Khanh Mendelowitz Explains What Small Business Owners Overseas Need to Know Before Moving to the U.S.

Starting or expanding a business is extremely exciting, but it also comes with its own unique set of challenges, especially if you are wishing to move your business to a new country. In addition to cultural or language barriers, as well as shoring up the necessary funds to start a business, you will likely also be dealing with immigration issues, especially in a country like the United States.

Khanh Mendelowitz was born in Vietnam, studying there and later in Korea, before relocating to the United States, a country of which she is now a citizen. She currently lives in Quincy, Massachusetts, and is the Business Development Manager and State Trade Expansion Project Director for the Massachusetts Office of International Trade and Investments (MOITI). She provides a few key pieces of information that small business owners overseas need to know before moving to the United States.

Business Owners Overseas Need to Know Before Moving to the US

Apply for the Right Visa

First and foremost, Khanh Mendelowitz claims that before moving your business to the United States, you need to make sure you’re applying for the right type of visa. There are several visa options in the United States, including the L-1A visa, the E-2 visa, and the E-B5 visa, which can make the process difficult to navigate. The L-1A visa is best suited to businesses that are already established overseas.

This visa allows inter-company transfers, so that existing employees have the ability to come and work in the United States easily. This visa is often applied for by businesses who are wishing to open a new branch or establish a presence in the U.S., but who also plan to retain their overseas operations. To be eligible for the L-1A visa, your business must have been founded a minimum of 12 months before you are applying for the visa, and you must have a minimum of four employees.

Further, the E-2 visa is best suited to those looking to start a brand new company in the United States. Alongside the ability to start your business, this visa will also grant you, the business owner, as well as your spouse and any dependents, permission to live in the U.S.

Khanh Mendelowitz notes that this visa typically requires a personal investment of up to $150,000 and it is not a path to residency or citizenship. Overall, the E-2 visa is one of the quickest ways to get a visa; however, it may not be a feasible option for you or the right one if your ultimate goal is U.S. citizenship.

Finally, Khanh Mendelowitz claims that the E-5 visa is ideal for investors who want to start a new business in the United States. This visa requires more capital than the E-2 visa and you must prove that your business can create a minimum of 10 jobs. The required investment varies from state to state, but typically, the minimum investment is $900,000 and this number can go up to multi millions.

The upside of this visa is that the government does consider it a path to permanent residency or citizenship, making this a particularly attractive option for those looking to move permanently to the United States. The processing times of the E-5 visas are slower, but it might be worth it, depending on your goals. Overall, knowing which visa is most applicable to you, as well as which visa is feasible, is crucial information to have as a small business owner moving to the United States.

Choose the Best Location with Great Workforce

When deciding to move your business to the United States, one of the most important decisions you will make is which state to start your business in. Khanh Mendelowitz warns that while you might be inclined to move to a city where you have friends or family, or that you’ve seen on television or travelled to before, this may not be the best location for your business. One aspect you will need to consider is the business licenses and franchise fees in each state.

Generally speaking, some states make it much easier and less expensive to start a business than others, shares Khanh Mendelowitz. For example, some states or municipalities will offer tax benefits and additional grants and subsidies to new businesses, while others will not. Of course, you will also need to take into account what product or service you wish to offer and if there is a customer base for that, as well as a lot of competition, in the city you are considering moving to.

Research Available Grants and Subsidies

As mentioned previously, some states have excellent grant programs that new businesses can apply for. This available funding can make it much easier for a business to get on its feet, especially in the early stages when money is tight. Khanh Mendelowitz, who serves as the State Trade Expansion Project Director for the Massachusetts Office of International Trade and Investments (MOITI), is well versed in the various grants that the state of Massachusetts offers to small business owners.

For instance, MOITI, through a grant from the U.S. Small Business Administration (“SBA”), will provide grants to eligible, approved Massachusetts small businesses for increasing export sales of their goods and services.

Eligible businesses may apply for grants ranging from a minimum of $6,000 to a maximum of $12,000 per business to reimburse for costs associated with pre-approved projects, activities or services undertaken. Each grant recipient will be required to provide a match to cover at least a portion of the total approved cost for any project, activity or service (the “Match”). New-to-export firms have a minimum 25% match requirement and all other firms have a 40% match requirement.

The STEP Program is intended to help offset international business development and related marketing costs for small businesses. Grant proceeds might be used for specific international business development and marketing costs, including:

  • Overseas trade show or conference exhibition and directly related expenses (e.g., booth space, shipping charges, carnets, attendance in conjunction with exhibiting, space to deliver technical sales seminars, etc.)
  • S. Department of Commerce international business development services (e.g., Gold Key Service, International Partner Search with Virtual Introductions, Single Company Promotion, International Company Profile, trade missions and other export matchmaking services, etc.)
  • Cost of compliance testing an existing product for entry into an export market
  • Design of export market-specific marketing media (including design and translation of brochures, targeted advertising in industry-appropriate media, etc. – does NOT include printing)
  • Localization of websites for target export markets (including translation of websites, technical localization, and search engine optimization for export markets)
  • Research tool subscription for targeted export market research.

Interesting related article: “What does Visa mean?”