The United States economy has the world’s largest nominal GDP and net wealth. In this thriving scenario, companies have fertile soil to expand in size and profitability. Is it possible for a foreigner to buy a business in the United States? Keep reading to find out.
Can a Foreigner Buy a Business in the US? – The Verdict
Eligible foreign nationals are allowed to buy a business in the United States. Foreign entrepreneurs can perform direct investments to participate in the operation and control of a US-based company.
It is also possible to invest without substantial participation in the business’s operation by performing portfolio investments involving equity. As it is plain to see, there are multiple ways for foreign investors to purchase a US business (in whole or part).
Are Foreign Investors Allowed to Work in the United States?
In many cases, it is possible to buy a US business as a passive investor and continue to reside in your home country. Many entrepreneurs buy a US business to be actively involved in the company’s operations, which requires a physical presence.
If a foreign entrepreneur wants to buy a company to be actively involved in management and control, the United States Citizenship and Immigration Services (USCIS) has different visa options with work permits.
Buying a US company does not automatically grant you a work permit – either with or without business partners. Unless you have a visa that allows you to work legally, you are not permitted to perform any duties for your new US business.
What Visa Options Permit Foreign Business Owners to Work in the US? – An Overview
In specific circumstances, a foreign investor may buy and own a US business and act as a director without a visa – as long as there is engagement in daily business activities from the United States.
The ideal approach is to work with an experienced business immigration attorney to identify which visa is the best option for your case. There are several visa options available at USCIS that permit foreign business owners to work, such as:
- E-1 Treaty Trader (nonimmigrant visa)
- E-2 Treaty Investor (nonimmigrant visa)
- L-1 Intracompany Transferee (nonimmigrant visa)
- O-1 Individuals with Extraordinary Ability or Achievement (nonimmigrant visa)
- TN NAFTA Professionals (nonimmigrant visa)
- E-3 Specialty Occupation Professionals from Australia (nonimmigrant visa)
- EB-5 Investor Visa (immigrant visa)
Buying a US Business as a Foreigner – Licensing and Permits
Despite the relative ease involved in the purchase of a business in the United States, foreign investors must pay attention to several details that may hinder their activities. The US system is complex, especially when it comes to tax law.
While foreign investors are free to buy a US company in nearly every business niche, federal laws restrict the percentage of foreign ownership in specific sectors, which includes:
- Banking entities
- Radio & television broadcasting
- Marine transportation and fishing
- Defense industries
- Mineral leases and resources
- Electric, gas, and utility services
- Agricultural land
Depending on the business sector, purchasing a company may require specific licenses from state and federal governments. Under US law, cities and municipalities can also regulate businesses within their jurisdiction.
Foreign investors must pay attention to tax compliance. Handling the complex, multi-layered tax system of the United States requires a strategic approach, which is something only an expert attorney can provide.