What A Business Valuation Does for an E-2 Visa 

The E-2 visa is for individuals who wish to enter the U.S. to develop and manage the operations of an enterprise in which they have invested a substantial amount of capital. 

In addition to the basic requirement of being a legal resident of a country with an E-2 treaty with the United States, the qualifying investment that applicants make as the basis for their eligibility must result in at least 51% ownership of that enterprise.  

That’s where a business valuation comes in.  

A third-party confirmation of the market value of the business tied to the E-2 visa application shows USCIS (U.S. immigration authorities) that the amount the applicant has put at risk genuinely constitutes at least 51% of the value of the acquired company. It’s a way to demonstrate the legitimacy of the price paid by applicants who are acquiring less than 100% of the target company and to avoid suspicions of fraud.  

Satisfying USCIS that the price paid for a majority stake in a company is a critical qualifying point for any E-2 visa applicant to be approved.

What Is a Business Valuation and How is it Calculated? 

An E-2 business valuation report should show several years of historical financials as well as other standard components of business documentation, including income statements, balance sheet analyses, cash flow analyses, and information regarding liquidity, solvency, and profitability.  

The information contained in these sources is used to make calculations of the various evaluation approaches used to determine the valuation of the business.  

At least two standard valuation approaches should be used: 

• The discounted cash flow approach (DCF) 

• The industry multiple approach 

• The asset-based valuation approach 

All available information is then combined to create a due diligence scorecard, which presents the overall financial performance of the company, its prospects for the future, its various assets and competitive environment, and any noteworthy risks.  

When to Arrange an E-2 Business Valuation 

It’s best to get an E-2 business valuation before the submission of the visa application. Submitting it together with the E-2 visa application gives USCIS what it needs to determine the validity of the investment tied to the visa.  

Submitting the business valuation at the start of the application process will avoid delays later as well. When the valuation is missing as the case is being reviewed, USCIS will issue a Request for Evidence (RFE), which must be received, answered, and returned, causing significant delays.  

Are There Other Benefits to Getting a Business Valuation?  

Yes. Any kind of financial due diligence involves a thorough investigation into a company’s financial health. It involves examining financial statements, income statements, balance sheets, and cash flow statements to ensure the accuracy and sustainability of the numbers. 

This process helps identify any hidden liabilities or risks that might affect the company’s financial health. Financial due diligence is a crucial step to undertake when seeking to acquire or invest in a business for several reasons: 

• It helps mitigate financial risks such as undisclosed liabilities or irregularities which could impact the future performance of the business 

• It helps ensure that the financial information presented by the target company is accurate and complete, providing a clear picture of its financial reality 

• It offers valuable insights into the company’s financial performance, position, and prospects, which are essential for strategic planning and future growth 

Joorney Can Prepare the Business Valuation You Need 

Business valuations are relevant to both business visa applicants and those acquiring or investing in a business.  

For business visa applicants, especially for the E-2 visa, a valuation can prove that the investment made for control of a business was based on a fair and realistic market price, thus satisfying a key requirement of the visa category.  

In purely business contexts, valuations are part of the due diligence process that reveals the true financial picture surrounding an existing enterprise and serves to inform investors before moving forward.  

If you need a valuation as part of an E-2 application or are simply looking for an expert, third-party examination of the financial health of a company for other purposes, Joorney can help.  

Our experienced in-house experts can conduct a comprehensive financial audit to reach a fair and accurate valuation based on the most current market conditions. We have produced valuations for immigration authorities, investors, and other potential stakeholders, and we understand the language and format they expect when reviewing a professional company’s financial review.

Learn more about business valuations on our site or reach out to us to schedule a personal introduction through our services.