# Is my business going to get a visa? #

[Susie]

Hi

This is a thread to just show an example purchase of business, where we can discuss what Mr A should do to avoid problems in the future



Mr A Businessman asks

I am buying a business and cost is $85,000.00

Will I get a visa and what should I do ?

[victoria]

From the advice that we received there is no magic number, the business will be looked on the merits and its therefore feasible. What's the business in your scenario?

[Susie]

First, speak to a quailfied cpa accountant, ask to see the last five years sets of accounts and get accountant to do due dilligence. Get accountant to do five year business plan

Speak to you bank manager, show him contract, ask his opinion as to whether he feels the biz is viable

Do homework on immigration attorney, make sure they are members of www.aila.org or do search (see useful links) on expats voice

If and when you decide to put offer on biz, set your own contingencies

for example. I offer xxx subject to ; Visa approval, satisfactory due dilligence, subject to first year end account showing profit in line with previous years, a non compete claus (in otherwords, the seller cannot start like biz, within xx years or xx miles of the one you are buying)


You could also pay for biz in stages , for expample, 75% upon closing and balance 25%, due and payable after first year end trading in line with previous

In other words you can put into the contract as many contingencies as you want, whether the seller would agree is another matter


Anyone else got some ideas?

[DavidL]

Hi

This is a thread to just show an example purchase of business, where we can discuss what Mr A should do to avoid problems in the future



Mr A Businessman asks

I am buying a business and cost is $85,000.00

Will I get a visa and what should I do ?

Ignoring all the possible comments from a CPA, ALIA, BB, IA and any other abreviated people, how reasonable would it be to expect an $85k investment to support a family out here? People need to be realistic.

[Susie]

Ignoring all the possible comments from a CPA, ALIA, BB, IA and any other abreviated people, how reasonable would it be to expect an $85k investment to support a family out here? People need to be realistic.


Agree David,

Valid point, meed to invest a substantial sum, but

Just so you know this is a pretend posting, so lets pretend the biz cost $285,000

Have you got any advise you can add to what #Mr A businessman # should or could do to protect his investment, get a visa or other useful info

[chris]

In this pretend situation, can I pretend to throw my 5 cents in?
Lets assume it's an E2 route. If it's a husband and wife, I would probably recommend the wife goes for the visa and hubby becomes the spouse for employment purposes.
If the business is say a B2B or perhaps does business with local/state/federal govt, it would benefit more from the woman being at the helm than the man, simply because it would benefit from minority group advantages.
Also the husband, depending on qualifications could source outside employment by taking advantage of the spousal authority to work and that would hva e 2 benefits. First it would lessen the pressure on the business, especially a start-up or fledgling to fully support the whole family and secondly, the employment ought to be seen with one eye on sponsorship for GC/LPR status after which the E2 can be dumped.
Having said all that, I would move backwards about 30 paces to the beginning and pose the question, before buying business, talk to a VC/VA and determine which Visa would suit your circumstances, both business background/expertise and family circumstances. The right business on the wrong visa is as bad as the wrong business on the right visa.
On business purchase price, does that matter or is it the bottom line the business produces? You can have high investment low return businesses and low investment, high return businesses. Just remember Hewlett Packard started in garage!

[DavidL]

In this pretend situation, can I pretend to throw my 5 cents in?
Lets assume it's an E2 route. If it's a husband and wife, I would probably recommend the wife goes for the visa and hubby becomes the spouse for employment purposes.
If the business is say a B2B or perhaps does business with local/state/federal govt, it would benefit more from the woman being at the helm than the man, simply because it would benefit from minority group advantages.
Also the husband, depending on qualifications could source outside employment by taking advantage of the spousal authority to work and that would hva e 2 benefits. First it would lessen the pressure on the business, especially a start-up or fledgling to fully support the whole family and secondly, the employment ought to be seen with one eye on sponsorship for GC/LPR status after which the E2 can be dumped.
Having said all that, I would move backwards about 30 paces to the beginning and pose the question, before buying business, talk to a VC/VA and determine which Visa would suit your circumstances, both business background/expertise and family circumstances. The right business on the wrong visa is as bad as the wrong business on the right visa.
On business purchase price, does that matter or is it the bottom line the business produces? You can have high investment low return businesses and low investment, high return businesses. Just remember Hewlett Packard started in garage!

Chris,

I thought you were going to stop posting a couple of months back, what happened? Anyway, glad that you are back posting. :)
The spouse authorisation is a very good point and one could argue that anyone comming over here should setup this way. However, this isn't without potential problems i.e if the E2 visa holder were to a) die, b) do a runner with a young busty blond (this goes for both sexes I guess) or 3) end up on fraud charges or worse commit a serious criminal act as this would jeopardise the spouses position unless a) she could revive the main E2 holder and keep him on life support, b) dye her hair blond & get a boob job with some additional bodywork possibly (lets face it, this is becomming pretty common around here) or c) I can't think of a C at the moment.
I do belive that while the initial investment, is not the b all and end all of the visa application, it needs to be north of $125k.

[chris]

Yes I did take my bat and ball home. My blood pressure has returned to normal, so I returned.
Back to business... Yes your'e right on the extra marital issues and there have been a few. There is also the health area as well, which as Susie has posted a while back, a sick E2 visa holder and a spouse can be a recipe for nightmares.
Some have gone 50/50 on the E2 visas and been co-owners, but that gives you best and worst of both worlds.Once again it highlights what a crock this all this for making any sense of planning.
I couldn't even stab at what is an acceptable investment sum. Clearly London have many daggers, because thats what they appear to do when reviewing E2 applications, ie making stabs at what is acceptable. I would contend that the amount of $ investment correlates to the business being purchased or started. Many businesses are capital intensive, others are not. A lawn guy gets away with say $4000 for a mower plus $1000 for trailer plus another $1000 for gas trimmers, edgers, etc. Gas extra. In my business (embroidery, screeenprinting, etc) $10,000 would get you started on a simple single head embroidery machine, $40,000 for a 4-head m/c. Screen-printing you could be looking at anywhere from $5,000 upwards for equipment. Take a restaurant and your costs are probably even higher on equipment. One wonders whether the embassy has the brain cells to differentiate. I don't think they do. You also have this issue about the business suporting the family, plus job creation why? We live in a real world in the 21st century and business life isn't like that. I fear we're getting off Susies thread here. Pull us back on line please.

[pegasus]

Just looking at what is reported as passing the E2 embassy over the past couple of years (very scarce info this year sorry to say) the amount at risk should be around $150K and the owners benefit around $70K. Those numbers don't seem to have changed since I picked them up at a course attended by various USCIS processing centre staff (Vermont and Texas). The $70K comes from 2x the average salary of the state.
Take that as it is, the single most important point IMHO, is that the business makes sense on paper (spreadsheet etc etc) You must be able to articulate what it is your business will produce, by when, and of course how much profit it can earn (AKA tax due) If you do your P&L income projections conservatively and the expense projections aggressively AND the business still makes good money, you are halfway there. If you cant make it work on paper then get someones help to look at the biz through a microscope. I have yet to meet a small business that loses money on paper make money in real life, but theres always a first.
If you have done the Cash flow projections right and the market cycle analysis then you are in a good position to project your potential capital required to run the business. Remember.... even if you buy the most profitable business you still start with ZERO in the bank.
To cut this long story shorter
For small Businesses, having bought your biz you then need capital to run it approx 1/3 then you need cash to live, add another 1/3, for budgetary purposes. If you end up not needing that amount in provisions Great. you still have the cash.

B rgds

Neil

NB NO business is better than a BAD business when you are starting out

[victoria]

Whilst I completely agree that in the majority of cases 100K is going to buy b#gger all & I would def think twice before launching yourself into this painfully long winded process for a 'small' investment, I know of someone with what is seen as a very healthy application who invested less than 100K because of right time right place etc.

Personally we were in a different situation given we were applying for a start up but we invested significantly less than 100k (still felt like a bloody lot of money!!) and we didn't get a single question about the level of investment.

[Emmalee25]

Yep!
It does seem to be down to figures of return rather than overall cost! I just wish that the 'substantial sum' was stated as above $xxxx. to avoid confusion, a substantial amount to one person could be pocket change to someone else!

Emma x

[chris]

Isn't it a bit like the story of the miller who gave his 3 sons a gold coin. One dug a hole and saved it, the other blew it and the other used it wisely to make more money. The E2 is a little like that, in human terms. Joe A could invest $300K in a mediocre business, have no business savvy and lose the lot, Joe B could invest $100K in a start up, have business savvy and make a success. It's should not be just about dollar amounts. It's the individual behind the money thats more important. Unfortunately, it really takes a business savvy person to know a business savvy person and thats where the whole E2 approval system falls flat on its US fanny.

[InnVic]

The sum invested also has to be "substantial" in relation to the price of the business. $150,000 may seem like a good figure if the business is priced at say $200-250K - but unlikely to be approved if the business cost is $500K. Its all about proportionality.

Chris' point is valid - many people who have never operated their own business before (and many who cannot even balance a check book!) think the E2 is the "easy" way to a life in the US. The lure of the "American Dream" makes the most unlikely people take the risk. Perhaps the E2 process should actually be HARDER to save them from themselves. On the downside more people could be denied their Visa - but on the upside they could save thenselves a huge financial loss.

[Emmalee25]

But most people that I have come across have bought the business outright! so cash for the whole thing!!
I definiately dont think the application process should be harder, but like Chris says, maybe the people interviewing should be looking for someone who can succeed rather than someone looking for year round sun/or snow!!!
Em x

[Susie]

If he buys the business in his name only and gets the E visa and wife dependant visa, then

Should anything happen to Mr A and he sadly dies then Mrs A will loose her visa and have to leave the USA asap.

If Mrs A inherits the business, as the company was bought in Mr A's name only, then Mrs A will have to pay inheritance tax on the asset.

She can inherit the business but NOT his Visa status, so not allowed to stay to run the company

So it may be better for Mr and Mrs A jointly purchase the business


That being said,

Should Mr A buy the business in his name only, Mrs A can get work autho, maybe her emplyer will be prepared to sponcer her for green card, then husband would also get green card

[STEVE T]

hi all, just my two penneth, i have found most of us brits dont admit to the businesses we purchase over here would,nt fetch anything in the uk , i think a stage payment for any investment is the way to go in the us ,i knew the business i purchased ,i could make better because i know the field but my god have i had a arse kicking , over their so called moralistic and religous approach to business .I know the lawyers dictate the prices we will pay to live the dream because the american way is monie for as little effort as possible, i have found the expats site to be a bit depressing at times but have always read the input , i wish i had known the site 2 years earlier , susie and you guys always shoot straight which is how it should be, i know i have gone of the path of investment subject but my input is buy for as little as possible ,because we brits are capable of turning anything around we are true entrepenurs , buy in a business you know and be prepared for more hits along the way, on apositive note i am now beginning to do good, with my lithuain ,russian bulgarian tile guys 7 teams of american guys gone , fired and disapeard , so much for employing americans for my visa , nobody told me that when selling me a business in construction in florida, the top and bottom of the bigmove over here is you dont meet many poor brits and lifestyle is great, but we all need to open up more on sites like this , i am as bad as any brit we were,nt brought up to moan , get on with it with head down, the truth is the harder you sweat the more luck you have anywhere, hopefully contribute more from now on thanks to you all stevet