Buying a Business in the USA?
Here's How to Find the Best Opportunity
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Buying a Business in the U.S.? Here’s How to Find the Best Opportunity
It’s not for nothing the U.S. is widely considered the “Land of Opportunity.” For ambitious, passionate businesspeople in other countries, it’s a great place to come to and start a business, with several key advantages and clear guidelines for foreign businesspeople seeking financial and professional success. Here we’ll look at some of the benefits of choosing to buy a business in the U.S., options available to foreign businesspeople, and important information anyone should have when buying a U.S. business.
Benefits of Buying a Business in the U.S.
Foreign businesspeople will likely find buying a franchise in the U.S., or any other type of business, a good choice for several reasons. Among them are the following:
- The U.S. has the second-largest share in the global gross domestic product (GDP). According to business filing company CorpNet, the U.S. holds 13.5% of the global GDP, second only to China.
- The U.S. has very competitive business tax rates. According to LendingTree, businesses run as corporations have a 21% flat rate business tax, and LLCs can choose between paying that tax or operating as a pass-through entity, meaning profits and losses are passed directly to the business owners.
- The U.S. legal system provides robust protections for business owners, ensuring a secure environment for investments.
Franchise or Independent
An important choice for any foreign businessperson coming to the U.S. is whether to start a franchise or an independent business. Franchising is one of the most new-owner friendly models of business; the franchisor provides the franchisee with an established brand, business model, training, and various services and assistance in starting their own location.
A foreign businessperson can start a franchise in the U.S. with a visa. Immigration law firm Wach Raines explains there are two types of visas available. An EB-5 visa is suitable for those willing to invest a substantial amount. It requires at least $1 million in investment, or $500,000 if the franchise is located in a targeted employment area. Meanwhile, an E-2 visa is ideal for entrepreneurs who intend to play an active management role in the franchise. It allows the hiring of site managers but mandates the owner maintain a decision-making role.
Starting an independent business is also a viable option. It allows the owner to maintain complete control over their business and how it operates. However, it also means all the responsibilities and duties of setting up and operating the business fall on them. The process can also be complex, and involves the following:
- Choose a business structure (C-Corporation or LLC).
- Select a state for formation.
- Find and appoint a registered agent in the U.S. if the businessperson isn’t relocating.
- Obtain a tax ID number (TIN) from the IRS.
- Set up a business bank account.
- Maintain compliance with all relevant regulations.
Searching for the Right Opportunity
It’s important to perform due diligence when buying a business in the U.S. There’s a lot of information to review to make sure any business considered has the potential for high profit margins, reasonable expenses, existing customer bases, and/or loyalty programs. The documents a buyer should check include the following:
- Organizational and good standing documents
- Financial records
- Asset records
- Real estate records
- Intellectual property records
- Employee lists
- Licenses and permits
- Environmental records
- Tax records
- Product/service lists
- Customer information
- Litigation records
- Insurance records
- Contracts with professional services
Since there’s so much information to review, it’s a good idea to hire a consultant, advisor, or attorney to go over each business opportunity before making a decision. It’s worth noting that when purchasing a franchise, this process is greatly eased due to franchising’s inherent transparency. A lot of the information a foreign businessperson should review is readily available in the franchise disclosure document (FDD) that franchisors are required to produce.
The U.S. can be a great place for someone outside the country to lay the foundation for personal and financial growth and prosperity. While starting a business is a complex process, franchising provides an option that comes with a helping hand and guidance from those with experience — two assets that a newcomer will find indispensable.
Finding Success in the U.S. with Altitude
We at Altitude welcome foreign entrepreneurs with ambitions and passion for promoting healthy, active lifestyles to join our team. We’re an indoor trampoline park franchise with plenty of trampoline parks for sale in many markets throughout the country. Let us provide you with the training and support services you need to learn the ropes and start your success story. Fill out a franchise form today to learn more about your franchising opportunity with Altitude.