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WESTMOUNT · E-2 FIELD GUIDE

Does an E-2 business have to replace contractors with ten employees?

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THE DIRECT ANSWER

No universal ten-employee rule applies to E-2. Review whether the actual business meets non-marginality and other eligibility requirements, and whether its labor arrangements are lawfully classified. Replacing labels or adding unsupported hires to imitate an EB-5 job formula does not establish a stronger E-2 case.

Explain capacity using the business’s own operating model

Describe the work purchased from outside providers, the work retained inside the company and the resources that support continued operations. Show realistic revenue and costs or the relevant significant economic contribution. The evidence should address the actual enterprise, rather than declare contractor use automatically acceptable or automatically disqualifying.

Explain the present enterprise ownership and the steps still needed for the proposed acquisition. A buyer who repeats the seller's operating model is hard to distinguish from the seller's results. Marginality is answered by the operating business itself, through payroll, contracts and financial statements, supported by a forward plan. Canadian permanent residence does not establish Canadian nationality for this purpose, and a share percentage should always be read together with the real control arrangements. E-2 requires treaty nationality for the investor and qualifying ownership of the enterprise, capital that is substantial for the particular business, irrevocably committed and at risk, plus a real non-marginal operation.