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Company formation & E-2 · Company Formation for E-2 Investors

Company formation for E-2

For someone applying for an E-2 investor visa, the first step is often not filling out visa forms but forming a company in the United States, signing an operating agreement, obtaining an EIN, opening a bank account and signing a commercial lease. These documents are the company’s own legal documents, and they are also the core evidence later given to the consular officer: who owns the company, who controls it, whether the money has actually been invested, and whether the business is really operating all have to be shown by these documents.

Our approach is to handle company formation, the commercial lease and the visa application together: when forming the company, we structure ownership and management with the E-2 review criteria in mind, and when signing a lease or purchase contract, we consider conditions and escrow arrangements, so you do not form the company first and then discover, when preparing the visa, that the documents need to be redone. This section also applies to clients who must first establish a business in the United States for an L-1 new office, EB-5 direct investment and similar matters.

Start here: (1) Company formation and commercial leases are governed by state law. Our managing attorney, David Wang, is licensed in Illinois, New York and Massachusetts, and this section is written mainly for Illinois. If your business is formed in another state, the rules differ and must be handled by a local lawyer or registered agent. (2) State fees, forms and processing times are as currently published on the official websites of the Illinois Secretary of State, the IRS and others; this section does not give specific amounts. (3) Tax classification is discussed only in principle; for specific arrangements, please work with an accountant. See our tax section. (4) We do not match clients with or recommend businesses, and we do not guarantee visa outcomes.

Section guides

Formation

Forming an LLC in Illinois

Names and name reservation, registered agent and registered office, Articles of Organization (LLC-5.5), member-managed or manager-managed, annual reports and Certificates of Good Standing, series LLCs, foreign nationals as members and managers, foreign qualification, the current status of beneficial ownership information (BOI) reporting, and how an LLC fits with E-2.

Agreement

Operating agreements

What Illinois law says about operating agreements and its default rules; clauses on contributions, ownership, profit distributions, management and voting, transfer restrictions, exit buyouts, deadlock and dissolution; special E-2 points such as 50% ownership or operational control, joint ventures with partners of non-treaty nationality, and contributions being “at risk.”

EIN · Banking

EIN, bank accounts and tax registration

Form SS-4 and the “responsible party,” how a foreign national without an SSN/ITIN applies for an EIN, the EIN confirmation letter, opening a U.S. bank account, overseas wire transfers and the source-of-funds chain, MyTax Illinois and IDES registration, local business licenses, Form 5472 and BOI.

Lease

Commercial lease essentials

Term and renewal, gross versus net leases (NNN), common area maintenance (CAM), security deposits, personal guarantees, use clauses and zoning, build-out and TI allowance, subleasing and assignment, early termination and default; the lease as evidence of “actual investment,” leases conditioned on the visa and escrow, and aligning the lease term with the visa term.

E-2 investment: from company to visa

The table below shows a common sequence for a newly formed business applying for E-2. In practice some steps happen at the same time (for example, negotiating the lease while preparing the business plan), and the sequence is somewhat different when buying an existing business. The key point: when you file the visa application, the funds should already be invested or in the process of being invested, not merely sitting in an account.

Step	What to do	Related page
1. Choose the state and entity type	Where the business will actually operate and whether you choose an LLC or a corporation determine which state’s law applies and how the business is classified for tax purposes.	LLC vs. corporation
2. Form the LLC or corporation	File the formation documents with the Secretary of State and designate a registered agent and registered office in that state.	Forming an LLC in Illinois
3. Operating agreement or bylaws	Set out ownership percentages, management rights and voting rights; this is the foundational document showing treaty-national ownership and the investor’s control of the business.	Operating agreements
4. Obtain an EIN	Apply to the IRS for an employer identification number, which you need to open accounts, hire employees and file taxes.	EIN and bank accounts
5. Bank account and capitalization	Open an account in the company’s name, wire the investment funds from the investor’s account, and keep records of every transfer to prove the source of funds and how they were invested.	EIN and bank accounts, E-2 source of funds
6. Commercial lease or purchase contract	Sign a lease for the business premises or a contract to buy a business; for a transaction conditioned on visa approval, the funds can be held in escrow and released after approval.	Commercial lease essentials
7. Business licenses and tax registration	Depending on the nature of the business, obtain local business licenses, register for state taxes (such as sales tax and employer withholding) and register for unemployment insurance.	Tax registration
8. Business plan	Explain how the business will operate, the hiring plan and five-year financial projections, addressing “non-marginality” and the proportionality of the investment.	E-2 business plan
9. DS-160 / DS-156E filing and interview	Complete the DS-160 online, prepare the DS-156E and the full E-2 package as the embassy or consulate requires, and schedule the interview.	DS-160, E-2 hub

Investors who are Chinese nationals, for example, must first acquire the nationality of a treaty country before applying for E-2, and should note the 3-year residence requirement for those who acquired nationality through investment; see E-2 through third-country nationality. If the company was formed before you acquired treaty nationality, check at the time of application that the ownership records and proof of nationality line up.

LLC or corporation: considerations for E-2 investors

Both forms are common in E-2 applications. The consular officer reviews ownership, control, investment and operations, not the entity form itself. The following covers principles only; confirm the tax aspects with an accountant in light of your own situation.

Item	Limited liability company (LLC)	Corporation
Formation documents	Articles of Organization; internal rules are set out mainly in the operating agreement	Articles of Incorporation, bylaws, shareholder and director resolutions
Proof of ownership	Members and percentage interests in the operating agreement; member register	Stock certificates; stock ledger
Management structure	Member-managed or manager-managed, relatively flexible; voting and management rights can be arranged by agreement	Shareholders elect directors and directors appoint officers; a relatively fixed structure
Default federal tax classification	A single-member LLC is by default a “disregarded entity,” and a multi-member LLC is by default treated as a partnership; it can elect on Form 8832 to be taxed as a corporation	Taxed by default as a C corporation, with tax at the corporate level and again on shareholder dividends
S corporation election	An S corporation may not have nonresident alien shareholders, and the number and types of shareholders are also restricted. Whether an E-2 investor is a nonresident alien for tax purposes depends on their time in the United States; see Tax residency.
Reporting when wholly foreign-owned	A foreign-owned single-member LLC is treated as a corporation for certain federal reporting purposes and must file Form 5472 with a pro forma Form 1120	A U.S. corporation with foreign ownership above a certain percentage may also have a Form 5472 filing obligation
Typical fit (in general)	Few investors; flexible contractual arrangements desired	Plans to bring in multiple investors or employee ownership, or operations that call for more formal governance

For details on tax classification, S corporation restrictions and Form 5472, see the tax section and Forming an LLC in Illinois. It is best to decide on the form with your accountant before formation; changing it afterward adds procedures and cost.

How company documents map to E-2 review

The U.S. Department of State’s Foreign Affairs Manual, 9 FAM 402.9, is the main authority consular officers apply to E-2 cases. Each of the review points below must be supported by company documents:

Nationality and ownership: The business must be at least 50% owned by nationals of the treaty country. The investor usually shows control of the business through ownership of at least 50%, but can also have operational control through a managerial position or other corporate arrangement; merely holding a management title without actually controlling the business does not qualify. The operating agreement and ownership records must make this clear.
Funds at risk and irrevocably committed: An investment means the funds are subject to business risk, and the commitment must be real and irrevocable. Funds sitting in an account that can be withdrawn at any time generally do not count as an investment.
Conditional transactions and escrow: A purchase conditioned on obtaining an E-2 visa can still satisfy the “irrevocably committed” requirement, as long as the funds are held in escrow and released or transferred once the condition is met. The condition clauses in the lease or purchase contract must be consistent with the escrow arrangement.
Loans: Commercial loans secured by the business’s own assets do not count toward the investment amount; only loans secured by the investor’s personal assets may count.
Non-marginality: The business cannot merely provide a minimal living for the investor and family; it should have the present or future capacity to create jobs or make an economic contribution, which must be shown through the business plan and operating records.
Developing and directing the business: The investor must personally develop and direct the business, and the management arrangements in the company documents must be consistent with this.

The formation documents, operating agreement, bank records, leases and contracts, and business licenses, together with the business plan, form the chain of evidence in an E-2 application showing that “the business is real, the funds have been invested, and the investor controls the business.”

Frequently asked questions

Can I form a company in the United States before I have a visa?

Yes. Forming a company does not itself require U.S. status, and many E-2 investors form the company, open an account and fund it, and sign a lease before applying for the visa. Note, however, that before you obtain the visa, your own business activities in the United States are limited by your visa status; consult a lawyer first about what you may do.

Can a foreign national form an LLC in Illinois?

Yes. Illinois law does not require the members or managers of an LLC to be U.S. citizens or residents, but every LLC must maintain a registered agent and registered office in Illinois (805 ILCS 180/1-35). The registered agent must be an individual resident of Illinois or an entity authorized to do business in the state.

Does the company have to be formed in Illinois?

Not necessarily. Generally you should consider where the business will actually operate. A company formed in one state and operating in another usually also needs foreign qualification in the state where it operates. This section focuses on Illinois; if your business operates in another state, the state-law parts must be handled by a local lawyer or registered agent, and we can handle the E-2 visa part as usual.

If I sign a lease and the visa is refused, do I lose the money?

That is exactly the problem that condition clauses and escrow arrangements are meant to solve. The State Department manual permits transactions conditioned on visa issuance, and where the funds are placed in escrow and released once the condition is met, they may still be recognized as invested. But how the condition is written, which amounts can be held in escrow and which have actually been spent must be worked out with the landlord or seller before signing; see Commercial lease essentials.

Do I still need to report beneficial ownership information (BOI) to FinCEN?

FinCEN issued an interim final rule in March 2025 and a final rule in August 2026 exempting companies formed in the United States from beneficial ownership information reporting; companies formed in a foreign country and registered to do business in the United States must still report. This area has changed frequently in recent years, so check the current rules on the FinCEN website before filing.

Can you find a business for me or recommend a franchise?

No. We do not match clients with or recommend investment projects. Once you have chosen an industry or target business, we can review the lease, purchase contract and franchise agreement and point out risks from the perspective of E-2 review.

Can we communicate in Chinese?

Yes. David Wang personally communicates in English, Chinese and French. Company documents and contracts are signed in English, and we will explain them clause by clause in Chinese; Chinese-language materials submitted to an embassy or consulate must be accompanied by an English translation.