Selling a business while holding an E-2 Treaty Investor visa requires careful review because the visa is tied to the business itself.
Under U.S. immigration regulations, an E-2 investor must continue to own and direct the specific business that supported the visa approval. That requirement applies for the entire period of stay. If the business is sold and the investor no longer owns or controls it, the facts that supported the E-2 status no longer apply.
A sale or transfer of ownership that changes those facts is treated as a substantive change under federal regulation. In that situation, the investor must take steps to remain compliant. This means having approval for a new E-2 based on a different qualifying business, changing to another lawful non-immigrant status, or leaving the United States.
Partial sale versus full sale of an E-2 business
A business sale does not affect E-2 status in the same way in every situation. The impact depends on whether the transaction changes the investor’s ownership or control of the qualifying enterprise. Under federal regulation, E-2 eligibility requires the investor to continue owning and directing the business that supported the visa approval.
A partial sale may allow the investor to remain in E-2 status if the investor continues to hold a controlling interest and remains responsible for directing the enterprise. If ownership or control falls below the level required to meet E-2 eligibility, the qualifying basis no longer exists. A full sale, where the investor transfers ownership and no longer controls the business, ends the basis for E-2 status because the investor no longer owns or directs the qualifying enterprise.
These determinations are made under 8 Code of Federal Regulations (CFR) section 214.2(e), which requires the approved facts of the E-2 enterprise to remain in place for the entire period of stay and treats changes affecting ownership or control as substantive changes subject to review by U.S. Citizenship and Immigration Services (USCIS).
Filing or seeking guidance when the E-2 classification is intended to continue
Some succession plans are structured so that the treaty enterprise continues operating and intends to continue employing the treaty investor or an E-2 employee in E-2 status after a sale, restructuring, or ownership change. In those situations, U.S. Citizenship and Immigration Services (USCIS) treats changes that affect ownership, control, or the qualifying nature of the enterprise as substantive changes.
Where there has been a substantive change and the treaty enterprise wishes to continue employing the treaty investor or affected employee in E-2 status, USCIS guidance requires the filing of a new Form I-129 to notify USCIS of the change. The Form I-129 must include evidence showing that the treaty investor or affected employee continues to qualify for E-2 classification.
Where it is unclear whether a planned ownership change, restructuring, or partial sale is considered substantive, USCIS guidance allows the treaty enterprise to request a determination through the Form I-129 process by submitting a complete description of the change.
Preparing for a sale to maintain lawful status
Because E-2 status depends on continued ownership and control of the qualifying enterprise, immigration status must be addressed as part of the sale process. The investor must remain in lawful status at all times.
If a planned sale will reduce or end the investor’s ownership or control of the business, preparation is required to avoid a gap in status. This means that any new E-2 petition, change of status, or departure from the United States must be timed to coincide with the end of the qualifying E-2 activity. Remaining in the United States without a valid immigration basis after a sale is not permitted under federal regulation.
These requirements come from 8 Code of Federal Regulations (CFR) section 214.2(e), which requires E-2 eligibility to be maintained for the entire period of stay and places responsibility on the investor to remain compliant.
Sources:
- Electronic Code of Federal Regulations (eCFR). https://www.ecfr.gov/current/title-8/chapter-I/subchapter-B/part-214/section-214.2
- USCIS. https://www.uscis.gov/policy-manual/volume-2-part-a-chapter-4
- USCIS. https://www.uscis.gov/working-in-the-united-states/temporary-workers/e-2-treaty-investors