A "marginal enterprise," in the context of the E-2 visa requirement, is defined as a business that is not capable of generating more than enough income to provide a minimal standard of living for the treaty investor and their family. This determination ensures that the investment is not merely a means of self-employment for the investor but has the potential to contribute to the U.S. economy. However, an enterprise that does not currently generate substantial income but demonstrates the potential for significant economic contribution is not considered marginal. This means a business that is not currently profitable can still qualify for an E-2 visa if it can demonstrate future capacity to generate more than just a minimal living.

Assessing Marginality

To assess marginality, the reviewing consular officer considers the enterprise's present or future capacity to generate income. The assessment of "future capacity" typically focuses on a timeframe of five years from the date the business commences normal operations.

The ability to project future profitability is critical. For a new business, the applicant must demonstrate through detailed financial projections and a comprehensive business plan that the enterprise has the potential to become economically viable and provide more than just a minimal living for the investor and their family. Existing businesses must show historical financial performance and positive trends that support the expectation of continued and enhanced profitability.

Evidence to Demonstrate Non-Marginality

Business Plans: A comprehensive business plan is essential, especially for new businesses. This plan should outline the business model, market analysis, marketing strategies, business operations, hiring projections, and financial projections. Key elements include:

• Business Model Explanation: Clearly define how the business will generate revenue and profits.

• Market Analysis: Detailed analysis of the market, including target customers, competitors, and market trends.

• Marketing Strategies: Plans for attracting and retaining customers, including advertising, promotions, and sales strategies.

• Business Operations: Day-to-day operations, organizational structure, and management plans.

• Hiring Projections: Plans for staffing, including roles, responsibilities, and timelines for hiring.

• Financial Projections: Five-year financial forecasts, including sales projections, first-year operating budget, and capital allocation.

Financial Projections: Accurate financial projections within the business plan are critical. These should show anticipated income exceeding minimal living expenses within five years. This demonstrates the business's potential to be economically viable and provide a return on the investor's capital.

Evidence of Success and Growth: For existing businesses, documentation of past successes, financial growth, and overall positive performance is crucial. This includes financial statements, tax returns, and records showing profitability or a consistent upward trend in revenue.

History of the Business: Businesses with a strong performance history, even if currently facing financial difficulties, can still qualify for an E-2 visa. This historical success demonstrates the business's potential to rebound and continue contributing to the U.S. economy.

Real Estate Enterprises: Real estate investments may have different criteria for evaluating marginality. Investors should verify how "marginal" is defined in the context of real estate for E-2 visa applications, as specific guidelines may apply.

Overcoming a Marginal Determination

While a substantial income from other sources cannot solely offset a marginal enterprise determination, earlier cases and instructions for Form DS-156E suggest that providing evidence of additional income sources or significant reserve funds might influence the assessment. However, the effectiveness of this approach may vary, and consular officers may focus on the proportion of reserve funds to the overall investment.

Investors may need to demonstrate that reserve funds or additional income sources are significant enough to support the business during its initial stages or periods of financial difficulty. This can include personal savings, financial support from other sources, or evidence of low operating costs that reduce the need for substantial immediate income.

Note: It is crucial to provide accurate and consistent information regarding the investment and business value, as any discrepancies may lead to the denial of the E-2 visa. Consular officers scrutinize the provided information carefully, and any inconsistency can result in a negative determination. Therefore, meticulous preparation and thorough documentation are essential to ensure the best possible outcome for an E-2 visa application.

Closing Thoughts

The E-2 visa offers a unique opportunity for foreign investors and entrepreneurs to live and work in the United States while managing their investments. However, the application process can be complex, and ensuring that all criteria are met is crucial for success.

If you are considering applying for an E-2 visa, consulting with an experienced immigration attorney can provide valuable guidance and increase your chances of a successful application. Contact our office today to learn more about how we can assist you with your E-2 visa application and help you achieve your business goals in the United States.