Structuring and closing acquisitions involving foreign buyers, sellers, or investors.
From an operating company abroad to a Florida business
A nineteen second film tracing an established foreign company as it negotiates, structures and opens a South Florida operation.
- Terms are negotiated across the table, with real disagreement before agreement.
- Records are checked and a problem in the ownership documents is identified and worked through.
- The Florida location opens and trades under its new structure.
Illustration only. The people shown are not attorneys, employees or clients of the firm, no government document, seal or approval is depicted, and nothing here predicts eligibility, timing or any outcome.
The additional layers in a cross-border deal
A cross-border acquisition carries every issue present in a domestic transaction, plus currency conversion, cross-border tax structuring, source-of-funds documentation, and, frequently, an immigration objective tied to the deal. Coordinating these threads from the outset avoids conflicting decisions later.
Entity structuring for the foreign buyer
Foreign buyers typically acquire a U.S. business through a newly formed U.S. entity rather than directly, for liability, tax and immigration reasons. The choice of entity, its capitalization and its ownership structure should be considered together with any planned E-2, L-1, or EB-5 filing.
Source and path of funds
Funds moving internationally to finance an acquisition require documentation of their lawful source and the path from origin to the U.S. closing account. This documentation often serves double duty: supporting the transaction and any related immigration filing.
Aligning the transaction with an immigration strategy
When the acquisition is intended to support an E-2, L-1A, or EB-5 filing, the purchase agreement, closing timeline and post-closing operating plan should reflect the applicable classification's requirements: active operation, ownership percentage, control, or job creation, as relevant.
Process
- 1
Structure
Form the acquiring U.S. entity and determine ownership consistent with tax and immigration goals.
- 2
Diligence
Conduct legal and financial diligence on the target, alongside source-of-funds documentation for the buyer.
- 3
Negotiate and close
Finalize the purchase agreement and coordinate international funds transfer for closing.
- 4
Post-closing
Support corporate housekeeping and coordinate timing with any related immigration filing.
Answers
Frequently asked questions
- Do foreign buyers need a U.S. entity to acquire a business?
- Most foreign buyers form a new U.S. entity to hold the acquisition, which supports liability separation, U.S. tax filings, and, where relevant, the ownership and control requirements of an immigration classification such as E-2.
- What documentation is needed to show the source of acquisition funds?
- Typical documentation includes evidence of how the funds were earned or acquired, bank records tracing the funds to the closing account and supporting records such as tax filings, sale contracts, or corporate distributions, particularly where funds cross jurisdictions.
- Can a cross-border acquisition support an E-2 or L-1 visa?
- It can, when the acquired business is active and operating and the ownership, control and investment structure meet the applicable classification's requirements. This should be confirmed before the purchase agreement is finalized.
- Are there restrictions on foreign ownership of U.S. businesses?
- Certain industries and transactions can be subject to specific federal review or restrictions. These should be checked early in a cross-border deal rather than assumed to be inapplicable.
- How does currency exchange affect a cross-border deal?
- Movements in exchange rates between signing and closing can change the effective purchase price in the buyer's home currency. Parties sometimes address this with a fixed exchange rate mechanism or a defined pricing date in the agreement.
Official sources
Consult the official sources above for current rules and procedures.