By Bruce Pockrandt, CBI
Managing Broker, Truforte Business Group
An international entrepreneur seeking an E-2 Treaty Investor visa can represent an important potential buyer for certain Florida businesses.
For the seller, however, the key is understanding that there may be additional timing, documentation and coordination considerations compared with a purely domestic transaction.
The business broker does not determine whether a buyer qualifies for an E-2 visa. Immigration advice should come from the buyer’s qualified immigration attorney.
Our role is to help facilitate the business transaction and coordinate the business information required by the buyer and the buyer’s professional advisors.
Florida has long attracted international entrepreneurs.
Many want to live and operate businesses in the United States rather than simply make passive investments.
An established Florida business may provide an international entrepreneur with an existing operation, customers, employees, revenue, equipment, systems and a track record.
For sellers, that can expand the potential buyer pool beyond local entrepreneurs.
Generally speaking, an E-2 investor is an eligible national of a treaty country pursuing a qualifying U.S. investment under federal immigration rules.
Whether a particular buyer, investment or business qualifies is a legal and immigration question.
The seller does not need to become an immigration expert.
But sellers should understand that the buyer may be coordinating the acquisition with an immigration attorney and may require information about the business for the visa process.
International buyers and their advisors may need clear information about the company.
Depending upon the situation, that can include:
This is another reason good records help when selling a business.
The more organized the company is, the easier it is to provide appropriate information to the professionals involved.
An E-2-related acquisition may involve steps outside a conventional transaction.
The buyer may need to coordinate business due diligence, purchase documents, financing or investment funds, immigration documentation and legal advice.
Sellers need to understand the proposed timeline before accepting an offer.
Ask:
What needs to happen before closing?
Is the transaction contingent upon anything related to the buyer’s immigration process?
How will funds be handled?
What does the purchase agreement say?
Your business broker and attorney can help identify transaction questions, while immigration counsel addresses visa matters.
A common misconception is that an international buyer will purchase any business simply because a visa is involved.
That is not how sellers should approach the market.
International buyers are still buyers.
They evaluate cash flow, risk, location, employees, competition, growth, owner involvement and purchase price.
Many are sophisticated entrepreneurs.
The business still needs to represent an attractive opportunity.
A business with established employees and operating systems may be particularly appealing to someone relocating from another country.
The buyer is not only purchasing income.
They may be entering a new market, culture and business environment.
A company with trained staff and clear procedures can make that transition easier.
An international buyer may value a well-organized seller transition.
The buyer may need to learn not only the company but also local vendors, customer expectations, operating practices and the Florida marketplace.
That doesn’t mean the seller should agree to unlimited training.
The transition should be clearly defined in the purchase agreement.
An E-2 buyer should go through the same appropriate confidentiality and qualification process as other buyers.
The fact that someone is pursuing an immigration strategy does not mean confidential business information should automatically be released.
Financial capability, motivation and fit still matter.
This distinction is important.
A business broker can help provide business information and coordinate the transaction.
An immigration attorney should advise the buyer concerning visa eligibility and immigration requirements.
Similarly, sellers should rely on their own attorneys and tax professionals for legal and tax advice.
A well-coordinated team helps everyone understand their role.
When appropriate for the business, international buyers can provide an additional source of demand.
At Truforte Business Group, we have experience working with international entrepreneurs and coordinating with the professional advisors involved in these transactions.
For a Florida business owner, the important takeaway is simple:
Your eventual buyer may live across town—or across the world.
A confidential marketing strategy should be broad enough to reach qualified buyers wherever they may be.
Related reading: How to Sell a Business in Florida: A Step-by-Step Guide and E-2 visa information for buyers.
International entrepreneurs pursuing an E-2 strategy do acquire U.S. businesses, but whether a particular buyer and investment qualify is determined under U.S. immigration law and should be addressed by qualified immigration counsel.
No. Truforte assists with the business transaction and can coordinate business information with the buyer and the buyer’s immigration attorney. Immigration advice should come from qualified legal counsel.
Yes. International buyers should still be evaluated for financial capability, seriousness and fit before sensitive seller information is released.
It can involve additional coordination. The actual timeline depends on the transaction, the buyer’s circumstances and any conditions contained in the purchase agreement.
Bruce Pockrandt, CBI, Managing Broker of Truforte Business Group, works with domestic and international buyers seeking Florida business acquisitions and helps sellers navigate confidential business transactions.
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