So you’re planning to move to the United States and you’re going to purchase a business to do it. It’s a great idea, the problem is that the requirements are vague for an E2 visa, so let me give you some options.
In a perfect world, you would like to find a business that nets $50,000 of profit on tax returns and employees at least 2 Americans. Let me explain why that’s a tall order. Welcome to America, the land of opportunity and high taxes. If a small business is being advertised as having a $50,000 net profit, there’s a 99% chance that it won’t be on tax returns. In this country, and I’m not judging anyone because it’s hard to live here, if you are only netting $50,000 in your business you are going to have a tough time parting with taxes. So to reduce your tax liability business owners sometimes don’t declare all the cash that’s coming into the business. If they do then they run as many of their personal expenses through the business that they can. Some “add backs” are easy for the immigration department to understand, like interest, depreciation and amortization but usually there’s a host of questionable expenses that will not be acceptable to INS.
Another aspect that many foreigners don’t take into account is that they might have had sterling credit wherever they came from but here the US they are starting from scratch. Therefore, if the business has a lease to deal with, then it’s been my experience that landlords will still rent to them but they will require up to 6 months lease deposit upfront, since they have no credit history. Depending where you came from, get ready to fully appreciate OC’s landlords and rents. Orange County has rents anywhere from $3.00 to $5.00 a sqft so some quick math can tell you that a large chunk of your purchasing power could be tied up in a lease deposit. If you could buy a service based business or a business that was in an industrial park or office park, you will find the landlord much easier to deal with and the lease deposit will be reasonable.
It is possible to purchase an asset sale business for an E2. It will cost you more in immigration attorney fees but it might be worth it when you consider what we just covered. The attorney will present the application more like a start up business than an ongoing concern. If you do consider purchasing an asset sale ( a business that isn’t claiming to be profitable) then just be sure that the liabilities aren’t too deep and then the goal is just not to lose any or too much money while it’s operational.
The last option is the best option, if you can afford it, buy a better business. There are good businesses on the market that have clean books and records but they cost more so it’s a higher investment. However, if the business really appeals to you and you would consider it your dream job and you can afford it, then go it! Just remember that if they say the business nets $100k a year it still doesn’t mean that it will show on tax returns but you will have a better chance of showing the $50k a year net profit on that business. It’s been my experience that the bigger the business the less time for questionable business practices, like paying the employees cash to avoid taxes, pocketing the cash and over reporting expenses on the returns.
If you are thinking of immigration here to the US hire yourself a good attorney and good business broker (like myself!) and be prepared to spend some time here looking for the perfect business for you. It takes time find the right thing so don’t get frustrated and do as much of your own research as possible so you can stay informed of what’s out there and what’s selling. America is still the land of opportunity for many people and it can be for you, you just have to really want it.