The E-2 visa’s “marginality” test is one of the most misunderstood parts of applying for a treaty investor visa — yet it often determines whether an investor’s application will succeed. This article explains, in plain terms, what counts as “more than minimal” income and how investors can demonstrate that their business satisfies the requirement.
What the marginality requirement is — and why it matters
At the core of an E-2 visa adjudication is the requirement that the qualifying enterprise be a real, active commercial enterprise that is not merely marginal. In practice, this means the enterprise must do more than provide a minimal living for the investor and family: it must either produce significant income or have the capacity to create job opportunities for U.S. workers.
Consular officers and U.S. immigration authorities review the business to determine whether it has a realistic economic footprint. If the enterprise is found to be marginal, the applicant may be denied because the E-2 classification is intended to promote economic activity and employment in the United States, not just to provide a residence for the investor and family.
Two ways to meet the “more than minimal” standard
There are two common approaches to satisfying the marginality requirement. An investor can demonstrate either (or both):
- Substantial income generation — the business is expected to generate income beyond what is needed to support the investor and their family at a minimal subsistence level; or
- Job creation — the business will create full-time jobs for U.S. workers beyond the investor and their family.
Adjudicators accept either pathway, but the evidence and timing differ: start-ups often rely on robust business plans and pro forma financials, while established businesses should provide historical financials, payroll records, and tax returns.
There is no single dollar cutoff — what decision-makers consider
Unlike some immigration rules that use fixed numbers, the E-2 marginality test has no statutory dollar threshold. Instead, adjudicators consider the totality of circumstances. Key factors include:
- The investor’s household needs relative to projected or actual business income;
- Realistic timelines for when the business will reach sustainable revenue and profitability;
- Evidence of hiring or reasonable plans to hire U.S. employees;
- The level of capital invested and how it is being used (operations, marketing, hiring, equipment); and
- Industry norms and local market context (some businesses are naturally low-margin but may justify size through employment).
Official guidance from the Department of State and U.S. Citizenship and Immigration Services (USCIS) reflects this flexible, fact-specific inquiry. See the State Department’s E-2 info and USCIS guidance for background: travel.state.gov — E-2 Investor and uscis.gov — E-2 Treaty Investors.
What counts as “income” for the marginality test?
Adjudicators will look at the enterprise’s capacity to generate economic benefit. This includes, but is not limited to:
- Payroll and wages paid to the investor and any U.S. employees;
- Net business profits shown on profit and loss statements and tax returns;
- Projected revenue growth in a credible pro forma for start-ups;
- Distributions or dividends from the business to the investor (properly documented); and
- Other documented sources of income that the investor legitimately intends to use (e.g., contracts, retainers, recurring service fees).
Adjudicators will generally not credit speculative or unsupported claims of future income. In renewal applications, actual historical financial performance (tax returns, W-2s/1099s, bank statements) carries significant weight.
Illustrative examples: how income evidence can meet — or fail — the test
Example A — Small consultancy run entirely by the investor: If the investor projects that the consultancy will pay a single salary that only covers the investor’s modest personal living expenses, adjudicators may view the enterprise as marginal. Even if the consultant bills a steady stream of clients, the business’s economic footprint may be seen as insufficient unless those funds are shown to generate broader economic impact.
Example B — Start-up with realistic hiring plan: A tech start-up invests $200,000 in product development and commercial operations, presents a detailed five-year pro forma showing break-even in 18 months, and plans to hire five full-time U.S. employees in year two. With supporting market research and contracts, adjudicators may find the business will create employment and therefore is not marginal.
Example C — Retail store demonstrating immediate local employment: A restaurant opens with committed lease, equipment purchases, payroll for a staff of eight, and initial sales receipts. The combination of actual payroll and immediate hiring clearly supports a non-marginal finding.
Practical calculations and benchmarks to prepare
Because no fixed dollar rule exists, investors should use defensible, documented benchmarks to show the business will do more than provide minimal subsistence. Helpful reference points include:
- The federal poverty guidelines as a baseline for minimal living costs (useful when arguing that the business will produce income well above poverty): HHS Poverty Guidelines.
- Market salary data from sources like the Bureau of Labor Statistics to justify salary assumptions for new hires.
- Industry revenue-per-employee metrics, where applicable, to show realistic growth and job-creation potential.
Examples of a simple calculation an adjudicator might find persuasive (illustrative only): If a household of three has an annual subsistence threshold of $30,000, a business projecting net cash flows of $60,000 annually (after reasonable reinvestment) is showing income that is clearly above minimal subsistence. If, in addition, the enterprise plans to hire two U.S. employees at market wages, it strengthens the case further.
Evidence that strengthens an E-2 marginality showing
Investors should assemble a fact-based file that demonstrates economic reality. Useful items include:
- Five years of pro forma financial statements for start-ups, with clear assumptions and sensitivity analyses;
- Historical financial statements (balance sheet, profit & loss, cash flow) for operating businesses;
- Federal and state tax returns evidencing reported income;
- Payroll records, W-2s, 1099s, and hiring documentation;
- Bank statements showing capital deployment and operating receipts;
- Signed client contracts, purchase orders, and invoices demonstrating revenue pipeline;
- Lease agreements, vendor contracts, and equipment invoices showing business commitments;
- Business licenses and registrations; and
- Third-party market research or letters from customers/suppliers validating demand.
Clear organization matters: annotate financial statements, explain assumptions in pro formas, and connect each piece of evidence to the specific marginality argument.
Common mistakes that lead to marginality denials
Several recurring errors undermine an investor’s case:
- Overly optimistic revenue projections without corroborating evidence or unrealistic timelines;
- Failing to show hiring plans or classifying labor as independent contractors when those roles should be employees;
- Using personal loans and draw-downs as a substitute for demonstrable business revenue without a plan showing how these funds will create sustainable operations;
- Relying exclusively on the investor’s personal outside income (e.g., rental income or investments elsewhere) while the U.S. enterprise remains inactive or marginal; and
- Poorly documented capital investment — for example, claiming funds were “invested” without bank transfers, invoices, or receipts to prove deployment into the U.S. business.
How the approach differs at initial application vs renewal
For initial E-2 applicants with a newly capitalized start-up, consular officers and USCIS tend to accept detailed pro formas and business plans — but they expect realism and concrete steps already taken (leases signed, equipment purchased, employees recruited). For renewals and extensions, adjudicators place greater emphasis on actual results: tax returns, payroll records, and operational evidence showing the enterprise has moved beyond minimal activity.
Practical tips for preparing a persuasive marginality showing
To reduce risk and maximize the strength of a filing, investors should consider these practical steps:
- Document capital deployment — show bank transfers, vendor invoices, and receipts tied to the U.S. enterprise.
- Create realistic pro formas — include month-by-month cash-flow forecasts for the first year, then annual projections, with clear assumptions and sensitivity scenarios (best, expected, worst case).
- Prioritize early hiring where feasible — even one committed U.S. hire can shift the marginality analysis positively when combined with credible growth plans.
- Use third-party validation — letters from customers, signed purchase orders, or pilot contracts make projected revenues more believable.
- Align salaries with market norms so payroll numbers are defensible based on industry data.
- Keep personal and business finances distinct — avoid mixing funds in a way that makes the enterprise’s viability unclear.
Sample document checklist to show “more than minimal” income
Investors should tailor evidence to their business, but a credible submission often includes:
- Business plan and executive summary;
- Three-year pro forma financial statements and cash-flow forecasts, annotated;
- Recent bank statements showing capital transfers into the business;
- Invoices, contracts, and receipts demonstrating current revenue or revenue commitments;
- Lease or purchase agreements for business premises and equipment invoices;
- Payroll records, W-2s, and employment agreements;
- Tax returns for the business (or personal returns tied to business income) when available;
- Market research or industry reports; and
- Letters from suppliers or customers evidencing ongoing business relationships.
When an investor has outside income or multiple ventures
If the investor has other legitimate income sources (rental income, pensions, investments), adjudicators may consider overall household resources. However, relying on outside income to cure a marginal U.S. enterprise is risky: the E-2 classification requires that the qualifying enterprise itself be more than marginal or be creating employment. If the investor’s strategy is to combine income sources, it should be clearly explained and documented; ideally, the U.S. enterprise’s economic impact should stand on its own or be shown to be on a credible growth trajectory.
For investors operating multiple business interests, it is important to show how the qualifying enterprise specifically contributes to economic activity and employment. Simply listing several small projects without evidence that any one will expand beyond minimal subsistence is unlikely to satisfy adjudicators.
Final practical thought
Proving that an E-2 enterprise is not marginal is ultimately about credibility and concrete economic impact. Whether through demonstrable income above subsistence or the creation of U.S. jobs, the investor’s evidence should tell a coherent story: realistic assumptions, documented steps already taken, and a plausible path to sustained operations. Thoughtful preparation — with realistic financials, third-party validation, and clear documentation of hiring and capital use — makes the difference between an application that survives scrutiny and one that falls short.
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.