Buy an Existing Business or Start a New Business With an E-2 Investment Visa?
A constant question our potential client faces is whether their E2 investment funds should be spent on an existing business or used to start a new business? Either way, to qualify for an E-2 Investment Visa, the following criteria must be met:
Active Commercial Enterprise: An active commercial enterprise is a business that offers either goods or services, or both – that must be defined as such to qualify as an E2 Visa Investment business. Nails salons, coffee shops, and supermarkets with banks inside, fall under these categories. A real estate investment does not, as it is considered a “passive investment’.
Substantial Investment: USCIS regulations do not indicate a specific investment amount, though it must be substantial. Depending on the type of business, it could be as little as $50,000 USD, although, most investments average at least $100,000 USD.
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Buying an existing business versus starting a new business:
The decision to buy an existing business or to start a new business is very personal. Some E2 Investment Visa applicants prefer to buy an existing business. Presumably, the business already comes with built-in clientele, furniture, equipment, inventory, and staff. Other applicants want to invest in a start-up business based on their own clear vision that can only be made a reality through
careful planning and execution. One of the biggest advantages of buying an existing business from an E-2 Investment Visa standpoint is that the investment amount can be easily calculated and identified by the purchase price. Buying a business is an excellent option for an E-2 Investment Visa if the business is profitable and has employees. Typically, three full-time employees or the
equivalent are sufficient in terms of employee numbers. There is no requirement for the
business to grow further. In terms of profitability, the government is not looking for a specific
number but rather an indication that the company is viable and can continue to generate
profits and sustain its employees. The number of employees can not include the E-2 investor
or their family members. If you buy a business that has been operational for two years and
profitable, you can submit tax returns to the Consulate instead of a business plan.
At risk: The investment must be “at risk”. If purchasing a business, “at risk” means that the applicant must have already purchased the business or at least deposited the investment funds in an escrow account that’s pending approval of the E-2 Investment Visa. Number of employees: A staff of no fewer than five employees are required at the end of five years. If you have a large business, you must employ the number of workers that match the business classification.Starting a Franchise for an E-2 Investment Visa in the U.S.: Consulates love franchises for E-2 Investment Visas. This is primarily because they require a sizeable objective
investment in terms of the franchise. Franchises, at times, have existing brand recognition and they often provide training and support.
Starting an E-2 Business:
Buying a business or starting a franchise are excellent E-2 Investment Visa options. However, most of our clients start their own businesses. They start from scratch by creating a new entity and obtaining a federal tax ID, opening a bank account, buying inventory, leasing office space, buying equipment, developing a website, hiring employees, which includes proof by obtaining letters of intent or contracts to hire employees, marketing the company, and much more. Investments for E-2 Investment Visa start-ups are usually over the $100,000 USD mark with at least an initial spend of $50,000 USD.
We have listed some of your options and they are possible. The best choice for you depends on facts and circumstances upon which a trained and knowledgeable E-2 Visa immigration attorney can legally assess and advise.
Conclusion: The E-2 Investment Visa gives applicants a choice to buy an existing business or to start a new one. Applicants should consider the options that will align with their vision and achieve their ultimate goals. More importantly, the applicant should ask themselves if the business they want to invest in has to be new? Remember, E-2 Investment Visas have been approved for both new and existing businesses. Starting a new business may be
logistically more complicated but it should not be ruled out completely.
Visa to America, Inc., is a leading advisory and consulting firm for E2 Visa Investment eligible businesses. We provide free consultations to hundreds of families via Zoom. Contact us now at +1(202) 951-0802 or email us at email@example.com to schedule a free consultation with our investment experts today!