Skip to content
BARRIERE · E-2 FIELD GUIDE

Barriere — Marta's partner is a United States permanent resident. Does his share count as treaty ownership?

Sources checked:

THE DIRECT ANSWER

No. The treaty-national share must be held by nationals of the treaty country who are not lawful permanent residents of the United States, so his equity counts against the required half.

Permanent residence removes the share from the count

This rule surprises investors who reason that their partner is Canadian by birth and therefore a treaty national. Once a person has become a lawful permanent resident of the United States, their ownership no longer supports the enterprise's treaty nationality for this purpose. The consequence is arithmetical: if he holds half, the treaty-national share is at most half and any adjustment, option or convertible instrument that could dilute Marta puts the enterprise below the requirement. Options include structuring her holding above fifty percent with a clear margin, or restructuring his participation as debt or a management arrangement rather than equity. Each has commercial consequences, which is precisely why the question belongs in the negotiation.

Hypothetical example: A Canadian owner of a specialty-tea importing business proposes a United States venture with a resident partner who wants equal voting rights and an option to increase equity later. The first review should chart present ownership, future conversion rights, and the management powers each person receives. The share register and governing agreement settle nationality and control, not an informal promise between partners. Decide whether the investor will hold a defensible majority or operational control before money moves, because correcting the arrangement after closing may be commercially difficult.