Proving that a new business is more than a “marginal enterprise” in its first year is one of the most common and consequential challenges for E-2 applicants.

What “more than marginal” means for an E-2 investor

At its core, the E-2 regulation requires that an enterprise be more than a source of a minimal living for the treaty investor and family. The relevant regulation 8 C.F.R. § 214.2(e)(2) explains that a marginal enterprise is one that either cannot generate more than minimal living for the investor and family, or cannot have a significant economic impact in the United States. Agencies that adjudicate E-2 cases, both U.S. Citizenship and Immigration Services (USCIS) and consular posts look for clear, credible evidence that the enterprise will be economically viable beyond subsistence level. For official program background see the Department of State and USCIS pages on E visas:

• U.S. Department of State – Treaty Investors (E)
• USCIS – E-2 Treaty Investors
• 8 C.F.R. § 214.2 (e)

Why the first year is uniquely scrutinized

The first year often lacks the historical financial statements and payroll history that make proof straightforward. Because adjudicators expect some documentation of actual operations, a new business must assemble a different kind of file: one that demonstrates credible planning, tangible commitments, early operational activity, and realistic financial forecasting.

Key categories of evidence that persuade adjudicators

To establish non-marginality in year one, an applicant should compile a package that evidences both present activity and credible future capacity. Include documents from these categories:

• Formal business plan and pro forma financials: A detailed business plan with 3 to 5 years financial projections, monthly first-year cash flow, staffing schedule, and break-even analysis. The projections should be realistic, tied to verifiable assumptions, and consistent with industry norms.
• Capitalization and source of funds: Bank statements, wire transfers, escrow agreements, or loan documents showing that funds are invested and at-risk in the enterprise.
• Leases and fixed asset purchases: Signed commercial lease, equipment purchase invoices, real estate closing statements, or shipping receipts demonstrating tangible investment in the business premises and operations.
• Contracts, letters of intent, and purchase orders: Executed service agreements, supplier contracts, and customer purchase orders that show committed revenue or supply relationships.
• Employment evidence: Job descriptions, planned salary schedules, recruitment ads, offer letters, and contractor agreements showing a credible plan to create U.S. jobs.
• Early revenue and marketing activity: Sales receipts, invoices, marketing materials, website analytics, and advertising invoices that demonstrate initial traction.
• Independent market research and industry data: Third-party reports (SBA, BLS, trade groups) that validate demand assumptions and revenue forecasts. Examples include wage and occupational data from the Bureau of Labor Statistics or market reports from reputable research firms.
• Professional support and internal controls: Engagement letters with an accountant or attorney, bookkeeping contracts, and a named management structure that show sound governance.

How to structure a persuasive year‑one business plan

Adjudicators often read business plans for consistency and credibility rather than legal polish. A persuasive plan for a first-year E-2 case should include the following core sections, each tied to documentary backup:

• Executive summary: Clear description of the business model, investment amount, and purpose of the E-2 application.
• Products/services and market: Market size, target customers, competitive analysis, and how the business will win customers.
• Operational plan: Facility location, equipment, suppliers, and a timeline for key milestones (license obtained, arrangements signed, hiring dates).
• Management and staffing: Roles, CVs of key principals, and a hiring schedule showing U.S. hires and timing.
• Financial projections: Monthly cash flow for the first year, quarterly P&L for years 1–3, break-even analysis, and assumptions with supporting evidence.
• Risk analysis and contingency plans: Realistic identification of main risks and steps to mitigate them (backup suppliers, conservative sales forecasts).

Practical examples by business model

Different types of ventures need different emphases. Below are three common scenarios and how each can demonstrate non-marginality in year one.

Small service business (e.g., boutique consultancy, specialty clinic)

Service businesses may have lower capital needs but must prove that revenues will exceed a minimal living standard through client contracts and an expanding client base. Useful evidence includes:

• Signed service contracts or retainer agreements from paying clients.
• Monthly billing and collections records, even if modest.
• Detailed client acquisition plan with verifiable leads and follow-up correspondence.
• Projected hiring of administrative or professional staff with job offers and salary commitments.

Product-based business or retailer

Product businesses should show inventory purchases, supplier relationships, and sales channels. Critical documents include:

• Purchase orders and invoices for inventory.
• Retail or e-commerce sales receipts, distribution agreements, and platform listings.
• Leased warehouse or storefront, and logistic/shipping contracts.

Startup with scaling potential (technology or growth-focused)

For startups that are not immediately revenue-generating, the focus shifts to credible growth indicators:

• Evidence of product development progress (MVP release notes, alpha/beta user lists).
• Letters of intent from potential customers, pilot contracts, or advisory board members with industry credibility.
• Substantial investment tied to growth milestones and a hiring plan that will create skilled U.S. jobs as revenue ramps.

How many jobs or what revenue is “enough”?

There is no magic number that automatically demonstrates that a business is not marginal. USCIS and consular officers evaluate the totality of evidence. A small retail store that hires multiple U.S. employees and pays market wages can qualify; a solo proprietor earning an above-minimal wage might also qualify in the right circumstances. What matters is capacity—whether the business will likely generate more than minimal living for the investor and contribute economically (through jobs, taxes, supplier purchases, etc.).

Building credibility: what adjudicators find persuasive

Adjudicators look for consistency, verifiability, and arms-length transactions. To build credibility, the investor should:

• Use verifiable third-party documents: Contracts with recognizable companies, bank statements, and independent market data carry weight.
• Avoid broad, unsupported forecasts: Tie revenue assumptions to concrete sources like signed LOIs or pilot customer conversions.
• Document timelines and milestones: Show when a lease was signed, when equipment was ordered, when a hiring process started.
• Keep business and personal finances separate: Clear separation avoids the impression that the business is a shell for the investor’s personal expenses.
• Demonstrate at-risk investment: Funds transferred to the business command account or used for business expenses show commitment.

Common red flags and how to avoid them

Be careful to avoid factors that raise doubts about non-marginality:

• Overly optimistic, unsupported projections: Avoid unrealistic revenue growth with no factual basis.
• Lack of real operational activity: No lease, no purchases, no marketing, and no hires suggests a paper business.
• Personal expenses labeled as business costs: That undermines credibility.
• Backdated or fabricated documents: Any sign of alteration will likely cause denial and possible referral for fraud.
• Under-capitalization: Insufficient funds to reach break-even and execute the plan is problematic.

Practical, step-by-step checklist for the first-year file

To transform planning into proof in the first year, the investor should follow a documented timeline with these steps:

• Finalize and sign a commercial lease for business premises.
• Make capital contributions and document transfers with bank statements and deposit receipts.
• Purchase essential equipment and retain invoices and shipping receipts.
• Secure at least one customer agreement, supplier contract, or LOI; retain all correspondence.
• Recruit staff and produce offer letters or contractor agreements; document payroll setup and tax IDs.
• Launch an initial marketing effort and keep invoices, analytics, and campaign reports.
• Maintain accurate monthly bookkeeping and reconciliation; have an accountant review or prepare interim statements.
• Assemble a concise cover memo for the adjudicator that ties together the business plan, milestones, and documentary evidence.

Preparing for the consular interview or USCIS review

Beyond documents, presenting a coherent, concise narrative is crucial. The investor should be able to summarize the business model, explain how the investment is at-risk, and point to the concrete evidence showing that the business will be more than marginal. Useful preparation includes:

• Creating a short “elevator pitch” that explains how the business makes money and why it will be sustainable.
• Anticipating questions about revenue assumptions, hiring timelines, and how funds were used.
• Organizing a document binder or indexed PDF so the adjudicator can quickly find supporting evidence.

When projecting jobs and revenue, be realistic and document everything

Adjudicators will test assumptions in projections. Each line item in a pro forma should be traceable to an underlying assumption and, where possible, an external data point (e.g., average industry conversion rates, customer lifetime value, regional wage levels from BLS). Conservative projections that are fully documented are more persuasive than aggressive forecasts that lack support.

When to involve professionals

Early engagement with an immigration attorney and a CPA or business advisor increases the chance of a successful application. Professionals can help craft a credible business plan, prepare defensible financial projections, and assemble a document package that anticipates the specific analytical approach adjudicators use. For templates and small-business resources, see the Small Business Administration.

Final practical tips

In the first year, the investor’s goal is to replace uncertainty with verifiable evidence. A few final tips:

• Document contemporaneously: Keep dated records for every action including signatures, receipts, emails, and bank transfers.
• Be conservative in forecasts: Explain assumptions and cite third-party data where possible.
• Show at-risk investment: Evidence that funds are irrevocably committed to the business, even if not yet fully spent helps show genuine investment.
• Focus on economic contribution: Highlight job creation, taxes, and U.S. supplier spending as measures of impact.
• Prepare a succinct cover memo: Tie together documents and present the case in plain language for the adjudicator’s quick review.

By assembling a credible paper trail of investments made, operational steps taken, and realistic forecasts backed by verifiable assumptions, an investor can persuasively show that a first-year enterprise is more than marginal. If questions remain about a particular business model or the evidence available, consulting a lawyer with significant E-2 experience and a business accountant early in the process is a prudent next step. What specific milestone will the investor document next to strengthen their case?

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.