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Visas Strategy Defined For Those Thinking Of Buying A Business

You are looking to invest in or outright purchase a business here in the United States.  Currently, the dollar is weak relative to other foreign currencies, and purchase prices for Businesses are quite low, due to fact that the price is based off the most recent sales.  This, of course, is because current market prices are based off the most recent sales prices.  And these prices of course have been declining drastically over the past few years.

So the time is good for investing.  The problem is that you are not a U.S. citizen or legal resident and need to travel here to investigate the market and business opportunities and do not necessarily wish to immigrate to the U.S., or wait for the long immigration process.

This article briefly discusses various mechanisms for you to do so.  While managing the maze of the U.S. visa process can be daunting, it need not be.  Of the dozens of visa types, we focus here on the major visas concerning business-related activities.

The B-1 Business Visa

First, you need to get here.  There are two primary, non-immigrant visas that will allow you to do so: the B-1 and B-2 visas.  While either may be used to conduct business, the B-1 is specifically for business activities (although you cannot work in the U.S. while on a B-1) and allows the successful applicant to stay within the U.S. for up to three months, although extensions may be granted.  You can find applications online or at your local U.S. consulate, as well as a list of documents required, generally a DS-160 form, a valid passport that will allow you to travel to the U.S., and a properly formatted photograph to be used by the consular official if your visa issues.  Of course there are fees associated with the application.

Most importantly, however, is the interview process.  Once you have applied for the visa, you will also need to schedule an interview time with a consular official.  The availability of interview slots varies greatly from country to country and consulate office, so the earlier you can determine the availability of the interview, the better for purposes of planning your trip to the U.S.

As with any non-immigrant visa application, the interview process is the most important part of the application and will ultimately determine whether a visa issues.  The interviews are conducted at the embassy or local consulate by officials and, given the high-demand for visas, are very short, usually just a few minutes.  In those few minutes, however, you must convince the consulate official of your “intent to return.”  What the official will assess is your honesty and proof of your intent to return to your home country on or before the expiration of your visa.  Accordingly, it is very important to know exactly what you will be doing in the U.S. and show proof to the official of why you must return to your home country (you have a business in your home country, employment, family, etc.).

Having a knowledgeable attorney can greatly ease the process and better ensure your chances of obtaining a visa.

The E-2 Investor Visa

So now you have successfully been issued a B-1 visa, have travelled to the U.S., investigated the market and are ready to purchase or invest in a U.S. business.  Of course, a B-1 visa will not work for you now, since you will have to be here to work for far more than three months to ensure the success of your new business venture.  This is when you need to enlist the services of a qualified business broker to help you find the right business for you.

There is a significant amount of confusion over the E-2 visa and what, exactly, is required to qualify for this visa.  Regardless of your country of origin, the E-2 visa (also known as the treaty investor visa) is available to you.  This visa requires you to invest at least $50,000.00 into a U.S. company (which can be a new venture) or otherwise a substantial enough to maintain the entity as a going concern.  Accordingly, the larger the business, the larger the investment must be.  The visa can be renewed every two-years indefinitely so long as you continue to operate the company and it remains a going concern.  Importantly, the E-2 is not a path to permanent residence, although you can apply to change your status while here.  You also can petition for close relatives such as your spouse and children under the age of 21 to receive a “derivative E-2” visa that will allow them to accompany you to the U.S. during your entire stay while engaged in the business venture in which you have invested.

Only those entrepreneurs who reside in treaty countries are eligible to apply for an E-2.  A complete list of treaty nations can be found at the Department of State’s website.  Treaty nations include most European, Latin American, and major Asian countries including Japan, Korean, Singapore and Taiwan (but not the People’s Republic of China including Hong Kong and Macau).

There also exists the EB-5 immigrant visa that is intended to lead to permanent residence, but the investment requirements are far larger, i.e., a minimum of $500,000.00 into an enterprise that will keep or save at least 10 American jobs.  Furthermore, the investment must be made in enterprises in certain economically depressed areas of the U.S.  Unlike the non-immigrant E-2 visa, direct involvement with the operation of the company is not required.

Visas and Business Investment

So, in sum, for those entrepreneurs looking to obtain visas to the U.S., the B-1 is a fairly easy, short-term visa to explore the market, negotiate contracts, attend trade shows, and other related activities.  If you are interested in staying a longer period of time and actually invest in and operate a company here, then the E-2 is a good option provided you are from a treaty nation.  Finally, for those entrepreneurs wishing to immigrate here permanently and that are not from a treaty nation, the EB-5 is perhaps your best option.

To be sure, there are several other non-immigrant and immigrant visas that we will cover in up-coming articles that are available to foreign investors, as well as best practices in finding and acquiring profitable ventures within the United States.  But without a doubt, if you are looking to invest in or purchase a business in the U.S., now is a great time to do so.  Knowing which visa to apply for and the process, however, must be part of your overall business plan.

About The Authors:

Christina Lazuric is an Orange County Business Broker who shares her broker experiences with BizBen readers and has had varied direct small business experience in the past but now assists small business owners sell their business and offers business buyers find their dream business to operate. Phone Christina direct at 949-257-7823.

Categories: BizBen Blog Contributor, How To Buy A Business, Legal Topics

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Mark Chatow, Esq.: Legal Services For Buying, Selling Businesses

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Joe Sandbank, Esq. - Legal Services

I have provided legal counsel to business buyers, sellers and brokers for over 17 years. With prior experience as a business broker and SBA loan officer, Joe brings both a practical and legal approach to all aspects of the business acquisition process.

Willard Michlin, CPA, Certified Fraud Examiner, Due Diligence Services

Willard Michlin, CPA #106752, offers buyers step by step training & assistance in doing Due Diligence Services when they are thinking of making an offer, or are in process of investigating a business purchase. He helps to determine the actual net profit even when there is cash. Call 805-428-2063.

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