If you’re considering selling your business in the near future, one group of buyers you’d be wise to closely consider is foreign buyers. While there may be some additional steps or hurdles involved in selling a business to a foreign buyer, there also may be major advantages in some of these cases, including lucrative sale offers you might not receive from domestic buyers.
At Utah Business Consultants, we’re happy to offer business brokerage services to clients looking to sell a business to a wide variety of potential buyer types, including international buyers. What are some of the key factors such buyers are often looking for in a US-based business, and how do visas, immigration and related variables play a role here? Let’s go over everything you need to know.
Like many domestic buyers, the top factors foreign buyers will be interested in are usually pretty straightforward. The top variable here tends to be profitability and long-term plans here – you should be able to show not only how your business is currently profitable, but how it will continue to turn profits in the coming years. You should be able to showcase tax returns and any other documentation the buyer requires, just like in a normal sale.
In addition, many foreign buyers place a particular emphasis on business longevity. Particularly if they are attempting to relocate to the US as part of their purchase, which many do, they will want to see a significant track record that indicates they’ll be able to maintain the business for many years. While this is often a factor for domestic buyers as well, it tends to be even more important for overseas entities.
In many cases, it’s important to remember that foreign buyers are navigating significant hurdles when it comes to visas and immigration. The details involved in such programs can be complex and difficult, and whether an individual is able to receive a visa – complicated significantly by current COVID-19-related travel restrictions – may play a role in whether a deal ultimately takes place. Many business sales to international buyers will be contingent upon visa approval, and nonrefundable deposits may be involved here.
Another factor to consider: Some foreign buyers will also be interested in access to the US education system for their children, and this may impact the sale. They may desire in-state tuition in a particular state, for instance, making business location a commonly important factor in such sales.
As you move through this process, recognize there may be cultural and business differences at play. These may range from basic terminology to expectations and customs.
For more on considerations for foreign buyers during a business sale, or to learn about any of our business brokerage services, speak to the staff at Utah Business Consultants today.