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KIRKLAND · E-2 FIELD GUIDE

When does a product license support an active E-2 business?

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THE DIRECT ANSWER

It can support the case when the rights are part of a real U.S. commercial operation that the investor develops and directs. The license alone is not the enterprise. Explain the company’s own work, committed resources, customers and revenue model rather than relying on the reputation of the product owner. The failure to watch for is a structure that looks active on paper and passive in the contracts. Where a third party sources, sells, ships and collects while the investor receives a share, the arrangement may operate as a return on capital rather than as an enterprise the investor develops and directs.

Distinguish selling a product from holding a passive right

Draw the flow from supplier to U.S. customer and identify decisions the investor controls at each stage. If another company performs all operations and merely sends a return, assess whether the proposed arrangement is actually passive.

Outsourcing particular functions is different; the question is whether the investor’s enterprise and directing role remain real. Test the description against the signatures. Ask who signs the supply agreement, whose employees answer a customer complaint, and who may change a price without seeking approval.

Where every answer names the other company, the sentence claiming the investor directs the enterprise is contradicted by the paperwork beneath it. Engaging a warehouse or a fulfilment provider is ordinary commerce and creates no such problem; a structure leaving the investor with only an economic interest does.