IN THIS GUIDE · Testing genuine development and direction when a management company would run the U.S. enterprise
Start with the E-2 eligibility and application overview
Map decision rights before signing the management agreement
List the decisions that will remain with the investor: pricing, budgets, hiring the manager, capital spending, contract approval, and the ability to replace the operator. A management agreement can delegate daily execution, but E-2 asks whether the applicant genuinely develops and directs the enterprise rather than collecting passive returns. Read the draft agreement for terms that transfer those decisions permanently, and have counsel review any clause that limits removal of the manager. Hypothetical example: a genomics sequencing laboratory is to be run day to day by an operator, and the draft agreement gives that operator a three-year term terminable only for cause. That single clause moves the power to replace the manager out of the investor’s hands for three years, which is exactly the point the file has to address. Ask for the termination, renewal and reserved-matters clauses in their executed form before anyone summarises the arrangement.
Confirm nationality and the ownership that carries it
Treaty eligibility follows citizenship, not Canadian residence, so record each owner's citizenship and each holder of the equity. Canada is a treaty country; at least 50 percent of the enterprise must be owned by treaty nationals of the same country, and the applicant must hold the required nationality. An equity stake taken by the management company affects the ownership analysis. Review an unexercised option for its actual terms and prospective effect rather than assuming it has already changed the shares held. Record citizenship from the document that proves it, not from a description of where someone lives or holds status. Where a holding company sits between the individual and the enterprise, the nationality analysis follows the individuals who ultimately own it, so the chain has to be written out to its end.
Show capital that is committed and at risk
Substantial capital is measured against the cost of the particular enterprise, not against a fixed universal minimum. Funds must be irrevocably committed and exposed to loss, so review escrow terms, refund rights and revocation conditions on their actual facts rather than assuming any deposit qualifies. Loans are not banned, but collateral matters: financing secured by the enterprise's own assets is treated differently from borrowing secured by the investor's personal property. Keep a running schedule of the funds: date, amount, account of origin, account received, and the document that evidences each step. Gaps discovered while the accounts are still open are easy to close; the same gaps discovered a year after an account has been shut are not.
Test whether the enterprise does more than support the family
Non-marginality can rest on present or future capacity to generate more than a minimal living for the investor and family, or on a significant economic contribution. There is no ten-job rule. Build the projection from the management company's staffing plan, contracts and cost structure. A prelaunch enterprise can qualify where commitments are credible, so document leases, purchase orders and licences rather than waiting for the first sale. Where projections are used, say what each figure assumes and which signed document supports it, since a projection resting on an unsigned letter of intent is an intention rather than a commitment. Keep the original projections in the file beside any revision, with the reason for the change, so the sequence remains readable later.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.