issuer, and it is a reason to read what you are signing.

Regulation D puts it plainly: its exemptions “are not exempt from the antifraud, civil liability, or other provisions of the federal securities laws,” and “nothing in Regulation D obviates the need to comply with any applicable state law relating to the offer and sale of securities.”

If you are buying a business, forming an entity with outside money, or subscribing to an EB-5 offering, the securities analysis belongs before the documents are signed. We handle it in the same engagement as the petition. Call or text 512.761.8479.

Read next: Buying an Existing Business on an E-2 · The July 2026 EB-5 Rule

First, a negative you can rely on

Any page telling you the Foreign Affairs Manual has franchise rules is wrong. Search 9 FAM 402.9 for “franchise,” “franchisor,” or “franchisee” and you will find nothing. The same is true of the regulation.

Good news and bad. A franchise is not disfavored. But the franchisor’s brand does nothing for you at the consulate. Your petition has to prove what any other E-2 petition proves: capital at risk and irrevocably committed, a real and active enterprise, an investment substantial in proportion to the cost, a business that is not marginal, and your own development and direction of it. See The Nine E-2 Requirements.

What a franchise is, legally

Under the FTC Franchise Rule, 16 C.F.R. § 436.1(h), three elements have to be present: the right to operate a business identified with the franchisor’s trademark, or to sell goods or services associated with it; significant control or significant assistance from the franchisor over your method of operation; and a required payment as a condition of obtaining or commencing the franchise.

The disclosure clock, and why a visa deadline is no reason to compress it

Fourteen calendar days. Under § 436.2(a), the franchisor must give you the current disclosure document at least fourteen calendar days before you sign any binding agreement with, or make any payment to, the franchisor or an affiliate.

Seven calendar days for a revised agreement, under § 436.2(b), where the franchisor unilaterally and materially alters the basic franchise or related agreements. Changes arising from negotiations you initiated do not trigger it, which matters if you are negotiating terms through counsel.

Do not let a broker compress those periods because your visa timeline is tight. The clock is a federal requirement, and a rushed signature is exactly what produces the deal terms that break a petition.

Which Items carry which part of the petition

Item 7 is not the denominator

This is the most common mistake in franchise E-2 filings.

Item 7 is the franchisor’s estimated initial investment, published as a range. The E-2 denominator for a new business is “the actual cost needed to establish such a business to the point of being operational,” proved by invoices, contracts, appraisals, and audits. Item 7 corroborates that figure. It does not substitute for it.

An officer comparing your claimed investment against an Item 7 range you never tracked with real invoices is an officer writing a request for evidence.

Item 19 is optional, and that is a real problem

The Franchise Rule permits a franchisor to make financial performance representations. It does not require them. A franchisor that declines has to say so in the FDD, in words to the effect that it makes no representations about future or past financial performance and does not authorize its representatives to make them.

Where a substantive Item 19 exists, you have franchisor-substantiated unit economics, which is far stronger support for a five-year marginality projection than a self-serving pro forma. You are also entitled under § 436.9(d) to request the franchisor’s written substantiation for it, and that substantiation makes excellent supporting evidence.

Where Item 19 is blank, you build the projection from other sources: Item 7 ranges, Item 20 outlet and closure data, comparable-market analysis, and interviews with existing franchisees whose contact details Item 20 requires the franchisor to disclose.

Where franchise law and immigration law collide

If an earnings claim is not in Item 19, it does not go in your business plan.

Under § 436.9(c), a franchise seller may not disseminate a financial performance representation unless the franchisor has a reasonable basis and written substantiation at the time it is made and the representation appears in Item 19. Under § 436.9(a), no claim may contradict the required disclosures. And under § 436.9(h), a franchisor cannot make you waive reliance on the disclosure document.

So when a broker tells you verbally what “a typical unit earns” for a system whose Item 19 is blank, that statement is very likely a Franchise Rule violation by the seller. It is also radioactive as immigration evidence. Building a marginality projection on it puts an unsubstantiated third-party earnings claim in front of a consular officer, in a document you signed.

I have seen the request for evidence that results. A client’s business plan projected $410,000 in year-three revenue, a figure his broker had given him over coffee and which appeared nowhere in the FDD. The officer asked for the source. There was no source. Rebuilding the projection from Item 20 closure data and three franchisee interviews took six weeks and produced a lower number that held up.

That collision is why the franchise review and the petition should be done by the same office.

Where you have to register, and where you do not

Texas is not a franchise registration state. It regulates through the Business Opportunity Act, Tex. Bus. & Com. Code ch. 51, and franchises are exempt under § 51.003(b)(8) if the franchisor materially complies with the FTC Rule and files a short notice with the Secretary of State before offering or selling. No state agency reviews or registers the FDD, and there is no pre-sale approval.

Illinois is a registration state. Under the Illinois Franchise Disclosure Act of 1987, 815 ILCS 705/10, a franchisor may not sell or offer a franchise in Illinois to an Illinois-domiciled franchisee, or where the offer is made or accepted in Illinois and the business will be located there, unless it has registered with the Administrator. Registration becomes effective on the twenty-first day after filing absent a denial, and franchisors must file annually, no later than one business day before expiration, which falls 120 days after the franchisor’s fiscal year end.

Confirm the franchisor’s registration status in the state where you will operate. A franchisor that cannot lawfully sell to you in Illinois is not a timing problem you can negotiate around.

What is new

The FTC’s inflation-adjusted exemption thresholds rose on July 12, 2024: the minimum payment exemption to $735, the large franchise investment exemption to $1,469,600, and the large franchisee exemption to $7,348,000. The same day, the FTC issued a policy statement on franchisor contract provisions and staff guidance stating that franchisors cannot lawfully impose and collect fees that were not previously disclosed.

And on March 18, 2026, the FTC secured a stipulated order against Xponential Fitness with $17 million in consumer redress, which the agency described as the most redress in its history for an alleged Franchise Rule violation. The allegations included misrepresenting how long studios took to open, failing to disclose material litigation and bankruptcy involving executives, and misreporting information about franchisees whose studios had ceased operating.

Every one of those categories is something an E-2 applicant would have relied on in a business plan.

One thing nobody can tell you

No government agency publishes data on how many E-2 visas involve franchise investments. The State Department reports E-2 issuances only by nationality and post, and no franchise regulator tracks purchaser immigration status. Any specific figure you encounter on this point is an estimate, not a statistic.

Send us the FDD before the fourteen days run. We read it for the franchise terms and for what the petition will need from it. Those are two different reviews, and most buyers get them from two different offices, or from none. Call or text 512.761.8479.

Read next: Buying an Existing Business on an E-2 · How Much Do You Have to Invest · The Nine E-2 Requirements

Why an acquisition is a good E-2 vehicle

The regulation contemplates it directly. 22 C.F.R. § 41.51(b)(9)(i)(A) measures substantiality “in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise under consideration.” And the Foreign Affairs Manual gives you the denominator: “The cost of an established business is generally its purchase price, which is normally the fair market value.”

Compare a startup, where the denominator is “the actual cost needed to establish such a business to the point of being operational,” proved with invoices, contracts, and appraisals. A purchase price supported by a valuation is a cleaner number.

An operating business also makes two other showings easier. “Real and active” is nearly self-proving when the doors are open and payroll is running. And marginality projections built on three years of historical financials are far more persuasive than projections built on hope.

Deal term one: how you finance it

This is where good acquisitions fail.

E-2 capital must be “the investor’s unsecured personal business capital or capital secured by personal assets.” A loan collateralized by the assets of the business you are acquiring does not count toward the investment, because you have not put anything of your own at risk. Adding personal collateral alongside business collateral does not fix it. If the business is used as collateral, the borrowed funds are not at risk even where some personal assets are pledged too.

The practical consequence: a conventional acquisition loan, including a typical SBA 7(a) structure, may leave your qualifying investment far smaller than your purchase price. Model the numerator before you sign a term sheet.

Seller financing has a second consequence. A seller-carried promissory note is presumptively a security under federal law, though a single, secured, non-distributed acquisition note ordinarily falls within a recognized exception. It is an analysis, not an automatic pass. See When Your Investment Is a Security.

Deal term two: assets or stock

Buyers usually choose between these for tax and liability reasons. There is a third consequence.

The fourth row surprises people. Buying one hundred percent of a company’s stock is a securities transaction, and the fact that you control the company afterward does not change that. For a one-off private purchase this means no registration and no filings, but the antifraud rules attach, which cuts in your favor: a buyer misled by a seller has remedies an asset buyer would not have. The case law and the Texas rescission remedy are in When Your Investment Is a Security. The point here is that it should be a considered choice, not an accident.

Deal term three: the closing condition

Your capital has to be irrevocably committed, and the Foreign Affairs Manual is unforgiving about halfway measures. Mere intent to invest, uncommitted funds in a bank account, or prospective arrangements entailing no present commitment will not suffice, and neither will “simply signing contracts (which may be broken).”

It also blesses the obvious solution. A purchase conditioned on E-2 issuance can still qualify as an irrevocable investment where the funds or assets are held in escrow for release once the condition is met. That structure protects you commercially and satisfies the regulation at the same time, and it has to be negotiated into the purchase agreement.

Deal term four: who owns the buyer

The acquiring entity must be at least fifty percent owned by nationals of your treaty country who are not U.S. permanent residents.

A buyer I worked with had a broker who preferred equity to a commission. Ten percent, which sounded generous until we put it next to the U.S. citizen partner already holding forty-five. The buyer’s own stake landed at forty-five percent, and the enterprise no longer had treaty nationality. The fix was straightforward, because we caught it in the letter of intent. It would not have been straightforward after closing.

Model the post-closing cap table against the nationality requirement before it is papered. See Five Reasons Your Treaty Passport May Not Be Enough.

The diligence items that are also immigration evidence

• The lease. Assignable? Does the landlord consent? A business you cannot occupy is not real and operating.
• Licenses and permits. § 41.51(b)(8) requires the enterprise to meet applicable legal requirements for doing business in the jurisdiction. A liquor license, a professional license, or a permit that does not transfer is an immigration problem as well as a business one.
• Three years of financials and tax returns. These carry the marginality showing.
• Employee census. Not because a number is required, but because payroll evidences a real operating enterprise and supports the significant-economic-contribution route past marginality.
• A valuation. The FAM benchmarks purchase price to fair market value. An arm’s-length price supported by a valuation is much easier to defend than a friendly one that is not.

Why we do both halves

The four terms above are decided in the purchase agreement, the financing commitment, and the entity documents. An immigration lawyer who reviews the petition after closing can tell you the case is weak. He cannot tell you which clause caused it, and he cannot renegotiate a signed deal. We draft and negotiate the transaction alongside the petition, which is the whole reason to keep them in one office.

Immigration is federal. The purchase agreement, the entity, and the governance are governed by the law of the state of organization. We are licensed in Texas and Illinois. Elsewhere we work alongside local counsel.

Send us the letter of intent before you sign it. The financing structure and the asset-versus-stock decision are worth more to your petition than anything we can do afterward. Call or text 512.761.8479.

Read next: Franchises and the E-2 Visa · When Your Investment Is a Security · How Much Do You Have to Invest

The road most owners never hear about

An owner came to me three years into a PERM. He had run the recruitment, survived an audit, and was waiting on a certification that would then need an I-140 and an I-485 behind it. He also still owned forty percent of the manufacturing company in Lisbon that he had left his brother to run, and that company had been supplying his Texas entity since it opened.

EB-1C requires no labor certification at all. He had qualified for it the entire time, and nobody had asked about Lisbon.

EB-1C, multinational manager or executive. If you still own or work for an operating company abroad and the U.S. entity has been doing business for at least a year, EB-1C requires no labor certification and is not subject to the bona fide job opportunity analysis below. For a treaty investor who kept the foreign company running, it is frequently the fastest route available, and it turns on a fact most intake conversations never reach.

EB-2 with a national interest waiver. NIW is a self-petition: no job offer, no PERM, no ability-to-pay test. For an owner whose entire problem is that the employer is himself, that structure is worth pricing before spending two years proving the job is open to U.S. workers. The standard tightened considerably after a January 2025 policy update and reported approval rates have fallen sharply, so it is not a free pass. It is a different set of obstacles, and often a better-matched set.

Why the PERM road is hard for an owner

Neither EB-3 nor standard EB-2 permits self-petition. Both require a bona fide job offer and an approved labor certification. Your company has to act as a genuine employer of you, and that triggers separate scrutiny at the Department of Labor and at USCIS.

At the Department of Labor

20 C.F.R. § 656.17(l) applies where the employer is a closely held corporation or partnership in which the sponsored worker has an ownership interest, where there is a familial relationship between the worker and the stockholders, officers, incorporators, or partners, or where the worker is one of a small number of employees. Read that list again. A typical treaty business satisfies all three.

Where it applies, the employer must be able to demonstrate a bona fide job opportunity, meaning the job is genuinely available to U.S. workers, and to document the formation papers, the officers and shareholders and their relationships to the worker, the company’s finances, and who actually holds hiring authority.

The governing BALCA authority is more encouraging than the regulation sounds. In Modular Container Systems, 1989-INA-228, decided en banc on July 16, 1991, the Board adopted a totality-of-the-circumstances test. Ownership is not a categorical bar, and certification can issue where the employer shows genuine independence and vitality not dependent on the worker’s financial contribution.

Decided the same day, Malone & Associates, 1990-INA-360, denied certification where the firm was founded and wholly owned by the sponsored worker and bore his name.

Two cases, one Board, one day, opposite results. And the losing one is the ordinary treaty-investor fact pattern: sole owner, small headcount, company named for the founder. If your business card and the company’s name are the same word, start from Malone and work back.

Practically, the owner should not conduct the recruitment or review the résumés, the job requirements must not be tailored to the owner’s own background, which is what sank Malone, and the recruitment has to be run in good faith with a real willingness to hire a qualified U.S. worker.

At USCIS

8 C.F.R. § 204.5(g)(2) requires the petitioner to establish a continuing ability to pay the offered wage from the priority date until the worker becomes a permanent resident, evidenced by annual reports, federal tax returns, or audited financial statements. Employers with 100 or more employees may substitute a financial officer’s statement, which almost no treaty business can use.

A totality analysis is available for a company reinvesting instead of showing profit, but it has to be documented with funding sources, growth trajectory, and profit potential. Young, thinly capitalized businesses are precisely the profile that fails a straight net-income test.

And the clock

As of August 7, 2026, DOL was reviewing PERM applications filed in September 2025, with an average analyst review time of about 372 calendar days. Prevailing wage determinations stood at April 2026 receipts for OEWS-based requests.

Add the mandatory recruitment and the quiet period, then the I-140, then the I-485. That is roughly two to two and a half years before you can even file for adjustment, and the priority date wait has not started. The monthly figures move. The length of the sequence does not.

A proposed DOL rule published March 27, 2026 would also raise prevailing wage levels substantially, moving the first level from roughly the 17th to the 34th percentile. It is proposed, not final. If it is finalized, it lands hardest on the small business already facing an ability-to-pay question.

Before you start, read the other half

Whichever road you take, an E-2 holder faces two structural problems in the transition that have nothing to do with the category: the renewal interview and international travel. See Three Things That Undo an E-2 Family’s Green Card Plan.

If you have held E-2 for three or more years, a thirty-minute call can tell you which of the three roads your facts support. Bring the foreign company, if there still is one. Call or text 512.761.8479.

Read next: Three Things That Undo an E-2 Family’s Green Card Plan · E-2 vs. EB-5

The rule, and the sentence people miss

9 FAM 402.13 says an O-1 beneficiary may not self-petition, and then says in the same breath that a separate legal entity owned by the O-1 beneficiary may be eligible to file a petition on behalf of the beneficiary.

USCIS said the same thing in Policy Alert PA-2025-02, issued January 8, 2025, which updated Volume 2, Part M of the Policy Manual to explain that “a separate legal entity owned by the beneficiary, such as a corporation or limited liability company, may file a petition on the beneficiary’s behalf.”

So a founder is not locked out. A founder is required to build something.

What the petitioning entity has to look like

The entity must be genuinely separate from you, with someone other than you holding real authority over the employment relationship: a board, officers, or investors who can hire, fire, and set terms. You cannot be the sole decision-maker over your own employment and still describe the company as your employer.

One caution. I am not aware of any authority setting a specific ownership percentage for this purpose, and anyone quoting you a number is telling you something the law does not say. What the law imposes is a requirement about control.

If your evidence file predates 2025, rebuild it

The January 8, 2025 update added evidence types for beneficiaries working in critical and emerging technologies, examples of evidence an interested U.S. government agency might submit, and an example of what counts as an occupational change within a technical field. A file assembled before that update was built against a narrower set of examples than USCIS now publishes. If yours is older, it is worth revisiting before you refile.

Two mechanics that trip up founders

Agent as petitioner. Available for beneficiaries who are traditionally self-employed or who work short engagements for numerous employers, and an agent may file one petition covering multiple employers where each authorizes it. A real option for consultants and creatives. A poor fit for someone running one operating company.

The consultation. A written advisory opinion from an appropriate peer group, labor organization, or management organization. It is advisory, not binding on USCIS, and it may be obtained by the agency or waived where no appropriate peer group exists. Founders in emerging fields often assume that no peer group means no petition. It does not.

Where this collides with E-2, and how to fix it

E-2 and O-1 pull in opposite directions on the same document.

Those are not irreconcilable, and the reconciliation is a governance problem, not an ownership problem. Treaty nationals can keep fifty percent or more of the equity, so long as the governing documents put authority over your employment somewhere else. Hiring, firing, compensation, terms: a board or an officer other than you has to hold those powers, and has to actually use them. What breaks is the arrangement that exists only on paper.

I had a founder bring me a beautifully drafted operating agreement last spring. Treaty nationality was clean at sixty percent. The agreement also made him sole manager with exclusive authority over all employment matters, including his own. The E-2 was fine. The O-1 petition from his own company was not, and fixing it meant amending the agreement, documenting a board, and waiting for the amendment to be more than three weeks old. That is a cheap problem before signature and an expensive one after.

Immigration is federal, but the entity, its governing documents, and the authority you vest in a board or officer are governed by the law of the state where the company is organized. This firm is licensed in Texas and Illinois. Elsewhere we work alongside local corporate counsel.

Decide which visa the entity is being built for before you sign the operating agreement, or build it deliberately for both. Call or text 512.761.8479.

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I advise both employers and employees in Texas and Illinois, and nothing illustrates the difference between the two states like the non-compete agreement. The identical paragraph, signed by identical employees, can be fully enforceable in Austin and void from day one in Chicago. This is employment law where the state line does real work, and it is a comparison I have drawn in my Justia answers as well.

Texas treats non-competes as enforceable when they are ancillary to an otherwise enforceable agreement and reasonable in time, geography, and scope of activity. Texas courts can even reform an overbroad covenant down to something reasonable rather than throwing it out, which gives employers a meaningful safety net for imperfect drafting.

Illinois went the other direction with its Freedom to Work Act. As of this writing, a non-compete is void for employees earning below a statutory salary threshold in the neighborhood of seventy-five thousand dollars a year (with a lower threshold, around forty-five thousand dollars, for customer and employee non-solicitation covenants), and both figures are scheduled to step up over time. Illinois also requires advance notice of at least fourteen days with a written advisory to consult counsel, and it demands adequate consideration, which courts have generally read to mean roughly two years of continued employment or some other real benefit. Miss any of those marks and the covenant fails regardless of how reasonable its terms look.

The practical lessons: a multi-state employer cannot use one template for both states; remote work muddies which state’s law applies in the first place; and a choice-of-law clause naming the friendlier state does not reliably save a covenant against an employee protected by the stricter one. Review the covenant under the law that will actually govern it, before anyone signs.

Whether you are asking employees to sign a covenant or being asked to sign one, have it reviewed under the law that will actually govern it. Call or text 512.761.8479.

There is no universally correct entity, only the right entity for your liability exposure, tax situation, number of owners, and plans for growth or investment. Texas LLCs, including series LLCs, are popular for good reason: they separate operational risk from ownership and offer real flexibility. But they are not always the best fit, and a lawyer who defaults every client to the same structure is not doing the analysis.

Whatever entity you choose, the documents behind it matter more than the certificate. The pattern is depressingly common: co-owners operate for years with no operating agreement, a falling-out arrives, and one member freezes another’s expenses and payments with no written rulebook for anyone to point to. A well-drafted operating agreement, partnership agreement, or set of bylaws prevents far more expensive disputes later.

The same goes for the contracts your business runs on: service and vendor agreements, purchase agreements, leases. Because my background includes commercial litigation, I draft with an eye toward how a clause performs in a dispute, and I can litigate business conflicts when they cannot be avoided: contract disputes, ownership and partnership conflicts, and related commercial matters. I also coordinate business work with my immigration and estate practices when an owner’s needs cross into those areas, as they often do.

Choosing an entity is a decision about your risks, your taxes, and your plans, not a form to download. Call or text 512.761.8479 to talk through yours.

It is one of the most common misunderstandings in small business: “I registered my LLC with the state, so the name is mine.” Registering an entity name and owning a trademark are two different things. The “LLC” designation identifies your legal entity; it does not by itself give you brand protection or the exclusive right to a product name.

Federal trademark law asks a different question entirely: would a consumer in the marketplace be confused about the source of the goods? Names do not have to be identical to conflict. If the dominant element of your mark matches an existing registration in the same category of goods or services, the trademark office will likely see them as confusingly similar, no matter what your state filing says. I have sat across the desk from many owners who built a brand with sweat equity only to find a paper trademark standing in their way.

Before you build a brand (signage, packaging, a website, advertising), check that the name does not conflict with someone else’s mark and consider whether the name itself can be protected. I help clients think through the entity and the branding together, so the name on the storefront is a name you can keep.

Before you invest in signage, packaging, and a website, make sure the name is one you can keep. Call or text 512.761.8479.