U.S. immigration law requires applicants to demonstrate their ability to develop and direct the enterprise they are investing in when applying for an E-2 Treaty Investor Visa. This requirement is rooted in 9 FAM 402.9-6(F) and focuses on ownership, control, and managerial authority. In this blog, we’ll break down the key elements of this regulation and explain how applicants can meet its requirements.
1. Ownership Requirement: At Least 50% Control by Treaty Nationals
Applicants must prove that nationals of a treaty country own at least 50% of the enterprise. This ensures the enterprise qualifies as a treaty enterprise under U.S. immigration law. Ownership can be established in various structures, such as sole proprietorships, partnerships, or corporations.
2. Controlling Interest in Joint Ventures or Partnerships
In a joint venture or equal partnership, control is typically shared between two parties, each retaining full management rights and responsibilities. This is often referred to as “negative control,” where each party can make binding decisions.
Key Points to Note:
- Two-Party Partnership: Equal ownership grants control if both partners have management rights.
- More than Two Partners: Equal ownership among multiple partners does not provide any individual with control.
Example: If three individuals own equal shares in a business, no single partner can claim control.
3. Demonstrating Development and Direction of the Enterprise
Whether the investor is a sole proprietor or a majority owner, they must personally demonstrate their ability to develop and direct the enterprise.
Scenarios to Consider:
- Sole Proprietor or Majority Owner:
If an individual is applying for an E-2 visa or sponsoring an employee under the visa, they must prove active involvement in the day-to-day management and strategic direction of the business. - Foreign Corporation Ownership:
If a foreign corporation owns at least 50% of a U.S. enterprise, it must show it has the capability to manage and direct the enterprise, even if it’s done remotely.
4. Visa Holder Must Be an Employee of the U.S. Enterprise
In cases where ownership is distributed among several treaty nationals, the applicant must prove the following:
- The collective ownership of the enterprise meets the 50% threshold.
- The group of owners, as a whole, has the ability to develop and direct the enterprise.
Important Restriction:
The individual visa applicant cannot claim E-2 status as an “investor” if no single owner controls the business. Instead:
- E-2 visas are reserved for employees of the U.S. enterprise in executive, supervisory, or specialized skill roles.
5. Modern Business Practices and Managerial Control
Business structures today can vary widely. While a joint venture or two-party partnership may meet control requirements, managerial control in other structures may also satisfy the regulations. For instance:
- If an investor oversees business operations, makes significant managerial decisions, and steers the enterprise toward success, they fulfill the development and direction criteria.
Tip: The investor must provide evidence, such as contracts, meeting minutes, or an operational plan, to prove their role in management.
Practical Tips for E-2 Visa Applicants
To ensure your application aligns with the requirements of 9 FAM 402.9-6(F):
- Prove Ownership: Clearly document that treaty nationals own at least 50% of the enterprise.
- Demonstrate Control: Provide evidence of your role in managerial or operational decisions.
- Clarify Employment Role: Ensure that the applicant’s duties align with the E-2 visa’s criteria for executives, supervisors, or skilled employees.
- Document Partnership Agreements: For joint ventures include agreements showing shared control and responsibilities.
Frequently Asked Questions
What is “Negative Control” in a partnership?
Negative control exists when two equal partners in a joint venture have shared management rights, allowing them to make decisions binding on each other.
Can I qualify for an E-2 visa with multiple equal partners in ownership?
No, if ownership is distributed equally among more than two partners, no single partner can claim sufficient control.
Do I need to be physically present in the U.S. to develop and direct the business?
Not necessarily. Remote management is acceptable if you can demonstrate active involvement in the enterprise’s strategic and operational decisions.
Conclusion
Meeting the requirements of 9 FAM 402.9-6(F) is essential for E-2 Treaty Investor Visa applicants. You can strengthen your visa application by establishing ownership, demonstrating control, and proving active management. Need assistance? Contact an experienced immigration attorney to guide you through the E-2 visa process and ensure your application meets all legal requirements.
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If you have questions about the E-2 Investor visa, we invite you to contact our team at Richards and Jurusik for detailed guidance and assistance. We aim to provide the most accurate and up-to-date information to make your immigration process smoother and less stressful. The immigration lawyers at Richards and Jurusik have decades of experience helping people work and live in the United States. Please read some of our hundreds of 5-star client reviews! Contact us today to assess your legal 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)
