Assess the business under the applicable economic standard, not the chosen draw alone.
Read the full operating picture
Identify relevant income, costs and contribution. Do not assume retained earnings guarantee nonmarginality, but do not equate the owner’s compensation decision with the enterprise’s entire capacity either.
The investment showing still has to stand on its own: treaty nationality based on citizenship, at least fifty percent treaty ownership, substantial capital irrevocably committed and at risk, a real operating commercial enterprise, non-marginality, and genuine development and direction by the investor. With equal partners, each can qualify if the agreement gives each partner a genuine role in directing the business; a fifty-percent owner who has negative control, meaning nothing can happen without their consent, can meet the test. The investment must be substantial in proportion to the cost of this particular business; there is no fixed minimum, and a proportionality analysis compares the amount committed to the total price of establishing or buying the enterprise. The reviewer looks at whether treaty nationals hold at least 50 percent of the enterprise, whether the applicant is a treaty national, and whether that individual will actually develop and direct the business through ownership, a managerial position, or another documented control device. The investor must also develop and direct the enterprise, which at half ownership is normally accepted, though a deadlocked structure with no decision-making mechanism invites questions worth avoiding.