IN THIS GUIDE · Testing whether a minority stake and a senior title amount to developing and directing
Start with the E-2 eligibility and application overview
Control lives in the documents, not the org chart
Read the shareholder agreement, the operating agreement or bylaws, and any investor rights or voting agreement. Look for who appoints and removes officers, what decisions need supermajority consent, whether the minority holder has a board seat with real votes, and what drag-along, veto or deadlock provisions exist. A chief executive title granted by a majority owner who can revoke it next quarter describes an employment arrangement more than a directing interest. Read the documents in one sitting with a single question in mind: what can this person do without asking anyone. Reserved matters lists, quorum rules, and officer removal provisions answer it. Where a document is described as standard, ask for it anyway, since the phrase usually means nobody has read it recently. Note the amendment clause too, because rights a majority can vary unilaterally are weaker than they first appear.
Check the nationality of the ownership, not only the investor
Treaty nationality has to run through the enterprise as well as the person. In a company with several shareholders, work out the nationality of each owner and how the ownership percentages combine, including any holding companies in the chain. Canadian permanent residence held by an individual is not treaty nationality by itself. Get the capitalization table and confirm it matches the corporate filings before building any argument on top of it. Trace nationality through to individuals, then total the percentages against the fifty percent requirement rather than eyeballing them. Two errors recur: counting a corporate shareholder as though it had a nationality of its own without looking through it, and treating permanent residence as though it were nationality. Ask for the register as certified by the company, and reconcile it against the most recent corporate filing before anything is built on the figures.
Ask what the money buys and whether it is at risk
Establish what the stake costs, who receives the payment, and whether the funds enter the company as capital or leave with an exiting shareholder. Confirm whether the subscription is refundable, conditional or already drawn down. Investment that is genuinely irrevocable and exposed to loss reads differently from a sum parked pending a decision. Also check for redemption rights or guarantees that would remove the risk the category is concerned with. Follow the payment to its destination. Money paid to an exiting shareholder leaves the business and never becomes working capital, which affects both the investment analysis and the business plan resting on it. Ask whether the subscription proceeds fund operations and, if so, which line items. Where a portion is refundable or conditional on a future event, that portion is not irrevocably committed and should be described as what it is.
Consider whether a different category fits the facts
If the reality is a senior job with a small equity sweetener, an employment-based route may describe the arrangement more accurately than an investor one. That is a question worth asking early, with qualified advice, rather than reshaping the ownership story to fit a preferred label. Documents rewritten to support a category invite scrutiny of the whole file. Let the commercial deal be what it is, then choose the route. Hypothetical example: a clinic group offers a chief operating officer title with a twelve percent holding, no board seat, and an employment agreement terminable on notice. That package may be a good job; it is a weak basis for claiming the ability to develop and direct the enterprise. Where the facts point to employment, say so early, and let the commercial negotiation proceed on its own merits rather than being reshaped to fit a category.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.