An E-2 business must involve a bona fide operation that is not marginal in scope. The E-2 investor must be coming to the United States in order to developer and direct that operation.
A. Bona Fide Operation & Non-Marginality
The business in which the client-investor is investing must be a genuine, for-profit business thatis of a large enough scale that it is not considered marginal.
The enterprise must be a real and active commercial or entrepreneurial undertaking, producing some service or commodity. If the investment relates to a new enterprise, then USCIS must be convinced that it will be a real and active commercial or entrepreneurial undertaking that will produce some service or commodity if the visa is issued. It cannot be a paper organization or an idle speculative investment held for potential appreciation in value, such as undeveloped land or stocks held by an investor without the intent to direct the enterprise. The investment must be a commercial enterprise, thus it must be for profit, eliminating non-profit organizations from consideration.
A marginal enterprise is an enterprise that does not have the present or future capacity togenerate enough income to provide more than 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 apresent 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 client- investor commences normal business activity of the enterprise.
B. Develop & Direct
The purpose of the E-2 visa is to allow the client-investor to develop and direct the operations of the U.S. business, which involves both the ownership structure and control of it.
In instances in which a sole proprietor or an individual who is a majority owner wishes to enter the United States as an “investor,” or send an employee to the United States as his and/or her personal employee, or as an employee of the U.S. enterprise, the owner must demonstrate that he or she personally develops and directs the enterprise. Likewise, if a foreign corporation owns at least 50 percent of a U.S. enterprise and wishes for its employee to enter the United States as an employee of the parent corporation or as an employee of the U.S. business, the foreigncorporation must demonstrate it develops and directs the U.S. enterprise.
An equal share of the investment in a joint venture or an equal partnership of two parties,generally gives controlling interest, if the joint venture and partner each retain full management rights and responsibilities. This arrangement is often called "Negative Control." With each of thetwo parties possessing equal responsibilities, they each have the capacity of making decisionsthat are binding on the other party. USCIS and the Department of State have determined, however, that an equal partnership with more than two partners would not give any of the parties control based on ownership, as the element of control would be too remote even under the negative control theory. As indicated, a joint venture or an equal partnership involving twoparties, could constitute control for E-2 purposes. However, modern business practices constantly introduce new business structures. Thus, it is difficult to list all the qualifying structures. If an investor (individual or business) has control of the business through managerial control, the requirement is met. The owner will have to satisfy you that the investor is developing and directing the business.
In all E-2 cases, it must be shown that nationals of a treaty country own at least 50 percent of an enterprise. It must also be shown, in accordance with INA 101(a)(15)(E)(ii), that a national (or nationals) of the treaty country, through ownership or by other means, develops and directs the activities of the enterprise. The type of enterprise being sought will determine how this requirement is applied.