What Not To Do When Moving To The U.S. On The E-2 Visa
Avoid these common mistakes when moving to the U.S. on an E-2 Visa! Research the market, understand costs, adapt to cultural differences, and seek legal advice. Optimize your success with these tips.
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Common Mistakes To Avoid
Moving to a completely different country with a different culture and way of doing things is difficult. It is understandable and common to make mistakes or feel confused about what to prioritize, what to do, and what not to do.
This handy guide will help you settle down successfully and avoid common mistakes that most E-2 foreign investors make when first moving to the United States. It is best to know these points before moving to the U.S.
1. Insufficient Research When Moving To The U.S.
Not researching enough can hinder your transition and overall success in the United States. You must understand the specifics of the industry and market when you are moving to the U.S., along with its unique characteristics.
To thoroughly prepare yourself and gear your business towards success in the bustling U.S. market, ensure that you:
Conduct further research on the local market
The local market is constantly evolving. Researching the local market continues beyond the market research conducted in preparation for the E-2 business plan.
It is recommended to continue looking into the market conditions and dynamics of your local market in relation to your industry. Study customer behavior, current market trends, and the latest product or service demands.
Understand your target audience
It is recommended that you further research and gather data to develop effective marketing strategies that resonate with your target audience. Now that you are moving to the U.S., you can better understand your target audience as you will now experience a similar environment.
Know your competition well
Similar to your target audience, you will witness the competition in your industry first-hand. Take this opportunity to analyze the competitors around you to develop differentiation strategies better.
Keep your eye on new competitors or market entrants that can pose threats to your business to identify new opportunities and challenges, allowing you to stay on top of the competition, resulting in continued success.
2. Underestimating Costs
To be approved for an E-2 visa in the first place, you must first make realistic projections of the costs of conducting business in the United States. However, many foreign investors underestimate the costs of living in the U.S.
To have realistic expectations and budget your living expenses well, ensure that you:
Consider housing costs
Housing costs vary based on the city or state where you plan to settle. It can significantly vary depending on location, size, and accommodation type. Consider rental costs, property taxes, utility bills, and homeowner’s association fees, among others.
To give an example of how you can save on housing costs, let us say that your business is located in Coral Gables, Florida, where the average rent for a one-bedroom apartment is $3,443.
Consider renting an apartment in a different but nearby city in Florida, such as Doral, where the average rent for a one-bedroom apartment is $2,537 instead, saving you $906 with less than 30 minutes of travel.
In addition, fuel consumption between Doral and Coral Gables costs only $1.75 or $3.50 back and forth to cover the short distance. Doing this will save you hundreds of dollars.
Consider healthcare costs
The U.S. is notorious for having very expensive healthcare. Hospital costs can vary wildly depending on the hospital, location, insurance coverage, and more, with the average hospital cost amounting to $2,883 per day.
The average hospital stay is 4.6 days, amounting to a staggering $13,262 average total cost. If surgery is involved, it can cost well over $100,000.
Unsurprisingly, an overwhelming sixty to sixty-five percent of all bankruptcies in the U.S. are due to medical expenses. Thus, consider your medical needs and ensure you have insurance coverage to avoid emergencies and situations that can quickly financially devastate you.
According to Forbes, the top five best healthcare insurance providers in the U.S. include Kaiser Permanente, Blue Cross Blue Shield, UnitedHealthcare, Aetna, and Cigna. Purchasing the right insurance can help you live at ease when moving to the U.S.
Consider education costs, if applicable
If you have children or dependents who will study in the U.S., research well in advance the cost of education in the city and state where you are staying, including school fees, supplies, and extracurricular activities.
Consider transportation costs
If you plan to purchase a vehicle, consider the costs of owning one, including car payments, insurance, fuel, maintenance, and parking. As an alternative, research public transportation costs, especially if you have dependents, like your children, who may use public transportation.
Consider daily expenses
Remember to factor in groceries, dining out, entertainment, clothing, personal care, and other daily expenses you may incur. These costs will vary depending on your lifestyle, location, and how many dependents you have with you.
According to the Consumer Price Index, the average cost of eating food at home rose from 2021 to 2022 by 11.4 percent. A U.S. News article estimates that a moderate budget plan for a family of four would incur $301.20 per week in groceries, while a liberal budget plan for a family of four would incur $363.70 per week.
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3. Lack of Networking
A lack of networking can hinder you and your business’s success. Do not let opportunities pass you by.
Building and maintaining a strong network of contacts is incredibly helpful for businesses as it opens doors to vital partnerships, industry insights, and lead generation.
Consider these networking opportunities while in the U.S.:
Industry events
Take advantage of and attend industry events, trade shows, conferences, and seminars relevant to your business. These are opportunities to meet industry experts, potential suppliers, generate leads, stay updated on new trends, and establish connections with other key players in your industry.
Memberships to associations
Consider joining industry-relevant associations or organizations. These groups often conduct events, workshops, and educational sessions that you can take advantage of to network with others and form partnerships.
Local business and social events
Consider attending industry-specific events and events around your local area, such as fundraisers, community gatherings, and charity events where you can make connections.
After all, people who know and like you will be more inclined to support your business. Having this strong group/community when moving to the U.S. will result in referrals and increased lead generation.
4. Failure To Adapt To Cultural Differences
Remember that you are conducting business in the U.S. and will also be living there, mingling with the local population in your day-to-day life.
The U.S. has a rich history with a diverse population of well over 300 million people worldwide, speaking various languages and practicing various beliefs.
Thus, failure to adapt to cultural differences and accept cultural nuances and different business practices in the U.S. will only make it difficult for you to transition into your new life.
To build successful relationships and navigate the U.S. market well, consider the following:
Communication style and business etiquette
Remember that the communication style in the U.S. is direct. Be concise, straightforward, and articulate in your interactions. “Time is money,” as the Americans say.
Do not be afraid to speak your mind; do not beat around the bush while remaining respectful and courteous. Respect punctuality and practice appropriate business attire for different occasions.
Cultural sensitivity
Be sensitive to different perspectives and backgrounds. Avoid making generalizations or assumptions based on stereotypes, which may be perceived as prejudice. Be willing to adapt and show openness about different cultures. The U.S. values individuality.
Customer service
Product quality does not always speak for itself. Provide prompt responses, deliver high-quality products and services on time, and strive to exceed customer expectations.
These will build a strong reputation for your business since customer service expectations are often high in the U.S.
5. Inadequate Legal And Tax Advice
The legal and tax systems in the U.S. is complex. Common mistakes include inadequate record-keeping and bookkeeping practices, failure to comply with obligations, misunderstanding labor laws, neglecting periodic tax reviews, and overlooking updates or changes in regulations, resulting in penalties and setbacks.
Avoid costly mistakes by considering the following:
Ongoing legal and tax support
Seek and establish an ongoing relationship with tax and legal professionals who can guide and support you as your business grows. They can help you navigate regulatory changes, advise on business matters, and assist with contract negotiations.
Partnering with the right professionals can help you eliminate potential problems when moving to the U.S.
Risk mitigation
Work with an accountant and tax professional familiar with U.S. accounting principles and reporting standards to establish proper bookkeeping and accounting practices.
Perform periodic reviews to ensure compliance with industry-specific regulations, avoid penalties and legal issues, and identify risks and areas of non-compliance.
The E-2 visa is an excellent option for foreign investors entering the U.S. market through a bonafide U.S. enterprise. If you desire to find the best investment opportunities for your E-2 visa, click here to connect with us.