Choosing between buying an existing U.S. business and starting a new one is one of the most important strategic decisions an E-2 investor will make — it affects risk, timing, evidence for the visa application, and long-term success in the United States.
Quick refresher: What an E-2 investor must show
An E-2 Investor Visa grants nonimmigrant status to nationals of treaty countries who make a substantial investment in a bona fide U.S. enterprise and will direct and develop that enterprise. Key elements adjudicators look for include:
- Treaty country citizenship — the investor must be a national of a country with an E treaty with the United States. See the U.S. Department of State for a list and background: travel.state.gov - Treaty Traders and Investors.
- Substantial investment — the investor must commit funds sufficient to establish or purchase and operate the business; there is no fixed dollar threshold but the investment must be proportional to the cost of the business and be enough to ensure its success.
- Funds at risk — the investment must be subject to loss; paper transactions, guaranteed returns, or purely passive investments generally do not qualify.
- Control of the enterprise — the investor must possess operational control, usually through majority ownership or by being in a managerial/operational position.
- Non-marginality — the enterprise must generate more than the investor’s own living (i.e., have capacity to contribute to the U.S. economy beyond providing the investor a minimal livelihood).
USCIS and consular officers assess the totality of circumstances when deciding whether these requirements are met, so the business structure and documentation matter as much as the business economics. For general business guidance, the U.S. Small Business Administration provides helpful resources: SBA - Buying an Existing Business.
Why the choice matters specifically for E-2 applications
Whether an investor buys an existing business or starts a new one affects how easily they can show the enterprise is operational, that funds are invested and at risk, and that the business will not be merely marginal. It also influences timing to visa application, complexity of documentation, and the types of risks (regulatory, financial, contractual) the investor must manage.
Buying an existing U.S. business: Advantages and pitfalls
Advantages
Buying an established business can make it easier to demonstrate a functioning enterprise, with tangible assets, employees, customer base, and revenue history — all of which help meet the real and operating enterprise and non-marginality standards.
- Faster operational status: An existing business is already running, which can shorten the time to file an E-2 application and reduce the need to show a speculative business plan.
- Historical financials: Tax returns, profit-and-loss statements, and bank records provide concrete evidence of the business’s viability and scale.
- Easier staffing and revenue evidence: Payroll, customer contracts, and vendor relationships can support the argument that the business has more-than-marginal impact.
- Potentially lower start-up uncertainty: Buying can reduce market-entry risk compared with building new brand awareness and operations from scratch.
Pitfalls and risks
Acquiring an existing enterprise carries its own legal and financial hazards. Sellers may not disclose liabilities, revenue may be declining, or assets may be overvalued.
- Hidden liabilities: Tax debts, litigation, or environmental issues can attach to the business and harm both operations and the immigration case.
- Seller relationships and customer concentration: A business might rely on the seller’s personal contacts; once the seller leaves, revenue could fall, undermining the investor’s immigration evidence.
- Valuation disputes: The purchase price must represent a real investment rather than an overinflated transaction designed solely to meet E-2 optics.
- Control questions: If the investor purchases less than a controlling interest, adjudicators may question whether the investor truly directs and develops the enterprise.
Due diligence checklist for buyers pursuing E-2
Thorough due diligence is essential. For E-2 purposes, in addition to standard commercial review, the investor should obtain:
- At least three years of tax returns and financial statements.
- Detailed asset lists and verifiable valuations.
- Full disclosure of liabilities, pending litigation, and environmental permits.
- Contracts with major customers, suppliers, and landlords (with review of assignability and change-of-control clauses).
- Employee lists, payroll records, and benefits obligations.
- Verification that the purchase funds can be traced to a treaty-country source and will be placed at risk.
Starting a new U.S. business: Advantages and pitfalls
Advantages
A new business offers flexibility in structuring operations and ownership to optimize E-2 compliance. It can showcase the investor’s active role from day one and avoid legacy problems associated with prior ownership.
- Tailored business model: The investor can design the business to fit the required investment level, staffing plan, and projected revenues that demonstrate non-marginality.
- Clear ownership and control: Starting fresh removes ambiguity about managerial control or transferability of contracts and permits.
- Clean asset base: No hidden liabilities from prior operations and easier documentation of funds used for start-up costs.
Pitfalls and risks
Starting a business typically requires a longer runway before meaningful revenues appear, which can make proving the enterprise’s viability harder at the time of the visa application.
- Longer time to show non-marginality: New ventures usually need time to scale, so the investor must demonstrate a credible plan and sufficient capital to survive the start-up phase.
- Higher early-stage risk: Market acceptance, customer acquisition, and team building are unpredictable.
- Greater emphasis on business plan and pro formas: Consular officers and USCIS will scrutinize projections, assumptions, and the investor’s ability to execute.
Start-up documentation checklist for E-2 applicants
When launching a new business, an E-2 application should include:
- A detailed business plan with market research, staffing timelines, and realistic financial projections.
- Evidence of committed funds and expenditures (escrow receipts, wire transfers, leases signed, equipment purchases).
- Licenses and permits showing the enterprise is authorized to operate.
- Contracts that demonstrate initial customers, suppliers, or partnerships where possible.
Key E-2 legal and evidentiary considerations that affect both choices
Certain legal factors influence whether buying or starting is the better route for an E-2 investor.
- Ownership and control: The investor must show the ability to direct the enterprise. Majority ownership is simpler, but operational control can suffice if clearly documented.
- Substantiality in context: The investment must be substantial relative to the business type and cost. A rule of thumb: low-cost, labor-intensive businesses often require proportionally more investment to rebut marginality concerns.
- Source and path of funds: Funds must be lawfully obtained and traceable to the investor’s treaty-country source. Gifts, loans, and corporate transfers are acceptable if properly documented; however, funds tied up in escrow or protected from risk can raise issues.
- Investment at risk: Passive investments, such as buying stocks or certain types of real estate programs, typically won’t meet the at-risk requirement unless the investor exercises operational control.
- Marginality and job creation: Although E-2 does not require a specific job-creation number, evidence that the enterprise produces economic impact beyond merely supporting the investor strengthens the case (payroll, hires, growth plans).
For legal definitions and regulatory context, the U.S. Department of State’s E visa materials and USCIS policy memos provide useful background; working with an experienced immigration attorney ensures these elements are properly addressed in the application.
Practical scenarios: Which option fits which investor?
Investor seeking steady cash flow and faster visa filing
If the investor prioritizes immediate revenue and a shorter runway to file for E-2, buying a profitable retail operation or service business with a strong track record can be attractive. That said, the buyer must ensure seller-dependent revenue won’t evaporate after acquisition.
Investor prioritizing control and scalability
An investor who wants to shape the company culture, product roadmap, or long-term growth often prefers starting a new business. For example, a technology consultant from a treaty country could create a U.S.-based consultancy with targeted staffing and client acquisition plans tailored to the investor’s expertise.
Franchises and the middle ground
Buying a franchise can combine the advantages of an established brand and operational model with the ability to demonstrate the investor’s managerial role. Franchise agreements, however, must be examined for exclusivity, transferability, and whether the franchisor’s involvement could render the investor passive.
A practical decision framework
To decide which path is better, the investor should ask:
- How quickly does the investor need to file for the E-2 visa?
- How much capital is available, and is the investor comfortable placing it at risk?
- Does the investor prefer an operation with existing revenue and staff or building something from the ground up?
- Are there existing liabilities or seller dependencies that could jeopardize the business after purchase?
- Will the structure allow the investor to demonstrate control and non-marginality?
Using answers to these questions, investors can map risk tolerance and immigration timelines to the right business option.
Actionable steps and practical tips
Whether buying or starting, the following steps help set up both a sound business and a strong E-2 application:
- Engage specialists early: Work with an experienced E-2 immigration attorney, a U.S. business attorney, a CPA familiar with cross-border transactions, and a business valuation expert if considering a purchase.
- Document source of funds: Collect bank records, sale-of-assets documents, loan agreements, and tax returns to clearly show lawful origin and transfer details.
- Structure the transaction with immigration in mind: Payment schedules, escrow provisions, and staged investments can demonstrate substantial, at-risk capital while protecting the investor.
- Prioritize operational control: Even if buying a minority stake, secure contractual authority to direct operations, or aim for majority ownership.
- Keep the business active: For purchases, ensure contracts are assignable, key employees are retained, and the business continues normal operations during the transition.
For more business-buying guidance, the U.S. Small Business Administration provides checklists and tips; for legal immigration guidance, consider consultation with a specialized E-2 attorney and resources from professional groups such as the American Immigration Lawyers Association.
Choosing between buying an existing business and starting a new one depends on the investor’s priorities: speed and revenue history versus control and clean structure. Both paths can lead to a successful E-2 visa USA application if planned carefully, documented fully, and executed with professional guidance.
What kind of business is the investor considering, and what is the timeline for obtaining the visa? Thoughtful answers to those questions will point toward the better option; speaking with an experienced E-2 attorney early will help translate those answers into a concrete immigration and business strategy.
Please Note: This blog is intended solely for informational purposes and should not be regarded as legal advice. As always, it is advisable to consult with an experienced immigration attorney for personalized guidance based on your specific circumstances.