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Special Considerations for E-2 Investors with Business Partners

Business partners shaking hands

An E-2 visa is a great visa that allows foreign nationals of certain treaty countries to start or purchase a business in the U.S. and develop and direct that business. A common question we receive is whether a foreign national may have a business partner. It is possible for an E-2 visa applicant to have a business partner, however there are certain things to consider when a business partner is involved.

What percentage of the company will each partner own?

One important requirement is that the E-2 investor must own at least 50% of the company. If an E-2 investor has a business partner, they must be okay with an arrangement where the E-2 investor owns at least 50% (or more) of the company. Additionally, even after the E-2 visa is granted, the E-2 investor must maintain at least 50% ownership of the company. If the business partner is also applying for an E-2 investor visa, the business must be owned 50/50.

Does the company intend to raise capital?

As described above, the E-2 investor must own 50% of the company and must maintain this ownership. If the company plans to raise capital through the sale of shares, the E-2 investor and business partner must plan for this to ensure that the E-2 investor continues to own 50% of the company and/or maintains operational control.

How much money will each partner invest?

The E-2 investor must make a substantial investment. Even if the business partner is contributing funds, the focus will be on the investment that is made by the E-2 applicant and that investment must be substantial in its own right, separate from any investment made by the business partner.

Will the business partner be active or passive? What role will the business partner play in the company?

The E-2 investor and business partner should have distinct roles within the company and it must be shown that the E-2 investor will have the ability to develop and direct the business. If the business partner will be an active participant in the business, the E-2 application should specify which roles the E-2 investor and business partner will each hold (for example CEO and CFO).

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