IN THIS GUIDE · Gifted capital and investor control
Start with the E-2 eligibility and application overview
Describe the real arrangement
Identify whether the transfer is an unconditional gift, a loan or a payment in exchange for an ownership interest. These arrangements have different facts and consequences. The documents should reflect the actual understanding, including any repayment or control rights, rather than assigning the most convenient label to a family transfer.
Connect donor source and transfer
Organize evidence of how the donor obtained the money and how it reached the investor. A gift statement can explain intent but does not by itself show lawful source or completed delivery. Preserve bank records and the underlying source documents appropriate to the donor’s activity, with explanations for intermediary accounts.
Establish the investor’s authority
Show that the investor possesses and controls the capital being committed. If the donor retains decision rights, receives shares or can demand repayment, identify that accurately and review its effect on the case. Funding a relative’s business does not automatically make the relative the qualifying owner or establish the enterprise’s treaty nationality.
Follow the gift into business risk
After the investor receives the money, trace the qualifying investment into the enterprise. Gift completion and business commitment are separate events. Document purchases, transfers and binding arrangements, and distinguish personal reserves. The business still needs a substantial investment, a credible operation and capacity beyond marginal support of the household.
Complete the gift before treating the money as the investor's
An intention to give is not a gift, and files frequently describe funds as gifted while the transfer remains partly informal. Establish that the transaction has actually occurred and is documented: a written instrument recording the gift and its date, the funds leaving the donor's account, and the funds arriving in the investor's own account. Where the donor proposes to pay a supplier or a seller directly on the investor's behalf, that is a different arrangement and should be documented as what it is, because a payment that never passes through the investor's hands raises the question of whose investment is being made. Hypothetical example: a founder acquiring a garden-centre nursery whose parent pays the vendor directly has a transaction to explain that would not arise had the funds been given first and paid onward by the investor.
Check that the gift carries no strings that undermine control
The requirement that the investor develop and direct the enterprise sits uneasily with an arrangement in which the person providing the money retains a say over how it is used. Ask what the donor expects. Where a family member has been promised a role, a share of profits, a veto over significant decisions, or the ability to require repayment in some circumstances, the arrangement is not a simple gift and its terms may bear on both the source analysis and the control question. Establish the position candidly and document what is actually agreed rather than what is convenient. Where the donor genuinely wants an interest in the business, that is a legitimate commercial arrangement and should be structured openly, but it needs to be assessed for what it is rather than presented as a gift with an understanding attached.
Ask the donor directly, and separately
Families answer these questions differently depending on who is in the room, and the investor is rarely the right person to establish what the donor intends. Where possible, have the donor speak to the adviser themselves. The questions are simple: is repayment expected, is any return or role expected, does the donor regard the money as still theirs in any sense, and would they want it back if circumstances changed. An honest answer given early is straightforward to accommodate. The same answer emerging later, after the arrangement has been described as an unconditional gift, is considerably harder to deal with.
Sources reviewed 2026-09-07. This guide covers a preparation focus; it is not an individual eligibility assessment.