IN THIS GUIDE · Treat RRSP-sourced funds and a franchise's own requirements as two separate reviews
Start with the E-2 eligibility and application overview
Document the RRSP withdrawal and its tax treatment
Hypothetical example: a Tecumseh-area applicant plans to withdraw funds from a Canadian RRSP to help fund a franchise purchase. Retain the withdrawal statements and confirm the Canadian tax withholding and reporting treatment with a qualified tax advisor, since this is a different kind of fund source than employment income or a business sale.
Confirm the funds are genuinely the applicant's own and at risk
Trace the lawful origin of the RRSP savings, the withdrawal and the full transfer path into the proposed enterprise. Qualifying funds must be committed at risk, and the investment must be substantial relative to the actual business cost; E-2 has no universal dollar minimum. Separate these funds from any borrowing and inspect its collateral. A withdrawal alone does not establish a qualifying investment. Depending on the actual terms, qualifying investment-in-process or escrow arrangements may be available; do not assume every purchase must close unconditionally before review.
Review the franchise agreement's own control and territory terms
Review the franchise’s operating procedures, supplier terms and territory restrictions alongside the applicant’s real authority to develop and direct the enterprise. Confirm the applicant’s treaty nationality and at least 50% enterprise ownership by nationals of the relevant treaty country. Franchise standards do not automatically defeat control, but owning a franchise does not automatically establish it either. Canadian citizenship generally requires an E visa for this route, and the applicant must intend to depart when E status ends.
Confirm non-marginality using the franchise's own financials
Use location-specific revenue, expenses and staffing assumptions to assess a real operating business rather than relying on system-wide franchise marketing. The enterprise must have present or future capacity beyond a minimal living for the investor and family, or satisfy the applicable significant economic contribution standard; forecast future capacity generally should be realizable within five years of normal activity. There is no EB-5 ten-job quota for E-2. Explain how the actual opening budget and available working capital support the forecast.
Seller financing secured on the business is not investment
The investor must be coming to develop and direct the enterprise, ordinarily evidenced by holding at least half the ownership or by other operational control such as a managerial position or a legally recognised device giving control. The investment must be substantial in relation to the total cost of the enterprise, so the meaningful figure is the ratio between what has been committed and what this particular business costs, not the size of the deposit. If a loan funds the repairs, identify what secures it, since collateral pledged against personal assets can be treated differently from debt secured only by the enterprise. Personally secured or unsecured loans may require a different assessment, including lawful source and path; seller financing is not a label that resolves those questions. Share registers, operating agreements, voting provisions, and closing documents establish who owns the enterprise and whether treaty nationals hold the required majority. The investment must be committed in a manner that is irrevocable and exposed to loss; a plan cannot rest on funds that remain freely withdrawable. The enterprise cannot be marginal, and qualifying control must place its development and direction with the investor rather than leave a passive or nominal interest.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.