Are there obstacles to company ownership if I’m not a U.S. citizen?

Nina L. Kaufman, Esq.

Nina L. Kaufman, Esq.

An award-winning small business attorney in New York City, Nina is a sought-after professional speaker and Entrepreneur Magazine online contributor. She is the go-to counsel for knowledge economy and creative companies, delivering legal services and educational resources that save them time, money, and aggravation.

Posted on February 24, 2015 in Form a Company

Q.:  I’m a Canadian wanting to buy a small to medium-size business. Are there restrictions to purchasing a U.S.-based company?

I have no credit history in the U.S. I have $300,000 to $500,000 to invest. I’ve also heard that any non-U.S. citizen who invests more than $100,000 in a business gets fast-tracked for a green card. Is that fact or fiction? Can I form a company in the U.S.? I’ve heard that Delaware is the place to do this.

 

A.:  If you’re a nonresident alien seeking company ownership in the U.S., you can form a C-Corporation or LLC in the United States, but you cannot hold shares of S-Corporation stock.  There are various states in which you could incorporate, and Delaware is well known for being an attractive location for forming a company because of its General Corporation Law.  You’d still want to consult with attorneys who specialize in immigration law and foreign investment as you consider your ownership of a business in the U.S.

It’s not clear exactly what you’re hoping to do—obtain ownership of a business or form a company, or both, depending on what expedites the green card process for you.  If your ultimate goal, however, is to be on the fast track toward a green card, it’s true that you can apply for a green card through investment.

Nonresident aliens who are active managers in US companies can apply for these green cards—known as EB-5s, or Fifth Preference Green Cards—whether they are creating a brand new business in the US or expanding an old one.  The United States Immigration Support website has the application you would need to apply for an EB-5.  Whether that “fast tracks” the process, though, is something for you to discuss with an immigration attorney to ensure you keep your expectations in check as you pursue company ownership.

 

What other law questions do you have about transfer of ownership and closing a business?

 

 

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