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Just Elementary, Inc. » Business Tips » How to Sell a Business to an E-2 (E2) Visa Buyer

How to Sell a Business to an E-2 (E2) Visa Buyer

If you are the seller of a business in the United State and you are considering selling to a buyer of an E-2 (E2) visa, here are some facts that you should be aware of:

What is an E Series Visa For?

The E Series visas are designed for foreign nationals who wish to immigrate to the United States to conduct business.

The Two Types of E Series Visas:

The first is the E-1 Treaty Trader Visa and the other is the E-2 Treaty Investor Visa.

The E-1 Visa is designed for business people who are conducting substantial international trade, in the form of import/export, between their home treaty country and the United States.

The E-2 Visa is for people who are investing in an actual operating business located in the United States that will require the investors full time presence to manager and operate.

Is the buyer Eligible for an E Series Visa?

To apply for an E-1 or E-2 Visa, a foreign national must be a citizen of one of the countries that are treaty partners with the United States are the only ones that are eligible for an E Series Visa.  There is more to it, than just making sure that the prospective E-2 Visa buyer is from a treaty country, you need to do homework on the actual consulate that the E-2 visa buyer is submitting an application to.

How Long is an E Series Visa good for?

E Series visa do not give permanent resident status, however, they can be continually renewed without any limits, providing the Investor or Trader is in compliance of the requirements.

What are the Requirements for the E-1 Visa?

Per the State Department Website:

  • The applicant must be a national of a treaty country.
  • The trading firm for which the applicant is coming to the U. S. must have the nationality of the treaty country.
  • The international trade must be “substantial” in the sense that there is a sizable and continuing volume of trade.
  • The trade must be principally between the U.S. and the treaty country, which is defined to mean that more than 50 percent of the international trade involved must be between the U.S. and the country of the applicant’s nationality.
  • Trade means the international exchange of goods, services, and technology. Title of the trade items must pass from one party to the other.
  • The applicant must be employed in a supervisory or executive capacity, or possess highly specialized skills essential to the efficient operation of the firm. Ordinary skilled or unskilled workers do not qualify.

What are the Requirements for the E-2 Visa?

Per the State Department Website:

  • The investor, either a real or corporate person, must be a national of a treaty country.
  • The investment must be substantial. It must be sufficient to ensure the successful operation of the enterprise. The percentage of investment for a low-cost business enterprise must be higher than the percentage of investment in a high-cost enterprise.
  • The investment must be a real operating enterprise. Speculative or idle investment does not qualify. Uncommitted funds in a bank account or similar security are not considered an investment.
  • The investment may not be marginal. It must generate significantly more income than just to provide a living to the investor and family, or it must have a significant economic impact in the U.S.
  • The investor must have control of the funds, and the investment must be at risk in the commercial sense. Loans secured with the assets of the investment enterprise are not allowed.
  • The investor must be coming to the U.S. to develop and direct the enterprise. If the applicant is not the principal investor, he or she must be employed in a supervisory, executive, or highly specialized skill capacity. Ordinary skilled and unskilled workers do not qualify.

Does the E-2 (E2) visa buyer have to pay all cash?

Not necessarily, but if the purchase price and the amount of the investment is not that high, then it is more likely that the consular office reviewing the application will want to see a higher percentage of cash injection into an E-2 (E2) visa purchase.

What is the definition of ‘substantial’ when it comes to being large enough of an investment to qualify?

This answer varies with each consulate office.  For example, The consulate in the Philippines may think that $100,000 is substantial enough to qualify, while the consulate in the U.K. may say $250,000 is enough to qualify.

Why do things vary from consulate to consulate?

The reason that things are different at each consulate is that they are each managed independently, and thus they are free to interpret requirements as they see fit.  Each consulate office, which falls under the jurisdiction of the Department of State, handles applications differently.  Getting competent assistance can be a big key to succeeding in getting an application approved.

How long will an application take?

Be prepared for an E-2 Visa Application to take a long time.  Again, this varies by consulate, so you need to do some homework on the consulate and find out what their processing times are.  Ask about recent files, and how long tghey have been in the queue.

For an E-2 Visa, the investor can start a business, or buy an existing business.  Oftentimes, the applicant for an E-2 visa will be looking at an existing business.  Be aware that a Bulk Sale Escrow for a business with an E-2 visa buyer can take 4-6 extra months due to the nature of the application process with the consulate office of the foreign national.  This is where doing your homework can help, as again, some consulate are quicker to act then others.

For more information how Just Elementary, Inc. Commercial Business Brokers can help you with small business needs, email or call (323) 213-9193


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