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FOR ENTREPRENEURS · LANTZVILLELantzville

Your ambition.Your enterprise.

Hypothetical example: Marnie runs a bookkeeping and payroll practice from Lantzville with two part-time staff. She has agreed to buy a small payroll bureau in Washington State that serves about forty employer clients, using savings and the proceeds of a term deposit. She is a Canadian citizen and will own the U.S. company outright. Nationality and control are therefore straightforward. The question that will decide her case is whether the enterprise is more than marginal — whether it will generate more than enough income to provide a minimal living for her and her family, or make a significant economic contribution — and that question is answered with projections and hiring, not with enthusiasm.

Talk about E-2
PurposeDevelop and direct a business
InvestmentSubstantial and at risk
Fixed minimumNo universal dollar threshold

IN THIS GUIDE · A service practice whose income might support only the owner's household

Start with the E-2 eligibility and application overview

01

Nationality and control are the easy half

Canada is a treaty country for E-2 purposes, and the requirement runs to both the investor and the ownership of the enterprise: at least half the enterprise must be owned by nationals of the treaty country, and the investor must be coming to develop and direct it. Sole ownership by a Canadian citizen satisfies both cleanly. Marnie should still document it properly — passport, share register or membership certificate, and the purchase agreement — because officers verify ownership rather than assume it. If she later brings in an investor from outside the treaty countries, the ownership percentage becomes something to watch rather than something settled.

02

Marginality is the test a small service business must pass

The enterprise must be a real, active and operating commercial undertaking, not a paper organization or a passive holding, and it must not be marginal. A marginal enterprise is one that does not have the present or future capacity to generate more than enough income to provide a minimal living for the investor and family. Capacity within a reasonable period, generally taken as around five years, can satisfy the requirement, but it has to be shown with something. For Marnie that means a projection built from the bureau's actual client list and billing history, a hiring plan with dates and salaries, and an explanation of how she will grow beyond replacing her own Canadian income. A purchase that simply relocates a one-person practice across the border, serving the same volume of work, is the classic marginal case.

03

Committed, at risk, and substantial relative to this business

The investment must be irrevocably committed and genuinely at risk, and it must be substantial in relation to the cost of the enterprise being purchased or established. There is no fixed dollar figure; a small service business is measured against what such a business costs, which is why the proportion invested matters more than the absolute number. Funds sitting in a refundable escrow that returns to the buyer if a visa is refused are usually not treated as at risk, so the transaction structure needs thought before signing. The file should trace the money from its lawful origin through each account to the seller, with statements rather than summaries.

04

What the classification does and does not give the family

An E-2 spouse is employment-authorized incident to status, which matters to household budgets. Children may study and may not work, and they cease to qualify as dependants at twenty-one. Two limits deserve emphasis. E-2 is a nonimmigrant classification with no direct path to permanent residence, so a family that wants a green card should treat that as a separate project with its own requirements. And the status depends on the enterprise continuing to qualify: if the business is sold, wound down or restructured so that treaty nationals no longer control it, the basis for the status changes.

05

Develop and direct means running it, not owning it

The requirement that the investor develop and direct the enterprise is a functional test, not merely an ownership one. Marnie should expect to show that she makes the operating decisions: pricing, hiring, client acceptance, systems, and the direction of the business. Where an owner intends to keep living in Canada and to leave a manager in charge, the case weakens, because the classification contemplates the investor being present to run the enterprise. If she plans to keep her Canadian practice running as well, she should be ready to explain honestly how her time will be divided and who holds authority in each business.

SOURCES FOR THIS GUIDE

Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.

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Guides for your next decision.

E-2 · LANTZVILLE

YOUR QUESTIONS.
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