The Nine E-2 Requirements, and the Two Myths That Are Not Among Them

Short answer. Nine things have to be true, and the two rules most people believe are not on the list: there is no minimum investment amount, and there is no required number of employees.

Here are the nine.

1. You are a national of a treaty country.
2. The business is at least fifty percent owned by treaty-country nationals.
3. You have invested, or are actively investing, capital that is genuinely at risk.
4. That capital is irrevocably committed.
5. The business is real and operating, not a shell.
6. The investment is substantial in proportion to what the business costs.
7. The business is not marginal.
8. You are coming to develop and direct it.
9. You intend to depart when E-2 status ends.

The rest of this post takes them one at a time.

The regulation, in one paragraph

22 C.F.R. § 41.51(b)(1) states the test:

An alien is classifiable as a nonimmigrant treaty investor (E-2) if the consular officer is satisfied that the alien qualifies under the provisions of INA 101(a)(15)(E)(ii) and that the alien: (i) Has invested or is actively in the process of investing a substantial amount of capital in bona fide enterprise in the United States, as distinct from a relatively small amount of capital in a marginal enterprise solely for the purpose of earning a living; and (ii) Is seeking entry solely to develop and direct the enterprise; and (iii) Intends to depart from the United States upon the termination of E-2 status.

Each defined term in that sentence has a section below.

Nationality, twice over

Yours. You must hold the nationality of a country with a qualifying treaty. Dual nationals may generally apply on the treaty nationality. A passport acquired through a citizenship-by-investment program carries a three-year prior-domicile requirement for a first-time E applicant. See Five Reasons Your Treaty Passport May Not Be Enough.

The company’s. At least fifty percent must be owned by treaty-country nationals who are not U.S. lawful permanent residents, and who are maintaining E status if they are in the United States.

What counts as “invested”

22 C.F.R. § 41.51(b)(7) defines investment as placing capital at risk in the commercial sense with the objective of generating a profit. Three requirements follow, and each of them fails cases.

Possession and control. You must be in possession of and have control over the capital.

Subject to loss. The capital must be subject to partial or total loss if investment fortunes reverse. Which is why where the money came from matters so much:

Such investment capital must be the investor’s unsecured personal business capital or capital secured by personal assets.

A conventional SBA 7(a) acquisition loan is typically secured in part by business assets. That will cost you most of your numerator.

Irrevocably committed. Funds must be committed, and the commitment must be real and irrevocable. Sitting in a bank account is not enough. Signing contracts that could be broken is not enough. The Foreign Affairs Manual is blunt: mere intent to invest, uncommitted funds, or prospective arrangements entailing no present commitment will not suffice. It does bless the obvious solution, an escrow conditioned on visa issuance, which can still qualify as irrevocable.

What else counts. Equipment and inventory on hand. Goods and machinery shipped to the United States for business use. Intangible and intellectual property to the extent value is reasonably determinable. Leases and rents count only in a limited amount, generally the funds devoted to that item in a given month, so a ten-year lease does not contribute ten years of rent to your total.

“Bona fide enterprise” includes your business license

22 C.F.R. § 41.51(b)(8):

The enterprise must be a real and active commercial or entrepreneurial undertaking, producing some service or commodity for profit and must meet applicable legal requirements for doing business in the particular jurisdiction in the United States.

Read the last clause. Licenses, registrations, permits, and the local requirements for your particular business are part of the immigration test, not a separate errand for later.

I once had a case where everything else was clean. The money was traced, the lease was signed, the equipment was on the floor, and the county had not transferred the food service permit to the new entity because the application listed the wrong owner name. The business was not legally operating, so on the day of the interview it was not a bona fide enterprise, whatever the bank statements showed. The permit took nine days. The visa took another four months.

“Substantial” is a ratio, not a number

There is no minimum dollar figure. The test is proportional, on what the Foreign Affairs Manual describes as an inverted sliding scale: the lower the cost of the business, the higher the percentage of it your investment has to represent. That question has its own post: How Much Do You Have to Invest for an E-2 Visa?

“Not marginal” has two escape routes, and most summaries mention one

22 C.F.R. § 41.51(b)(10):

A marginal enterprise is an enterprise that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. An enterprise that does not have the capacity to generate such income but that has a present or future capacity to make a significant economic contribution is not a marginal enterprise. The projected future capacity should generally be realizable within five years from the date the alien commences normal business activity of the enterprise.

Read the second sentence. It is a separate route, not a restatement of the first. A business that will not support your family on its profits can still be non-marginal if it makes a significant economic contribution, and job creation is the usual proof.

There is no required number of employees anywhere in the regulation.

“Develop and direct” is about control

22 C.F.R. § 41.51(b)(11):

The business or individual treaty investor does or will develop and direct the enterprise by controlling the enterprise through ownership of at least 50% of the business, by possessing operational control through a managerial position or other corporate device, or by other means.

Ownership of half is one way. Documented operational control is another.

What you get, and for how long

Time in the United States. Initial admission is not more than two years under 8 C.F.R. § 214.2(e)(19)(i). Extensions come in increments of not more than two years under § 214.2(e)(20), and the regulation specifies no cap on the number of them, subject to § 214.2(e)(5) and the presumption at § 214.2(e)(22)(ii). Each new admission on a valid visa starts its own two-year period, which is why many E-2 holders never file an extension.

The visa itself is a separate thing. How long the visa is valid, and how many times you can use it to seek admission, is set by the reciprocity schedule for your nationality. It is often much shorter than your period of stay, and it varies enormously by country.

Your spouse can work. Employment is authorized incident to status since January 30, 2022, evidenced by an I-94 annotated E-2S. No I-765 is required.

Your children can stay until twenty-one. They are admitted for the principal’s period of stay, annotated E-2Y, and are not employment authorized. At twenty-one they age out, and the Child Status Protection Act does not help, because it does not reach nonimmigrant status. See Three Things That Undo an E-2 Family’s Green Card Plan.

The two questions this post does not answer

How much money, and what kind of business. Those decide whether you have a case. They are in How Much Do You Have to Invest and Buying an Existing Business on an E-2.

The cheapest hour in an E-2 case is the one before you form the company. Send us your nationality, the type of business, and roughly what you plan to commit. Call or text 512.761.8479.

Read next: How Much Do You Have to Invest for an E-2 Visa? · E-2 vs. EB-5