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Hypothetical example: three Asphodel-Norwood partners plan to buy an American commercial landscaping company through a Canadian holding company in which one shareholder, holding forty-five percent, is a Chinese citizen resident in Canada. The enterprise's treaty nationality is determined by the nationality of the individuals who ultimately own it, traced through every corporate layer. That makes this structure something to check before the purchase agreement is signed rather than after, because a proportion that falls on the wrong side of half is very difficult to fix afterwards.
The enterprise must be at least half owned by treaty nationals
E-2 requires that the enterprise possess the nationality of the treaty country, and nationality is determined by the nationality of the individuals who ultimately own at least fifty percent of it. Ownership held through corporations is traced through to the individuals behind them. In this example the Canadian holding company is owned fifty-five percent by Canadian citizens, so fifty-five percent of the American enterprise is ultimately owned by treaty nationals and the requirement is met, with margin but not much. Any subsequent share issue or transfer that moves the Canadian proportion below half would defeat it.
Residence in Canada is not nationality
A shareholder who is a Chinese citizen and a Canadian permanent resident does not count toward the treaty-national share, because the test is nationality rather than residence, and permanent residence does not confer it. This surprises people, particularly where the individual has lived in Canada for decades and considers themselves settled. It is also worth noting that individuals who hold treaty nationality but are permanent residents of the United States are not counted as treaty nationals for this purpose either. Identify each shareholder's actual citizenship, in writing, and keep the passports or citizenship certificates in the file.
Lock the structure with the shareholders' agreement
Because the qualification depends on a proportion that could shift, the corporate documents should protect it. Consider provisions restricting transfers that would take treaty-national ownership below the threshold, pre-emptive rights, and a requirement to disclose changes in shareholders' citizenship. Then remember that the individual applicant must separately qualify: the person coming to develop and direct the enterprise must hold the treaty nationality and must have control, ordinarily through at least fifty percent ownership or a managerial position. A structure that qualifies the enterprise does not by itself qualify any particular person to run it.
What else is on your mind?
Is there one minimum investment that guarantees E-2 eligibility?Is holding money or owning an asset enough for E-2?Editorial source review: 2026-09-07. General preparation guidance, not an individual assessment.