The E-2 develop and direct requirement explained

Under 9 FAM 402.9-4(B)(5), the applicant must be coming to the United States to develop and direct the investment enterprise. The State Department's guidance and USCIS both interpret this to require that the investor have operational control over the enterprise, not merely an ownership stake or an advisory role.

In practice, the standard has two parts. "Develop" means actively growing, building, or managing the enterprise's operations. "Direct" means holding a position of authority from which the investor makes policy-level decisions about staffing, finances, strategy, and day-to-day management. The clearest evidence is majority ownership, because 9 FAM 402.9-4(B)(5)(a) presumes that a majority owner both develops and directs. Minority owners must show control through other means.

When the applicant owns more than 50 percent of the enterprise, the consular officer or adjudicator generally presumes develop and direct is satisfied. The business plan should still describe the applicant's operational role clearly, but the ownership structure does the heavy lifting.

Minority owners face a different standard. According to 9 FAM 402.9-4(B)(5)(b), a minority investor can qualify if the record shows the applicant has operational control through other means, such as a board position with decision-making authority, a managerial title backed by an operating agreement that gives the investor control over key functions, or contractual authority over hiring and expenditures. A 30 percent owner who serves as CEO and holds veto rights over major decisions is in a better position than a 49 percent passive investor with no named role.

The key document for minority owners is the operating agreement or shareholder agreement. It must reflect actual authority, not ceremonial titles. Officers are trained to look for language that matches the claimed role.

The business plan carries a large share of the develop and direct showing. It should name the applicant's position, describe the specific decisions they will make, and explain the organizational structure underneath them. A plan that lists a generic management role without describing who reports to whom, how capital expenditures are approved, or how day-to-day operations are supervised leaves the adjudicator with unanswered questions.

The staffing section matters here. If the enterprise will have other managers or senior employees, the plan should show that the investor sits above them in the hierarchy and retains final authority over material decisions. A flat org chart where the applicant is one of several co-equal managers weakens the develop and direct argument.

Financial authority is also relevant. The plan should explain that the investor controls the business bank accounts, approves expenditures above a stated threshold, and has signatory authority on the lease and major contracts. These are concrete indicators of direction, not just ownership.

The regulations draw a hard line between an investor who directs the enterprise and an employee who happens to own a piece of it. Under 8 CFR 214.2(e)(2), an E-2 applicant cannot qualify merely as a skilled or unskilled employee. If the applicant's day-to-day role would look the same whether or not they owned any part of the business, the develop and direct requirement is at risk.

This comes up most often in franchise investments. A franchisee who will personally manage the location is in a strong position. A franchisee who plans to appoint a general manager and remain uninvolved in daily operations needs to show that strategic control remains with the investor, even if execution is delegated. The business plan should make this distinction explicit.

The most common problem is vagueness. Plans that describe the investor as "overseeing operations" or "managing the team" without specifics leave adjudicators unable to assess the actual scope of authority. Replace vague language with concrete responsibilities: approving weekly labor schedules, managing vendor contracts, signing client agreements, setting pricing strategy.

A second common issue is a mismatch between the organizational chart and the narrative. If the plan says the applicant is the decision-maker but the org chart shows a management company or a co-owner in an equivalent position, the two documents contradict each other. Consistency across the plan, the operating agreement, and any third-party management contracts is essential.

Third, plans sometimes fail to address what happens after the business scales. If the investor's plan is to hire a full management team and step back from day-to-day work, the plan should still show that strategic direction remains with the investor. Delegating execution is acceptable; delegating control is not.

Consular posts and USCIS expect documentary corroboration for the develop and direct claim. Useful evidence includes the operating agreement or corporate bylaws showing the applicant's authority, a signed lease or purchase agreement in the investor's name or with their personal guarantee, business bank account signature cards, and any contracts the investor has already signed on behalf of the enterprise.

For a startup, some of these will not exist yet. In that case, the plan should explain when and how the investor will assume formal control, and existing evidence of pre-investment commitments, such as a signed letter of intent for a lease or a deposit receipt, helps show the enterprise is real and the investor is in charge of it.