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MUNICIPALITY OF THE COUNTY OF RICHMOND · E-2 FIELD GUIDE

Can a Richmond County buyer hold forty-five per cent of an American yard and still qualify for E-2?

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THE DIRECT ANSWER

No. The enterprise must be at least fifty per cent owned by nationals of the treaty country, and a fifty-five per cent American shareholder defeats that outright. The shareholding has to be restructured before the purchase completes; nothing about Yvon's day-to-day role compensates for it.

The ownership percentage is a threshold, not a factor to be weighed

Several E-2 requirements are matters of degree, judged on the whole picture. Nationality of the enterprise is not one of them. Ownership is traced to individuals, and at least half must be held by nationals of the treaty country, so a company in which an American holds fifty-five per cent is simply not a treaty-national enterprise.

Applicants sometimes hope that operational control, a management agreement or a promise to transfer shares later will bridge the gap; none of them does, because the test looks at ownership as it stands. The commercial fix is usually straightforward if it is addressed early: the seller can take back a mortgage or a secured note instead of equity, retain a minority stake, or be paid an earn-out, all of which can leave him well protected without giving him more than half the company. What cannot be fixed is a completed purchase, because unwinding a share issue after closing is expensive and creates its own questions about who really owns the business.