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TL;DR:
- E-2 visa applicants do not need a U.S. partner or corporation to qualify.
- The investor must be from a treaty country and control the business.
- A U.S. entity may be formed for business operations, but foreign ownership can remain 100%.
- Structuring the investment properly is critical for E-2 compliance.
- Legal guidance can help navigate ownership, control, and source-of-funds documentation.
The E-2 visa is a powerful option for investors from treaty countries seeking to direct and develop a business in the United States. It raises questions about ownership, control, and legal structure.
A common concern we hear is: “Do I need a U.S. partner or corporation to apply?” The answer is more nuanced than a simple yes or no, and we’ll explain why here.
What Does The E-2 Visa Require?
The E-2 visa, formally the E-2 Treaty Investor Visa, is based on a treaty of commerce between the United States and the investor’s country of nationality. It allows individuals to come to the U.S. to develop and direct a business in which they have made a substantial investment.
Core Legal Requirements For E-2 Eligibility
- The investor must be a national of a treaty country.
- The investor must be entering the U.S. to develop and direct the business.
- The investment must be substantial and placed at risk to generate a profit.
- The business must be a real and operating commercial enterprise.
- The investor must own at least 50% of the enterprise or have operational control through a managerial position or corporate structure.
- The business cannot be marginal, it must generate more than a minimal living for the investor and family.
Additional Control Criteria To Understand
“Develop and direct” isn’t just a formal phrase. It reflects the legal expectation that the investor is engaged in ongoing decisions and strategic leadership. Passive or silent partners generally don’t qualify.
U.S. immigration law prioritizes investor control, not the nationality of partners. What matters most is that the treaty investor actively leads a real, viable business with personal funds at risk.
Can You Own 100% Of The Business?
Yes. An E-2 investor may own 100% of the business entity in the U.S., as long as they meet all other visa criteria. It often surprises applicants who assume that U.S. immigration rules require some form of domestic participation.
In truth, E-2 law permits full foreign ownership as long as the treaty-national applicant maintains control of the business. They must also fulfill all the business and investment obligations.
Do You Need To Set Up A U.S. Corporation?
While you don’t need a U.S. partner, you typically do need a U.S. legal entity through which the business operates. It could be an LLC, corporation, or similar structure formed under state law.
| Entity Type | Description | E-2 Consideration |
|---|---|---|
| LLC (Limited Liability Company) | Flexible structure with pass-through taxation. | Most popular for small businesses. Foreigners can own 100%. |
| C-Corporation | Separate tax entity; pays corporate tax. | May be required for venture funding. Can be fully foreign-owned. |
| S-Corporation | Pass-through tax entity for U.S. citizens/residents only. | Not available for foreign investors. |
You don’t need an American co-owner, but you do need to form a U.S. entity for most business models. It ensures regulatory compliance and eases practical matters such as obtaining an EIN (Employer Identification Number), opening a business bank account, and signing leases.
What If You Do Have A U.S. Partner?
Having a U.S. partner is not a requirement, but it is allowed. If the business has multiple owners, the E-2 applicant must own at least 50% or demonstrate operational control.
Here are some sample ownership scenarios and their implications:
| Ownership Structure | E-2 Eligible? | Notes |
|---|---|---|
| 100% foreign investor | ✅ Yes | Meets E-2 rules if investor retains control. |
| 70% foreign / 30% U.S. partner | ✅ Yes | The investor holds the majority. |
| 50% foreign / 50% U.S. partner | ✅ Yes | Still eligible if both co-owners are active; the investor must play a directing role. |
| 40% foreign / 60% U.S. partner | ❌ No | The applicant lacks majority ownership or control. Not eligible. |
Ownership control can be demonstrated by voting rights, operational authority in the LLC’s operating agreement, or a corporate resolution naming the investor as managing member or director.
Where Does The Confusion Often Come From?
Many clients are understandably confused by informal advice or outdated assumptions about what the E-2 process requires. Misleading sources can create uncertainty, especially for first-time business investors.
Common Misunderstandings:
- “You need a U.S. citizen as co-owner.”
✘ Not true. A foreign investor may be the sole owner. - “You must set up the business before applying.”
✔ Partly true. The business should be far enough along: bank account funded, contracts signed, operations starting; to show it’s real and active. - “You need an immigration attorney to act as your U.S. partner.”
✘ Incorrect and potentially unethical. Legal counsel represents your interests, they don’t become shareholders.
Clarity comes from knowing the actual legal standards, not community myths. Having a U.S. partner is optional, not required. The important thing is investor control, not the origin of co-ownership.
How Vital Is Documentation?
E-2 cases are documentation-heavy, and success hinges on demonstrating that the investor meets ownership, control, and investment criteria. Getting this right can make or break your application.
Whether you apply through a consulate or change status inside the U.S., you must show:
- Formation of a qualifying U.S. entity.
- Legal proof of ownership and control.
- Business plan showing projected income, expenses, and job creation.
- Source-of-funds documentation (how you obtained your investment capital).
- Evidence that funds are irrevocably committed (“at risk”).
Strong E-2 cases rest on clear, consistent documents. Each file (from financials to formation papers) should show that the investor controls the business, funds are secure, and operations are underway.
What About Franchises?
Franchises are a popular vehicle for E-2 investments, and many involve U.S.-based parent companies. However, this does not make the U.S. company your “partner.” As the investor, you independently purchase franchise rights and operate your legal entity.
The same E-2 rules apply:
- You own the U.S. entity that runs the franchise.
- You control the business operations.
- You provide capital and direct involvement.
Legal Terms You May Encounter
To make sense of the E-2 application process, it’s helpful to understand some basic legal terms used by USCIS and consular officers:
| Term | Definition |
|---|---|
| Treaty Country | A country that has a commerce and navigation treaty with the U.S. allowing for E-2 eligibility. |
| Substantial Investment | An amount sufficient to ensure the successful operation of the business, relative to its type. |
| At Risk | The investor must commit personal funds that are subject to partial or total loss if the business fails. |
| Marginal Enterprise | A business that does not generate more than minimal income for the investor and dependents. |
| Develop & Direct | Actively involved in business management not a passive or silent partner. |
Strategic Considerations For E-2 Visa
Although the law doesn’t require a U.S. partner, some business models may benefit from one. For example, a local partner may help navigate state licensing rules, offer market knowledge, or open local networks. Just remember: from an immigration standpoint, control and treaty-national ownership must remain with the E-2 applicant.
For a full list of eligible treaty countries and official E-2 guidance, consult the U.S. Department of State. The most current legal and procedural updates are available there, although many applicants choose to work with an immigration attorney to manage the complexities.
Legal Support Makes A Strong Application
You do not need a U.S. partner or co-owner to apply for the E-2 visa. You do need a strong business structure, a qualifying nationality, and active control over the enterprise. Forming a U.S. entity, even one you own entirely, is part of what makes your application credible.
Some investors choose to bring in American partners for strategic or operational reasons. However, that’s a business decision, not a visa requirement. What matters most is that you, the treaty-national applicant, remain in charge.
If you’re unsure of the E-2 visa structure and documentation, Lozano Law Firm in San Antonio, Texas, can clarify the eligibility requirements. Let’s build a pathway that protects your investment and your future.