IN THIS GUIDE · A United States business operating under a sublicence of a Canadian company's brand: enforceable rights, related-party terms and real operating activity
Start with the E-2 eligibility and application overview
Put the licence chain on paper
Identify the owner of the mark, the licensor, and every intermediate agreement, then confirm the United States entity's rights are written down and enforceable in the territory where it will trade. A verbal understanding between related companies is difficult to evaluate. Record the term, territory, exclusivity, royalty, quality-control obligations, and termination rights. Where a Canadian agreement conflicts with the United States sublicence, counsel resolves that before filing.
Document the related-party terms
Because the parties are related, the terms invite scrutiny. E-2 turns on the nationality of the investor and at least fifty percent ownership of the enterprise by treaty nationals, so map who owns the United States company and who owns the Canadian licensor. Document actual royalty rates, service charges, loans and the authority for each agreement. Related-party status does not dispense with explaining the commercial arrangement, and required approvals depend on the actual structure.
Describe what the U.S. business actually does
A licence is a right, not a business. The enterprise must be a real, active, operating commercial undertaking rather than a holding shell for the brand. Describe the premises, staff or contractors, supply arrangements, customers and revenue plan. Credible prelaunch commitments can matter; first sales are not universally required. Owning the company does not by itself authorize the investor to perform work in the United States.
Value the capital and test non-marginality
Then value the investment itself. Money paid for the licence, fit-out, inventory, deposits and payroll may form part of substantial capital when it is committed and at risk relative to the cost of this enterprise. There is no universal minimum figure and no ten-job rule. Non-marginality can rest on present or future capacity beyond minimal living for the family, or on significant economic contribution. The investor must decide whether to release or restructure a payment whose refund right leaves the money under the investor's unrestricted control. A dated commitment ledger should distinguish money spent on the business, money held subject to a real contractual obligation, and ordinary personal reserves. Pair it with invoices, bank transfers, signed contracts and proof of what the enterprise still needs to open. That sequence makes it possible to assess proportionality against the actual cost, rather than against an arbitrary dollar figure.
Stages the enterprise must reach before the investor files
Borrowed funds can count as investment when the investor is personally liable and the loan is not secured by the assets of the enterprise being bought.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.