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Should I Pay a Higher Price for a Business Because I am an E2 Visa Seeker?

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The short answer is “no”. However, the more nuanced reality is “often yes”.

The E2 investor visa allows foreign nationals to move to the United States by creating or purchasing and operating a business. As an E2 visa seeker looking to buy a business, you may find some sellers trying to charge you a higher price. The rationale behind this is complex, exploring the perspectives of both the buyer and seller provides insight.

E2 visa business price

The Buyer’s Viewpoint

From the buyer’s perspective, there should be no difference in valuation for a business whether the buyer is American or a foreign national. The financials, assets, market value, and future prospects of the business remain the same. Paying an additional premium due to visa status could be seen as unfair.

However, the E2 visa process does come with complications for the seller. There are likely to be delays in closing as the buyer goes through the visa application process, which could take months. There is also the risk that the E2 visa is denied, which would nullify the sale (provided the contract includes an E2 visa contingency clause, which we highly recommend). These uncertainties may motivate some sellers to mitigate perceived risk by increasing the sale price.

As an E2 candidate, there may also be asymmetry of information regarding US business valuations and norms compared to your home country. This could put you at a disadvantage in negotiations. While the price should be based on the business itself, lack of experience in the US market may inadvertently result in overpayment.

The Seller’s Viewpoint

For the seller, the complications that come with an E2 buyer represent increased risk, effort, and delay in finding a replacement buyer if the visa is denied. The contingencies, extra paperwork, lawyer fees, and training time required also represent direct and indirect costs for the seller.

Some unscrupulous sellers may also see the E2 visa as giving them additional leverage over foreign buyers who desperately need the business for immigration. With the business being central to the buyer’s ability to gain residency, the seller may push for a higher valuation through implied or explicit threats of not completing the sale.

While most sellers likely will not resort to exploitation, the realities from their perspective rationalize asking for some risk premium on the sale price or speed and certainty of closing.

Conclusion

There are reasonable arguments on both sides regarding what is a fair price for an E2 visa buyer to pay. While visa status itself should not impact business valuation, legitimate additional costs, risks, and value of certainty bear consideration during negotiations. As the E2 seeker, being aware of these nuanced perspectives can help you make informed compromises while still avoiding blatant exploitation.

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Sylvain Perret
Sylvain Perret

Sylvain Perret is a business professional who has been living in the United States since 2010. Along with his wife Daphnee, he has established several businesses in the country, including Integrity International Brokers, an agency based in Orlando where he works as a business broker, real estate broker, business consultant, and business plan writer. Over the years, he has helped numerous clients from around the world achieve success in their projects to create or take over a company in the United States with an E2 visa. He is highly knowledgeable about U.S. immigration issues and is the author of the book "S'expatrier aux USA grâce aux visas d'entrepreneurs", which is soon to be translated into English. Sylvain is also a Certified Business Intermediary (CBI) by the International Business Brokers Association and is regularly consulted on issues related to this field. At the age of 50, Sylvain chose to enhance his expertise in finance and strategy by pursuing a Master of Business Administration from the University of Central Florida. He successfully graduated in May 2023, adding a valuable finishing touch to his knowledge. He is active on LinkedIn and Twitter, where he shares his insights and experiences with a wider audience.

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