selling to foreign investors: immigration rules every business broker needs to know
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Immigrants represent about 30% or more of business owners in many parts of the U.S. And thousands of new immigrants come to the US each year to start or buy businesses. This presentation explains the basics of E-2 and EB-5 visa rules for business brokers who are interested in this growing market of buyers.TRANSCRIPT
- 1. SELLING TO FOREIGN INVESTORS:Immigration Rules Every Business Broker Needs to KnowAnn Massey BadmusCowles& Thompson, PC
2. IMMIGRANT ENTREPRENEURSHIP 3. Government Outreach to Entrepreneurs?http://www.uscis.gov/portal/site/uscis/eir 4. BASIC IMMIGRATION FACTS TO KNOW Visa (legal) status is not required to be apassive owner, as in buying stock, owning realestate, absentee ownership, or borrowingmoney. Need legal status to remain in the US. Self-employment requires work authorizationfrom the U.S. Citizenship & Immigration Service(USCIS) 5. OPTIONS FOR LEGAL STATUS IN USNonimmigrant TemporaryVisasImmigrant Visa(Green Card) 6. E-2 L-1 O-1 H-1BTreaty countrynationals (TN) onlyInvestors andessential skillsemployeesTN must own 50% ofbusiness andIndefinite durationSpouse can workNo visa quotaExisting foreignbusiness andaffiliated USbusinessManagers(L-1A) &SpecializedKnowledge workers(L-1B)Five (L-1B) to 7 (L-1A)durationSpouse can workNo visa quotaPeople in the arts,sciences or businesswho are at the top oftheir fieldsIndefinite durationSpouse cannot workNo visa quotaProfessional Workersin SpecializedOccupationForeign Nationalmust have aBachelors Degree inthe occupational fieldSix year durationSpouse cannot workAnnual quota of65,000 with 20,000master degreeexemptionsNon-immigrant Visas 7. Treaty Investor (E-2) Visa Program Nationality must be citizen of treaty country Investment must be substantial in a real, operatingenterprise Investor must have control of the funds, andinvestment must be at-risk Investor must have controlling interest (50% or more),and intend to develop and direct the enterprise Enterprise must be more than marginal 8. Treaty Investor (E-2) Visa - OwnershipOwnership may be as:an individual proprietor,majority partner, ormajority corporate shareholder.Investor must possess the nationality of the treatycountry (list of countries found at www.travel.state.gov) 9. Treaty Investor (E-2) Visa - InvestmentSubstantial investment - sufficient funds to ensure a financialcommitment to the successful operation.No minimum dollar amount to qualifyProportionality test - compares the total amountinvested in the enterprise with the cost of establishing orbuying a business Smaller business = higher % of investment Large business = lower % of qualifying investment. 10. Treaty Investor (E-2) Visa - InvestmentIn general, a buyer will have asubstantial investment if: Cost = $100K - $500K andinvestment is at least 75% Cost = $500K - $1M andinvestment is at least 60% Cost = $1M - $3M andinvestment is at least 50% 11. L-1 Transferee Visa Program Temporary transfer of business owner to the US to continueemployment with parent, branch, or subsidiary of foreignbusiness. Must be qualifying relationship (control/ownership)between the Foreign Co & US Co. Investor must have been employed with foreign businessfor continuous period of at least 1yr within the last 3yrs. Must operate both U.S. and foreign business for entire termof L-1 visa. 12. L-1 Transferee Visa Program No minimum investment requirement but show sufficientfunds to operate business Need to have employees or expectation of employeeswithin one year Must show sufficient staff in foreign country to runoperations while investor is in U.S. U.S. business can be in different industry than foreignbusiness 13. EB-5 Immigrant Investor Program Can invest in an existing businessor a new business. Minimum investment $1,000,000($500,000 in certain targetedareas). Must create at least 10 full-timejobs for U.S. workers. 14. EB-5 Immigrant Investor ProgramInvestor must establish a newcommercial enterprise by: Creating an original business; Restructure or reorganize an existingbusiness; Expanding an existing business by140%; or Reviving a troubled business that haslost 20% of its net worth 15. EB-5 Immigrant Investor Program -InvestmentInvestment by EB-5 application must be: At risk in the commercial enterprise, Fully committed, and Immediately available.Investment defined as capital: cashand cash equivalents, loans,equipment, inventory, and othertangible property.NO GUARANTEES! 16. Facts of each case are different. Other options may be available dependingupon the investors circumstances. The information provided here is general innature and should not be relied upon forspecific situations and is not legal advice. Consult with an experienced immigrationattorney to get the right advice anddirection for your investor. 17. FOREIGN INVESTOR TEAM Immigration Attorney Business Attorney Tax Attorney Estate Planning Attorney Real Estate Agents Accountants Bankers Payroll Specialist Insurance Agents 18. QUESTIONS? 19. FOR FURTHER INFORMATIONAnn Massey Badmus901 Main StreetSuite 3900Dallas, Texas [email protected]