In this article, we will discuss the investment amount for purchasing an existing business.
For details on how much to invest for a new startup business, click here
Understanding the E-2 Visa Investment Amount for Buying an Existing Business
No Fixed Minimum Investment
U.S. immigration law does not specify a fixed minimum investment amount for an E-2 visa. Instead, it requires that the investment be "substantial." Unfortunately, the term “substantial” lacks a clear numerical definition, making it difficult for investors to know exactly how much to invest. We understand that with tens of thousands of businesses available at varying prices, this ambiguity can cause significant stress and uncertainty.
Many investors worry about purchasing an existing business only to be denied the visa for not investing the right amount.
In this article, we'll explore some investment ranges for purchasing existing businesses to clarify how visa officers determine if an investment is substantial for an E-2 visa. By examining specific examples, we'll illustrate what constitutes a strong investment and what factors visa officers consider.
Key Considerations When Purchasing an Existing Business
Purchase Price, Financial Performance, and American Workers
The purchase price of an existing business is crucial but not sufficient on its own to meet E-2 visa requirements. When considering the investment amount, you MUST consider these two main factors:
- Business Financial Performance: Determine whether the business generates sufficient profits for the E-2 investor and their family to live comfortably in the U.S. This factor is part of the E-2 visa requirements and visa officers will evaluate an existing business’ past performance to determine the E-2 investor’s potential income.
- American Workers: Assess if the business can maintain and/or hire additional American workers, providing them with a livable wage. The E-2 visa aims to bring economic benefits to the U.S., so hiring American workers is essential.
Depending on the business's financial performance and payroll, additional investment beyond the purchase price may be necessary. While several factors determine E-2 visa eligibility, this article will focus on the above two main factors to help investors understand how much they should invest in an existing business.
Now let’s apply these two main factors (Business Performance and Job Creation) to the following investment ranges.
Existing Business with Purchase Prices of $100,000 or More
Purchasing an existing business with a purchase price of $100,000 or more, assuming it is the fair market value, could make for a substantial investment if:
- Financial Performance: The business's financial performance over the past few years generates enough profits to allow a comfortable living for the investor and their family. This depends on the cost of living in the area where the investor and their family will reside and the number of household members. The chart below provides a general example.
- American Workers: The business employs sufficient American workers. The employee payroll should demonstrate livable wage for the workers.
If these factors are met, then the business purchase price could be considered “substantial” and would make a promising E-2 visa application.
If these factors are not met, the business may be considered marginal (too small), and the investor may need to make additional investments to improve the business, increasing their investment beyond just the purchase price.
Businesses with Purchase Prices Below $100,000
From our years of experience evaluating thousands of businesses, many priced below $100,000 often have losses or mediocre profits. This does not mean they cannot qualify for the E-2 visa, but E-2 investors need to adjust their expectations regarding the investment amount.
Purchasing a business below $100,000 may not be considered a substantial investment if:
- Financial Performance: The business’s financial performance over the past few years does NOT generate enough profit for the investor and their family to live comfortably in the U.S. Comfortable living depends on the cost of living in the area and the number of household members. The chart below provides a general example.
- American Workers: The business does NOT employ a sufficient number of American workers or provide a livable wage for them. The E-2 investor is expected to create or maintain meaningful jobs for the U.S. labor market. What is considered meaningful jobs depends on a variety of factors, including the number of employees, wage levels, part-time or full-time workers, professional, skilled or unskilled occupations, etc.
If the business does not show strong financial performance or adequate employment of American workers, then it may be considered marginal and not qualified for the E-2 visa. In such cases, additional investments to improve the business will likely be necessary to present a viable E-2 visa case, increasing the total investment beyond just the purchase price.
ANNUAL INCOME FOR COMFORTABLE LIVING IN THE UNITED STATES
Conclusion
As you can see, due to these additional factors, the E-2 visa law cannot specify an exact investment amount. However, we have a clear methodology to evaluate whether an investment amount is sufficient for the E-2 visa. We have successfully applied these methods in over 600 approved E-2 visa cases so far.
Purchasing an existing business can be a viable path to obtaining an E-2 visa, but it requires careful consideration. If you'd like an evaluation of your investment amount for an existing business, we are here to help. Please contact our office to request a business evaluation.
Tailored Solutions for E-2 Visa Applicants
Our law firm specializes in providing in-depth knowledge and tailored solutions for E-2 visa applicants. We go beyond standard regulations to address unique business, visa, and logistical challenges.
- Real Strategies: Proven strategies that have helped hundreds of clients achieve E-2 approval.
- Expert Guidance: Our team has extensive experience with E-2 visas, offering step-by-step guidance.
- Referral Network: Access to a network of professionals who understand the E-2 process.