Determining whether a business qualifies as a “real and operating” enterprise for E-2 visa purposes is one of the most important steps an investor must take—and one of the most misunderstood.

What “Real and Operating” Means for E-2 Eligibility

For the E-2 investor visa, the phrase “real and operating” refers to a commercial enterprise that conducts genuine economic activity and is more than a paper shell. The business must be actively engaged in trade or services and have the capacity to generate profit, create jobs, or otherwise produce a clear economic impact in the United States.

Unlike an immigrant investor program that requires a fixed minimum investment, E-2 focuses on the nature and activity of the enterprise: it must be bona fide, active, and directly related to the investor’s role in developing and directing the enterprise.

Why This Requirement Matters

Consular officers and USCIS examiners use the real and operating test to prevent abuse of the E-2 classification. They want to ensure the U.S. immigration benefit is granted only to those who will contribute substantively to the U.S. economy rather than simply parking money in non-commercial assets.

When a business clearly meets this standard, the investor strengthens their chance of approval and minimizes requests for additional evidence or denials based on marginality or speculative intent.

Key Indicators of a Real and Operating Business

Evaluators look for objective signs that the enterprise is functional and active. These indicators include:

• Legal formation and registration — Articles of incorporation, state registration, and required business licenses.
• Physical presence — Office, retail location, warehouse, or dedicated work area (photos, lease or deed).
• Operational transactions — Sales invoices, purchase orders, supplier contracts, service agreements, and receipts.
• Payroll and personnel — Pay stubs, payroll tax filings, or employment contracts showing paid employees or contractors.
• Banking and accounting — Business bank accounts, accounting records, tax returns (when available), and audited or reviewed financial statements.
• Customer engagement and marketing — Active website, client contracts, advertising spend, and social media presence showing ongoing business development.
• Progress toward planned operations — For startups, evidence of construction, supplier commitments, pre-sales, or signed leases establishes momentum.

Documentation That Demonstrates a Real and Operating Enterprise

Documentation is critical. The stronger, more contemporaneous, and clearly connected the evidence is to business activity, the more persuasive it will be. A robust evidentiary package typically includes many of the following items:

• Corporate documents — Articles of incorporation/organization, operating agreements, bylaws, minute books, and shareholder records.
• Ownership evidence — Stock certificates, membership interest statements, purchase agreements showing investor’s ownership percentage.
• Financial evidence — Business bank statements, canceled checks, ledgers, proofs of capital contributions, invoices, and vendor payments.
• Contracts — Client contracts, supplier agreements, franchise agreements, and service contracts that show ongoing commitments.
• Leases and permits — Commercial lease agreements, building permits, occupancy certificates, and photos of the premises.
• Payroll and tax records — Payroll records, W-2/1099 forms, state payroll tax filings, and federal/state business tax returns when available.
• Business plan and projections — A detailed plan showing realistic timelines, staffing, revenue forecasts, and milestones—useful especially for startups.
• Marketing and sales materials — Website analytics, brochures, advertisements, trade-show participation, and lead-generation documentation.
• Evidence of investment path — Wire transfers, escrow agreements, purchase invoices, escrow releases, and loan documents (if loans are at risk).

Evidence Prioritized by Consular Officers and USCIS

For businesses already operating, recent transactional evidence (invoices, receipts, payroll deposits) tends to carry the most weight. For startups and enterprises still in development, the emphasis shifts to tangible commitments and progress: executed contracts, renovation photos, supplier readiness, and binding pre-sales are persuasive.

How Startups Can Satisfy the “Real and Operating” Standard

A startup can qualify, but it must be more than a concept. The investor should show that resources have been committed and that the enterprise has a clear path to operation.

• Show concrete steps — Signed leases, purchase orders for equipment, supplier contracts, or proof of hiring demonstrate action beyond planning.
• Demonstrate capital at risk — Funds should be irrevocably invested or committed to the business, not simply held in a personal account or reserved in escrow under conditions that allow easy withdrawal.
• Provide a credible business plan — Financial projections, break-even analyses, market research, and timelines can help prove that the startup will not be marginal.
• Document commitments — Letters of intent, term sheets, or investor financing that are binding indicate serious progress.

Many consular posts and USCIS officers accept detailed, realistic startup plans when accompanied by demonstrable steps. However, because evaluators can vary, the investor should aim to provide as much contemporaneous, verifiable evidence as possible.

Common Scenarios and How They Are Evaluated

Established Small Business

An established restaurant, retail shop, or service firm usually meets the real and operating standard when it can show steady transactions, payroll, tax filings, and physical premises. These businesses are often the easiest to document.

Franchise

Franchises often qualify because of the pre-existing operating model, vendor relationships, training, and customer recognition. A franchisee should provide the franchise agreement, territory documents, franchise operations manuals, and proof of investment in build-out to strengthen the case.

Technology Startups and Service Companies

Software companies or consultancies can qualify if they show client contracts, development milestones, sales, or letters of intent. For early-stage tech ventures, demonstrable revenue or signed client agreements reduce scrutiny over marginality.

Real Estate Investments

Purely passive investments in real estate—such as buying property to hold for appreciation or long-term leasing—generally do not meet the E-2 standard unless the investor operates an active real estate business (e.g., property management company, development firm) with employees and ongoing operations.

Holding Companies and Passive Portfolios

Entities that exist solely to hold investments without active business operations (e.g., a holding company owning stocks or rental properties with no services provided) typically do not qualify as real and operating enterprises for E-2 purposes.

Practical Steps to Strengthen an Application

Investors can take strategic steps before applying to build a compelling evidentiary record:

• Form the business properly — Complete state-level formation and obtain necessary local licenses and permits.
• Open identifiable business banking — Use business accounts; avoid commingling personal and business funds.
• Document the investment path — Keep copies of wire transfers, canceled checks, escrow agreements, and invoices that track the flow of funds into the business.
• Execute contracts — Sign supplier, customer, and employment contracts that show active commitments.
• Maintain contemporaneous records — Regular accounting records, invoices, receipts, and updated financial statements are persuasive.
• Create a focused business plan — Include staffing plans, job creation estimates, timelines, and marketing strategies tied to the present status of the firm.
• Document physical presence — Lease, photos, utility bills, and signage can help prove an operational premise.
• Engage professionals — Accountants, business consultants, and immigration counsel can help structure transactions and prepare evidence in ways that align with E-2 expectations.

Common Mistakes to Avoid

Applicants frequently make preventable errors that weaken their cases:

• Relying on a purely passive investment — Simply owning property or holding securities typically fails the real and operating test.
• Commingling funds — Lack of a clear paper trail for the investment makes it hard to show funds were at risk and committed.
• Submitting vague business plans — Generic, unrealistic, or unsupported projections invite skepticism, especially for startups.
• Waiting too long to operationalize — Filing before tangible steps are taken increases the risk of an adverse decision; conversely, excessive delay without activity also harms credibility.
• Ignoring local permits and regulations — Operating without required licenses undermines the claim of law-abiding commercial activity.

What to Expect at the Consulate or with USCIS

When applying for an E-2 visa at a U.S. consulate or seeking E-2 classification through USCIS (e.g., change of status), the adjudicator will review documents and ask detailed questions about the business’s operations, investment path, and the investor’s role. Demonstrating command of the business details—financials, contracts, timelines—helps prove the enterprise is real and operating.

Applicants should be prepared to explain how the business will avoid marginality—through job creation, revenue growth, or other measurable impacts. Showing a clear link between the investor’s role and the business’s daily direction is essential.

When to Consult an Attorney

Because interpretations of “real and operating” can vary by consulate and adjudicator, investors should consult an immigration attorney experienced with E-2 cases early in the process. An attorney can:

• Evaluate whether the enterprise meets the requirement
• Advise on the best evidence to submit
• Help structure investments and contracts to demonstrate commitment and risk
• Prepare a persuasive business plan and submission packet

For general guidance on E-2 criteria and procedures, see the U.S. Department of State’s overview of the Treaty Investor Visa and USCIS’s E-2 information page:

• U.S. Department of State — Treaty Trader & Investor Visas (E)
• USCIS — E-2 Treaty Investors

Questions Investors Should Ask Themselves

Before filing, the investor should answer these practical questions to self-assess preparedness:

• Has the business taken visible, verifiable steps toward operation (leases, contracts, purchases)?
• Are the invested funds at genuine risk and committed to the enterprise?
• Does the enterprise have a physical presence and evidence of customers or suppliers?
• Will the business generate more than a minimal living for the investor and family or create jobs for U.S. workers?
• Is there clear documentary evidence tying the investor to ownership and operational control?

Identifying a real and operating business for E-2 eligibility is fundamentally about demonstrating tangible commercial activity, financial commitment at risk, and a credible plan for sustained economic impact. When an investor methodically compiles contemporaneous evidence of transactions, contracts, personnel, and premises—supported by a realistic business plan—the E-2 case becomes much stronger. Would the investor like a tailored checklist for their specific business type or a review of their evidence package?

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.