One of the best investment options for securing an E-2 visa is purchasing an existing business. Such purchases make great E-2 investments because you can easily demonstrate to the adjudicating consulate what the business is worth, what the projected revenue and profits are, and whether your investment is substantial. While purchasing an existing business is a compelling path, there are some important questions to keep in mind when considering this option.
How long has the existing business been operating?
If the business has been operating for less than two years it may be difficult to establish the true value and nature of the business. We recommend purchasing businesses that have at least three years of federal tax returns available.
How much gross and net revenue must the business generate?
There is no particular number required, but it is important to show that the business will enable you to live comfortably in the US. The business should generate at least $50,000 in net revenue per year. If it does not, it is important to explain how you will develop the business to get to that point.
Are there any types of businesses that are better to buy?
While the government does not privilege any particular types of businesses, there is a preference for businesses with real assets. That means that businesses that have something to sell, rather than merely a service, such as a consulting service, are preferred. The government is more likely to believe that a restaurant will continue its sales pattern under new ownership rather than a service-oriented business that is more dependent on personal relationships, such as a consulting business or accounting firm.
How are you financing the purchase of the business?
Although you are not starting a new business, the E-2 requirement to make a substantial investment in the business continues to exist. If the purchase price is below $25,000, you should plan on making additional investments to improve the business. If the purchase price is expensive, it is important to commit real cash to the business. If you are financing the business with a loan, you should plan on spending some capital on the business. If the loan is based on collateral that you personally own that is also sufficient.
To discuss your questions about purchasing a business in the US and applying for an E-2 visa please schedule a call.