Buying a U.S. Business for E-2 Visa Purposes

While there are many reasons a non-U.S. citizen or resident alien may wish to purchase a company in the United States, a potential E-2 visa application is a common one.

An E-2 visa applicant must demonstrate that they have put their funds at risk and will be dedicated to the development of the enterprise, it is generally difficult to obtain an E-2 visa with an investment of less than $100,000 to $150,000. Depending on the type of business, the amount invested may vary considerably.

Once you have discussed your immigration plans with immigration counsel and have located a company you wish to purchase, consider the following:

1.   Have sufficient cash on hand. The first step is to make sure you have the cash you will need to purchase a business outright to meet a ‘substantial investment’ requirement of the E-2 visa and to pay the bank, accountant, CPA, and lawyer’s costs on the transaction. E-2 visas limit the amount of financing permitted on a purchase, so it is important to keep this in mind when structuring the business acquisition.

2.   Create a due diligence team. Before you get too attached to purchasing this particular business, be confident you have a good team of professionals to help you determine the strength of your investment. You will need a professional accountant to evaluate the business’s written financials and you may require an independent business valuation firm to help you determine the business’s true value. Your acquisitions attorney can also help you limit your liability for things that may have happened in the business before you purchased it. Even if your primary motivation for purchasing a business is visa-related, you are looking at a very significant investment and you should make every effort to purchase a viable business you can continue running and profiting from for many years.

3.   Obtain great documentation. When a business changes ownership under any circumstances, thorough documentation is important. Visa-related transactions, in particular, require thorough legal documentation. Some of the documentary evidence you may need to submit with your visa application will include asset or stock purchase agreements, partnership agreements, capitalization tables, employment agreements, letters of intent, memorandum of understanding, bylaws, meeting minutes, articles of organization/incorporation, etc. It is important to work with a good attorney who will help you fully understand the written terms of each agreement before you sign. The right attorney will help you eliminate ambiguities that could otherwise cause problems during or after the closing of the transaction.

If you’d like help navigating this process, contact us!

buying american business

Buying an American Business

Buying a business, even to support a visa application, is a version serious purchase.

Sara Sharp