The TN visa is one of the fastest and most popular work visas available to Canadian and Mexican professionals under the United States-Mexico-Canada Agreement (USMCA). It allows qualified professionals to work in the United States for a U.S. employer in an approved occupation. However, many TN professionals eventually reach a point where they want greater independence. Whether it is opening a consulting firm, launching a technology startup, buying an existing business, or investing in a franchise, entrepreneurship often becomes the next logical step. Unfortunately, the TN visa was not designed for self-employment. For many Canadian and Mexican entrepreneurs, the E-2 Treaty Investor visa provides a potential pathway to own and actively manage a business in the United States.
Why a TN Visa Is Not Designed for Business Owners
The TN visa is employer-specific. This generally means:
- You must work for the employer connected to your TN application or admission.
- You cannot simply begin working for yourself.
- You generally cannot actively operate your own business as your primary TN employment.
- A material change in employment may require a new TN application or approval.
Although a TN professional may hold a passive ownership interest in a business, actively managing and operating that business may conflict with the terms of TN status. Professionals who want to become entrepreneurs may need to consider another immigration option.
What Is an E-2 Treaty Investor Visa?
The E-2 visa allows nationals of qualifying treaty countries, including Canada and Mexico, to enter the United States to develop and direct a business in which they have invested a substantial amount of capital.
Unlike the TN visa, the E-2 classification is specifically designed for qualifying investors and business owners.
An E-2 investor may potentially:
- Start a new business
- Purchase an existing business
- Buy a franchise
- Expand an existing company
- Direct and manage day-to-day operations
Under E-2 status, the investor’s primary role in the United States is to develop and direct the qualifying business.
Who Can Transition From TN to E-2?
You may qualify for E-2 classification if you:
- Are a citizen of a qualifying treaty country, such as Canada or Mexico
- Have invested or are actively in the process of investing a substantial amount of capital
- Own at least 50% of the business or otherwise possess operational control
- Will develop and direct the enterprise
- Can demonstrate that the business is real, active, and operating or ready to begin operations
E-2 Eligibility Requirements
1. You Must Be a Treaty National
Only nationals of qualifying treaty countries may apply for E-2 classification. Both Canada and Mexico are qualifying treaty countries.
Permanent residence in Canada or Mexico is not enough. The applicant must hold citizenship in a qualifying treaty country.
2. You Must Make a Substantial Investment
There is no fixed minimum investment amount established by law. Instead, the investment is evaluated in proportion to the total cost of purchasing or establishing the business. The investment should be large enough to demonstrate the investor’s financial commitment and support the successful operation of the enterprise.
3. The Investment Must Be at Risk
The investment cannot simply remain in a personal or business bank account. The funds must generally be committed to the enterprise and subject to potential loss if the business fails.
Qualifying business expenditures may include:
- Equipment
- Inventory
- Office or commercial space
- Lease payments
- Marketing
- Employee salaries
- Business assets
- Technology
- Licensing fees
4. The Business Must Be Real and Operating
A paper company or speculative investment will generally not qualify. The enterprise must be a real and active commercial undertaking that produces goods or services.
Supporting evidence may include:
- Business formation documents
- Federal Employer Identification Number
- Business bank statements
- Lease agreements
- Customer or vendor contracts
- Business licenses
- Operating agreements
- Website and marketing materials
- Financial statements or projections
5. The Business Cannot Be Marginal
The business cannot exist solely to provide a minimal living for the investor and the investor’s family.
The enterprise should have the present or future capacity to:
- Generate income beyond a minimal living for the investor and family
- Create employment opportunities for U.S. workers
- Make a meaningful economic contribution
A detailed business plan may help demonstrate the company’s projected growth, revenue, and hiring plans.
6. You Must Develop and Direct the Business
The E-2 classification is intended for investors who actively develop and direct the enterprise. Passive investments generally do not qualify.
Can You Buy an Existing Business?
Yes. An E-2 investor may purchase an existing business.
An established business may already have:
- Customers
- Revenue
- Employees
- Financial records
- Business licenses
- Operating history
This evidence may help demonstrate that the business is real, active, and capable of supporting the investor’s E-2 application.
Can You Buy a Franchise?
Yes. A franchise may qualify for E-2 purposes when the investment and business satisfy the applicable requirements.
Franchises may offer:
- An established business model
- Brand recognition
- Training
- Operational support
- Existing financial information
Purchasing a franchise does not guarantee E-2 approval. The applicant must still prove that the investment and enterprise satisfy all E-2 requirements.
Step-by-Step Process to Transition From TN to E-2
Step 1: Choose the Business
Determine whether you will:
- Start a new company
- Purchase an existing business
- Invest in a franchise
Step 2: Form or Acquire the Business
This may include:
- Registering the company
- Obtaining an EIN
- Opening a business bank account
- Signing a lease
- Obtaining required licenses and permits
- Completing a business purchase agreement
Step 3: Commit the Investment Funds
The investor must place the funds at risk and commit them to the business. Keep clear records showing where the money came from and how it was spent.
Step 4: Prepare a Business Plan
A strong E-2 business plan may include:
- Executive summary
- Description of the business
- Market analysis
- Financial projections
- Revenue forecasts
- Hiring plans
- Organizational structure
- Marketing strategy
Step 5: Gather Supporting Documentation
Typical evidence may include:
- Passport and proof of nationality
- Business ownership documents
- Investment records
- Bank statements
- Evidence showing the lawful source of funds
- Business licenses
- Contracts and invoices
- Lease documents
- Tax records, if applicable
- Business plan and financial projections
Step 6: Apply for E-2 Classification or an E-2 Visa
Depending on the applicant’s circumstances, there are generally two possible filing methods:
- Apply for an E-2 visa through a U.S. embassy or consulate outside the United States
- Request a change of status to E-2 through USCIS while lawfully present in the United States
A USCIS change-of-status approval does not place an E-2 visa in the applicant’s passport. After international travel, the applicant will generally need to obtain an E-2 visa from a U.S. embassy or consulate before seeking readmission in E-2 status.
Can You Stay in the United States While the Application Is Pending?
A person who timely files a change-of-status request while maintaining valid TN status may generally remain in the United States while USCIS reviews the application. However, the applicant must continue complying with the terms of TN status until the E-2 change of status is approved. The applicant should not begin working for or actively operating the E-2 business before receiving the required authorization.
Leaving the United States while a change-of-status request is pending may affect the request.
Can Your Family Come With You?
An E-2 investor’s qualifying family members may include:
- A spouse
- Unmarried children under 21
Qualifying E spouses may be employment-authorized incident to their status. Dependent children may attend school but are not authorized to work solely based on E dependent status.
Can You Keep Your TN Job?
After changing from TN status to E-2 status, the investor’s work authorization is generally connected to developing and directing the E-2 enterprise.
The investor should not assume that E-2 status authorizes continued employment with the former TN employer. Continuing that employment may require separate work authorization or another appropriate immigration classification.
Common Mistakes to Avoid
- Failing to commit enough money to the business
- Leaving investment funds uncommitted in a bank account
- Submitting an incomplete or unrealistic business plan
- Failing to document the lawful source and path of the investment funds
- Choosing a business with little capacity for growth or job creation
- Beginning unauthorized work while still in TN status
- Failing to explain the company’s ownership and control structure
- Assuming that forming a company is enough to qualify
Is the E-2 Visa Permanent?
No. The E-2 visa is a nonimmigrant visa and does not provide permanent residence by itself.
E-2 status or visas may generally be extended or renewed while:
- The business remains active and operating
- The investor continues to develop and direct the enterprise
- The investment remains qualifying
- The business continues to satisfy the E-2 requirements
The E-2 visa does not provide a direct path to a Green Card, although an investor may later qualify for permanent residence through a separate immigration category.
Final Thoughts
For many Canadian and Mexican professionals, TN status offers an efficient way to work in the United States. However, professionals whose goals shift toward entrepreneurship and business ownership may find the E-2 Treaty Investor visa to be a more suitable option. Transitioning from TN to E-2 involves more than forming a company. The applicant must make a substantial investment, place the funds at risk, actively develop and direct the business, document the lawful source of the funds, and prove that the enterprise is real and not marginal.
Because every business and immigration situation is different, careful planning before investing or beginning business activities can help avoid immigration problems.
Schedule a Consultation With an Immigration Lawyer
Sources
- USCIS: E-2 Treaty Investors
- U.S. Department of State: Treaty Trader and Treaty Investor Visas
- USCIS: TN USMCA Professionals
We Can Help
If you have questions about TN or E-2 visas, contact Richards and Jurusik for guidance and assistance. Our attorneys are licensed in both the United States and Canada and have decades of experience helping individuals work, live, and travel across North America. Read some of our hundreds of five-star client reviews, or contact us today to discuss your immigration situation.
JEREMY L. RICHARDS is the founding partner of Richards and Jurusik and has dedicated his career to U.S. immigration law, with a specialized focus on assisting Canadian and Mexican citizens under the United States-Mexico-Canada Agreement (USMCA) to work and live in the United States. (Full Bio)
