What is An E2 Business Visa?

E2 VIsa Buyers Target South Florida Businesses

When it comes time to sell your business in South Florida, a large amount of potential buyers are overseas individuals wanting to legally enter and live in the United States by obtaining an E2 Visa. Such E2 Visa buyers seek to purchase businesses in many different industries with a wide price range. Most want to live the American dream and provide a better life for their families, and South Florida is a common destination. Let’s explore and discuss the E2 Visa system and its¬†instrumental role in today’s South Florida business sales.

Defining an ‘E2 Visa’

An E2 Treaty Investor Visa (commonly referred to as an ‘E2 Visa’) is a specially created non-immigrant visa for foreign entrepreneurs from countries of origin who have a Treaty of Trade and Commerce with the United States. Once obtained, the E2 Visa holder (and their family) may legally reside in the United States for up to two years (which is renewable).

Most E2 Visa Applicants Obtain Immigration Attorney

Often there are delays in the visa application process along with many bureaucratic hurdles to climb. For that reason the vast majority of serious E2 Visa applicants obtain a local immigration attorney for assistance. It is imperative that a professional business broker communicate properly and knowledgeably with the immigration attorney, and have immigration attorneys available to recommend.

What Business Types Qualify for an E2 Visa?

There are no industry specific limitations or requirements on the business in order to qualify an E2 Visa. The two general requirements are that the business be a ‘bonafide’ business enterprise (or a ‘bonafide’ new business opportunity) and that the applicant must put forward a ‘substantial’ amount of financial or human capital toward the purchase.

Establishing that the Subject Business is ‘Bonafide’

  • In order for the business being sought by the E2 Visa applicant to be deemed ‘bonafide’ by the immigration authorities, the business typically needs a sufficiently large amount of sales to be deemed viable and functioning.
  • Further, it needs to have a sufficient level of profits to support an individual or family.
  • The tax returns of the business should reflect such sales and profits..
  • Other documents such as w2 records, profit and loss statements, bank statements, equipment lists, and business licenses also may demonstrate the ‘bonafides’ of the business.
  • Additionally, the lease agreement is another factor used to determine if a business is ‘bonafide.’
  • Often, the length of the lease agreement of the subject business must be a minimum of two years in length to ensure it will be viable and functioning in the long term.
  • A new business opportunity must have a detailed business plan, a signed lease, and proof of deposited money in escrow to fund the business in order to show that it is ‘bonafide.’

Establishing that the Investment in the Business be ‘Substantial’

Generally the E2 Visa applicant must commit at least $100,000 toward the purchase of the business in order to qualify for an E2 Visa. Importantly, the amount of capital must be ‘at risk’ (or an arms length transaction) for the E2 Visa applicant. This prevents a ‘sham’ purchase. It also precludes the purchase being solely contingent on a seller’s earn-out (where the purchase price is only actually paid based on unknown future sales or profits). The E2 Visa buyer may run the business in an absentee fashion if they are committing their own funds in a substantial way. The E2 Visa buyer, however, is restricted from working elsewhere except for the business that acted as the Visa sponsor.

E2 Visa Applicants May Invest Their Human Capital

E2 Visa applicants who will own less than 50 percent of the business must demonstrate that they will have operational control of the business in order for the Visa to be granted.  The E2 Visa applicant must be employed by the business in an executive or managerial capacity. Unskilled candidates would not qualify, so the E2 Visa applicant must convince the immigration authorities that they are highly skilled and will play an instrumental role in the operations of the business. This clearly is a more difficult hill to climb for most E2 Visa applicants, so an E2 Visa buyer without the funds to purchase should be viewed with extreme caution.

The E2 Visa Can Make Dreams Come True

A qualified E2 Visa buyer willing to commit a substantial amount of capital toward the purchase of a bonafide business enterprise may indeed be able to live the American dream. Likewise,  South Florida business sellers may realize their own financial dreams by understanding the E2 Visa process and finding the right E2 Visa buyer for their business.

Give Martin at Five Star Business Brokers of Palm Beach County a call today for a FREE evaluation of your business.