IN THIS GUIDE · Keeping control of a treaty enterprise when the seller stays in the business
Start with the E-2 eligibility and application overview
Read the operating agreement for who actually decides
Ownership percentages are the headline and rarely the whole answer. An officer reads the operating agreement for who hires and fires, who sets prices, who signs contracts above a threshold, who can incur debt and who controls the bank accounts. A fifty-five per cent owner whose management agreement hands all of that to a minority partner does not, in substance, direct the enterprise. The fix is structural rather than cosmetic: keep the management agreement for transition knowledge and customer introductions, and move decision authority to the buyer with defined reserved matters. Write the change into the agreement itself. A side letter promising that the buyer will really be in charge is worth very little against a signed document saying otherwise.
Nationality is traced through the owners
The enterprise must possess the treaty nationality of the investor, which is determined by the nationality of the persons who own at least half of it. Here the buyers are Canadian citizens holding fifty-five per cent, which works, but the calculation should be checked against how the shares are actually to be held. Placing the interest in a U.S. holding company, adding a U.S.-resident partner, or giving an American manager equity as an incentive can each move the ownership balance across the line. If the seller's forty-five per cent later grows through an earn-out, the nationality position changes with it, so the purchase agreement should be read for anything that can dilute the treaty owners after closing.
Marginality in a seasonal business
The enterprise cannot be marginal, meaning it must do more than provide a living for the investor and family, either through present income clearly exceeding that or through a capacity to make a real economic contribution within about five years. Tree service and land clearing are seasonal, so annual figures matter more than any single quarter, and a business plan built on peak months will be read sceptically. The useful evidence is three years of the company's own financial history, the existing payroll, contracted work for the coming season, and a hiring plan tied to specific revenue. Where the company already employs crews beyond the owner's household, that fact answers the question more convincingly than a projection does.
At risk means the money can be lost
Funds are at risk when they are irrevocably committed and could be lost if the business fails. Money in the buyers' own account earmarked for a purchase is not at risk, and neither is a deposit refundable at the buyer's option. Proceeds from the equipment auction should therefore move into the transaction, into purchased assets, or into an escrow whose release conditions are outside the buyers' control. The chain from the auction house's settlement statement through the bank account to the closing should be complete and documented. Where financing is used, personal liability that does not depend on the business assets can generally count, while a loan secured only by the assets being purchased generally cannot.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.