By Renata Castro, Esq.
Portuguese citizens, including those who have dual citizenship, will soon be able to live in the USA legally while running their businesses. The U.S. Congress has passed designation of Portugal as an E-2 treaty country and President Joe Biden signed the measure into law in December, 2022.
The designation of Portugal as an E-1 and E-2 treaty country comes under section 5901, with significant changes expected to impact those born in Portugal and holders of a Portuguese passport. This also applies to any other individual who possesses a Portuguese passport as a result of descendance or naturalization.
Brazilians with Portuguese citizenship are expected to be the largest number of applicants under Portugal’s newly acquired designation as an E-2 country. 11,109 Brazilians became Portuguese citizens in 2021.
What you need to know about the E-2 visa for Portuguese citizens.
1- What is the E-2 visa? The E-2 Visa is an investor visa. It allows an individual to enter and work in the United States based on an investment in a U.S. business. This visa is valid for three months to five years and can be extended indefinitely. The investment must be “substantial”, although there is no monetary amount defined by law.
2- What kind of investment qualifies a Portuguese citizen for an E-2 visa? Investors from E-2 treaty countries, which now include Portugal, must meet the requirement of investing in a new or existing business in the United States. An investment is defined as placing capital in the form of money or assets into a new or existing venture for profitable outcomes.
– The money invested must be in the possession of the entrepreneur and some of it irrevocably committed to the enterprise.
– The funds must come from the investor.
– The funds must be legitimately obtained.
– It must be a real business. In other words, the entrepreneurial endeavor will produce goods or services for earning profits. A business plan is required.
3- What is the minimum investment for an E-2 investment? There is no legally defined minimum.
4- Can spouses of Portuguese citizens move to the US under an E-2 visa classification? Yes. They come to the U.S. as dependents and earn the right to work for any employer.
5- Can I buy an existing business for an E-2 application? Yes. See below.
6- Can I buy a franchise for an E-2 application? Yes. See below.
7- Can Portuguese citizens in the U.S.A without status pursue an E-2 visa? Although possible, it requires a complex process involving a pardon request called a Hranka Waiver. This is a waiver of inadmissibility granted at the discretion of U.S. immigration authorities. Before making any decision, make sure to consult with a licensed and experienced immigration attorney.
8- Do I need a business plan to apply for an E-2 visa? Yes. A business plan is the backbone of your case for approval. Without and E-2-specific business plan, you are making it harder for the immigration agent to understand your application, greatly increasing your chance of denial.
9- Which books can I read to learn more about the E-2 visa for Portuguese citizens? We recommend 99 Questions to Ask BEFORE Starting a Business in the U.S.
10- When can I get an E-2 visa as a Portuguese citizen? You can apply for an E-2 visa outside of the United States. The American consulate in Lisbon is an option, or any other consulate located in a country where you have citizenship. If you are a citizen of both Brazil and Portugal, you can process your E-2 requests at U.S. consulates in Lisbon, Sao Paulo, or Rio de Janeiro. Moreover, if you are currently in the United States and entered the U.S. under a different visa classification and you hold valid legal status, you can file for a change of status with the U.S. CIS without departing the United States.
11- How long does an E-2 visa application for a Portuguese citizen take? The preparation of the application package usually takes longer than the processing of the petition. Once you get an appointment with the consulate, the application can be approved or denied in 30 days or less.
Portuguese citizens can begin preparation of their E-2 visa application by obtaining a valid Portuguese passport and researching business options which will qualify the investment requirement. Starting a new business, buying an existing franchise unit, opening a new franchise unit, as well as buying an existing business, can all be qualifying investments for Portuguese citizens looking to obtain an E-2 visa allowing them to work, live, and invest in the United States.
You can also buy an existing business. Fernando Mello is a business broker at IM Group International. Mello offers some insights on buying existing businesses.
How can a business broker help me buy a business?
FM: Business brokers are invaluable advisors that understand the local market and can help the buyer not only finding the best options available, but most importantly, successfully conducting the transaction through closing. Buying and selling businesses is a highly specialized practice, which is very different from starting or running a business. For the most part it is a project with many moving parts that requires good coordination, which the business broker will perform on behalf of the buyer, while he/she focuses on the key aspects of the target business: market/sales, products/services, people, processes, etc. Buyers should always look to engage an experienced business broker early on in their search, which can make all the difference between a time consuming, frustrating endeavor or a rewarding, successful business purchase.
Can a business broker help me buy a business for an E-2 visa?
FM: Absolutely. Any buyer benefits greatly by working with a business broker, and even more so when it comes to a foreigner looking to acquire a U.S. business for immigration purposes. Experienced business brokers understand the criteria by which a business may qualify to support an E-2 visa petition, and work closely with the buyer and his/her immigration lawyer through the entire process. Buying an existing, operating business greatly increases the chances of approval and renewal of an E-2 visa, as compared to a new/startup business.
Can a business broker help me buy a franchise?
FM: Yes. Operating franchises are generally sold through the same process as non-franchised businesses. If the buyer prefers a new franchise, experienced business brokers also have knowledge and access to hundreds of franchisors and opportunities throughout the country. For instance, Transworld Business Brokers is a franchised business under the United Franchise Group (UFG) and associated with the International Franchise Professionals Group (IFPG).
What should I look for when buying a business?
FM: There are several aspects to consider, but the most important is that the business and the acquisition fit your criteria, which a business broker will help you develop, taking into consideration the market reality. For example, you may want a business within certain categories and areas, with a maximum price and/or a minimum net income, that may or may not require your full time dedication. You should strive to understand and define to the best possible extent what is mandatory and what is optional in your own view in order to help the business broker help you and maximize your chances of success.
What are some red flags I should look for when buying a business?
FM: Perhaps the most important red flag is poor books and records. If the seller cannot produce evidence and demonstrate the business’ financial performance, even if in fact the business is profitable and promising, buyers should be aware and avoid exposing themselves to unknown risks. Additionally, one should consider:
– Businesses that are too young and have not survived the first challenging years, or that have been acquired recently by the seller.
– Businesses that depend too much on the owner, and which may lose substantial value when the seller is gone. The same applies to key employees.
– Businesses that have either supplier or customer concentration.
– Businesses that show significant variations in revenues, costs or expenses, or that have key performance indicators (KPIs) that are very different from the industry’s benchmarks.
Do I pay to work with a business broker?
FM: If you are a buyer, generally no. Business brokers’ compensation is usually contingent on success and paid by the seller. Even when there are two business brokers in the same transaction, one representing the seller and the other representing the buyer, the commission paid by the seller is split between them. Only on occasion, if the search is very specific and/or requires off-market incursions, the business broker may require a retainer or an advancement on the future commission.
Although Portuguese citizens are encouraged to start working on their applications, the US State Department or INS have posted directions for submissions of applications to the government. You can get a head start here with the help of Castro Legal Group.
Renata Castro, Esq. is an award winning immigration attorney, and founder of Castro Legal Group , a full service immigration practice. Contact us for a free initial evaluation of your immigration options.
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