IN THIS GUIDE · Evidencing a related-party asset purchase by a new United States company
Start with the E-2 eligibility and application overview
Identify the enterprise and the ownership chain
For this example involving a Canadian citizen, the U.S. company must have the relevant treaty nationality and the investor must be able to develop and direct it. Trace owners through share records and holding structures to individual nationalities. Canadian residence is insufficient; if another citizenship is relied on, verify its treaty and applicable rules instead of assuming Canadian citizenship is mandatory. Where a holding company or a trust sits above the operating company, follow the chain to the individuals and record the citizenship evidence for each. Dual nationals should be identified as such, since the nationality relied on has to be stated rather than inferred. Keep the share register current as well: a transfer agreed but never entered in the register is a common and avoidable discrepancy between what the file says and what the corporate records show.
Show corporate authority on both sides
A related-party sale still needs proper approval. Keep director or shareholder resolutions from the Canadian seller authorizing the disposal, resolutions of the U.S. buyer approving the purchase and the price, the asset purchase agreement, bills of sale, and assignments for contracts, licences or intellectual property. Note any consents required from lenders, landlords or franchisors. Conflicting obligations in existing agreements are for counsel to resolve on the actual documents. Hypothetical example: a stormwater bioretention design practice in Canada sells its survey instruments, its plan library and its client contracts to a newly formed United States company owned by the same two people. The same two signatures then appear on both sides of the agreement, which is permissible but makes the resolutions more important rather than less, because they show that each company considered and approved the transaction as a company. Date them before the agreement rather than after it.
Support the valuation with independent evidence
Because the parties are related, the price should be explained rather than asserted. Depending on the assets, that may mean appraisals, dealer quotations, depreciation schedules, book values from financial statements, inventory counts, or a valuation report for intangibles. Keep the reasoning consistent with tax and accounting treatment on both sides of the border. A price set only by the investor's preference invites questions about the amount genuinely at risk. Where intangible assets form part of the transfer, say exactly what is being sold, whether a registered mark, a client list, drawings, a database or a method, and confirm that each item was owned by the seller and is capable of assignment. A client relationship, unlike a contract, generally cannot be sold outright, and valuing something the seller could not transfer is the sort of weakness that surfaces late. Have the accountant and counsel agree the description before the valuation is prepared.
Trace the money that pays for the assets
Assets moving between companies the investor controls do not by themselves show committed capital. Document how the U.S. company was capitalized, where those funds lawfully came from, and how payment reached the Canadian seller. If value is contributed rather than purchased, record the contribution and its accounting. The file should also show the U.S. company's operating spending and its capacity to support more than a minimal living. Non-marginality can also be demonstrated through a significant economic contribution. Keep the payment path visible end to end: the source account, the amount, the date, the receiving account, and the entry in each company's ledger. Where funds move in stages or through a foreign-exchange provider, keep the confirmations, since a wire arriving with an intermediary's reference and no explanation is a gap in the record. Where the investor lends money to the United States company instead of subscribing for shares, note the terms and raise the structure with counsel, because how the funding is characterized bears on what is at risk.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.