IN THIS GUIDE · Building an active U.S. enterprise around licensed product rights
Start with the E-2 eligibility and application overview
Describe what the U.S. company will do
Specify who finds customers, signs sales contracts, holds inventory, arranges delivery and handles returns. The company may rely on outside suppliers without becoming passive, but the investor must genuinely develop and direct the enterprise. A plan consisting only of receiving royalties from someone else’s work requires a different assessment from an active distribution operation.
Read the license as an operating constraint
Identify the licensed products, territory, term, renewal rights and performance conditions. Ask who may sell online or appoint subdistributors. These terms affect what revenue the business can realistically pursue. The commercial rights should match the sales plan; do not project an unrestricted national market when the agreement authorizes only a limited channel or territory.
Budget the operation beyond the licensing payment
A large rights payment does not remove the need for operating resources. Map inventory, order systems, warehousing, customer support and marketing against the actual business model. Review substantiality in relation to this enterprise’s cost and non-marginality through credible projections, including capacity beyond minimal family support or significant economic contribution. E-2 has no universal dollar or ten-job minimum.
Confirm ownership and funding before launch commitments
The investor and enterprise must satisfy the applicable treaty-nationality requirements; living in Quebec does not establish them. Trace the rights payment and other investment funds from lawful sources through transfers to the business. The arrangements must show genuine commitment and commercial risk. A proposed future payment or revocable reservation cannot be assumed to satisfy that assessment.
Where the licence and the business plan stop agreeing
Two documents built by different people at different moments rarely align on their own. A distribution agreement grants a defined territory and a single channel; a plan written months afterwards projects national coverage, an online storefront and subdistributors, because those are what make the projections work. The agreement is the harder document to argue with, so the plan is what gives way when the two are read together, and non-marginality rests on projections the plan must actually be able to support. Reconcile them before either is filed. Where a term is genuinely ambiguous, obtain written clarification from the licensor instead of resolving it favourably in a summary, since a summary that overstates a right contradicts the reviewer's own exhibit.
Describing the directing role without overstating it
An investor's role often gets written the way a promotional biography would be: visionary, strategic, responsible for growth. Such a description fails because nothing can be checked against it. The requirement is that the investor develop and direct the enterprise, which is shown through identifiable decisions, each traceable to a corporate record: who signs supply contracts, who sets pricing, who hires and dismisses, who holds the bank mandate. A modest and specific account supported by the minute book and the signing-authority resolution carries further than an expansive one supported by nothing. Where operational functions are contracted out, name what was contracted out and show which decisions stayed with the investor.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.