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This question comes up frequently with consulting companies, professional services, online businesses, and other E-2 companies that can operate with relatively few people.
The investor has a legitimate business, has invested money, and may already have customers. From a business perspective, everything may seem perfectly reasonable.
Then comes the immigration question: is the company being built to grow beyond simply supporting the investor?
That distinction matters for an E-2.
The regulations do not require every E-2 business to become a large company or hire a particular number of employees. They do, however, require the enterprise to be more than marginal. When evaluating marginality, the government looks at whether the business has the present or future capacity to generate more than enough income to provide a minimal living for the investor and the investor’s family. Future capacity can also be considered, generally within five years from the date the investor begins normal business activity.
This can become particularly interesting with a business built around the investor’s own expertise.
Imagine an experienced marketing consultant coming to the United States to establish an agency.
Initially, much of the company's value may come directly from that person’s experience. The investor brings in clients, develops strategy, and may personally handle a significant amount of the work.
There’s nothing inherently unusual about that. Many successful businesses start with the founder doing almost everything.
The business plan, however, needs to explain where the company goes from there.
At Visa Business Plans, this is where we start looking closely at how the business is expected to operate as it grows.
Perhaps the investor plans to bring in additional consultants as the client base increases. Maybe an employee will eventually handle administrative work, allowing the owner to spend more time developing clients and managing the company. The business could also expand into services that require additional staff.
Whatever the strategy is, it should make sense for that particular business.
And this is where applicants can sometimes go too far in the other direction.
Once they become concerned about marginality, they assume the solution is to fill the business plan with employees.
Suddenly, a consulting company that realistically needs three people has eight projected employees. The payroll becomes enormous, yet the revenue projections don’t support it.
Now we’ve created a new credibility problem while trying to solve another one.
The better approach is to understand how the company actually makes money and what resources it will realistically need as it develops.
For a consulting business, that might mean looking at the number of clients the company expects to serve, the average revenue per engagement and how many engagements one consultant can reasonably handle. As the number of clients grows, the need for additional people begins to emerge naturally from the numbers.
The financial projections should reflect the same story.
If revenue grows substantially while the company remains completely dependent on the investor doing all the work, we would want to understand how that’s possible. On the other hand, if the plan shows significant hiring, the projected revenue and available cash need to support that payroll.
That’s the kind of consistency we look for when developing an E-2 business plan.
We aren’t trying to turn every entrepreneur into the CEO of a large organization. We’re trying to understand what the investor genuinely intends to build and then make sure the operational plan, staffing and financial projections fit together.
This is especially important today as technology changes the way small businesses operate. Some companies can generate significant revenue with much smaller teams than businesses in the same industry might have needed years ago.
That doesn’t mean staffing no longer matters.
It means the staffing plan needs to reflect the reality of the business, not an arbitrary idea of what an E-2 company is supposed to look like.
An E-2 business can absolutely begin with an entrepreneur and an idea.
The important question is what that entrepreneur is actually building.
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The information provided in this blog is intended solely for informational purposes. While we strive to offer accurate and up-to-date content, it should not be considered legal advice. Immigration laws and regulations are subject to change, and individual circumstances can vary widely. For personalized guidance and legal advice regarding your specific immigration situation, we strongly recommend consulting with a qualified immigration attorney who can provide you with tailored assistance and ensure compliance with current laws and regulations.
Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in four different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital, and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of U.S. and Canadian immigration, SBA loans, and others.
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