Covid-19 and the E-2 Visa
Foreign Investor Series No. 2
With the Covid-19 pandemic changing the way all of us live our lives, the pandemic particularly certainly changed the lives of foreign nationals seeking to work and live in America through the E-2 Treaty Investor Visa. In March, the US Department of State announced the suspension of all routine visa services worldwide. The effect of this policy is that, unless qualifying under very specific and restrictive exemptions, visa applicants cannot schedule an appointment for the critical consulate interview necessary for their visa decision.
The E-2 Visa is different from most visas in that the E-2 Visa is much more about investing and developing a business in America. Without the actual business development work, the majority of the documentation necessary for a strong E-2 Visa application simply would not exist.
The US Department of State policy is a roadblock, but the E-2 Visa is a very long road.
All visa applications take work to build, and the E-2 Visa in particular takes a great deal of work. The popular preconception of a visa application is that it only involves paperwork. However, the E-2 Visa is different from most visas in that the E-2 Visa is much more about investing and developing a business in America. Without the actual business development work, the majority of the documentation necessary for a strong E-2 Visa application simply would not exist.
Therefore, despite the US Department of State’s visa appointment suspension policy, E-2 investors can still work on business development for their E-2 enterprises. Considering how long the road is for E-2 investors to sufficiently develop their businesses to a qualifying point per the E-2 Visa requirements, it may very well be possible that this roadblock would be lifted by the time the E-2 investor is ready to submit his or her E-2 Visa application. With the way the Covid-19 pandemic is disrupting all businesses across America, E-2 investors face the additional challenge of investing in a volatile market while dealing with the US Department of State policy.
The volatility brought onto the global markets has caused many investors to seek a flight to safety in the US Dollar. As a result, the value of many other currencies depreciated against the US Dollar.
US businesses are selling for less, but the US Dollar is selling for more.
Of the many changes to the American and global economy, two of the most important considerations for E-2 investors interested in buying an American business are (a) how cheap a business can be purchased for and (b) the value of their home currency against US Dollar. The volatility brought onto the global markets has caused many investors to seek a flight to safety in the US Dollar. As a result, the value of many other currencies depreciated against the US Dollar.
For E-2 investors who saw their home currency depreciating against the US Dollar, they will find it more expensive to purchase an American business. However, the fall in the asking prices of American businesses for sale can offset – or sometimes outweigh – the negative currency movements.
This current situation brought on by the Covid-19 pandemic creates a unique set of risks and opportunities for E-2 investors interested in investing in an existing US business. The Covid-19 pandemic creates an environment that may reward the astute E-2 investor who carefully and diligently assesses the value and prospects of an American business listed for sale.
The Covid-19 pandemic can only be temporary. What the E-2 Visa rewards – the right to live and to work in America under your own business – can be for a lifetime.
Disclaimer: The information provided on this article does not nor intends to constitute legal advice. All content and information within this article are for general information only.
The author, Stephen Zheng, is the founder and principal of Wealthlet Advisory, LLC, a New York Registered Investment Adviser (CRD No. 282885) dedicated to providing E-2 Treaty Investors with a comprehensive, full-service advisory solution that covers the entire E-2 Visa process (www.wealthlet.com).
Want to learn more about buying a franchise? Contact me today.
Interested in owning a business but not ready, take our FREE franchise classes.