How To Immigrate To The U.S. By Selling California Wines

How To Immigrate To The U.S. By Selling California Wines


In a previous article I wrote about the E-2 visa as a vehicle to immigrate to the U.S.A. In it I used the illustration of a South Korean investor applying for an E-2 visa by setting up a wine bar/tasting room in Los Angeles in the Koreatown community. His plan would be, for example, to introduce California wines to a new consumer market that may have no knowledge about them, selling wine both by the glass and the bottle. Such an investor, being from an E-2 Treaty Country, would invest say, $400,000 and over the course of the next few years create say, three jobs. He would sell wines, reap the profit and then begin to export wines to his home country saving up to 25-50 percent of the U.S. income tax on export sales. In that article I contended that much of the initial investment could be recovered using a clever strategy of round tripping, that is to say, exporting the wine back to South Korea.

In this article I would like to hone in a little closer on this idea.

In setting up the proposed wine bar, the investor would be setting up three businesses: wine sales by the glass, that is to say retail wine sales; selling domestic wines by the bottle, that is to say wholesale wine sales; and exporting wines back home. But how exactly would all this work?

Merrill Family in Paso Robles, California. Dana Merrill, far right, runs the Pomar Junction winery with his family and wants to help investor immigrants venture into the wine business.

For the anwer to that question I turned to Dana Merrill, an 8th generation rancher and wine maker in  Paso Robles. Merrill has used his expertise to streamline the wine business into a low overhead business with high profit margins. In selling wine by the glass, his experience as been that up to 80 percent of the cost of wines sold this way is profit. That accords with a similar figure in the coffee business, but coffee doesn’t offer the round tripping benefits that wine does. In short, by using the new Coravin wine opener technology I mentioned in my previous article, an investor can immediately transform an illiquid asset, that is to say a wine cellar, into a liquid asset by making sales by the glass. Moving wine inventory out by the glass beats waiting for someone to buy wine by the bottle from a wine cellar. That’s the theory.

A striking sunset at the Pomar Junction Winery in Palo Robles, California. An E-2 visa investor could buy supplies from this winery, for example.

According to Merrill, he could arrange for wines from his award winning winery at Pomar Junction Winery to be sent directly to the wine bar location in Los Angeles, for example. Alternatively, if the investor preferred, the wine could be sent to an air cooled Paso warehouse where title would pass to the investor upon delivery, thereby saving on rent and the cost of overhead, storage and insurance in the big city. This would mean that the investor’s money could be better used to support his business and himself, as well as his family, during the start-up and through to successful operations.

Part of the E-2 application would include a business plan prepared along these lines with income and expense projections over five years. The investor’s background and experience would be presented in the application by way of a resume. The plan would include legal advice on tax matters and wine licencing, in addition to business matters, to maximize the investor’s chances of success. The winery supplying the wine, whether it is Pomar Junction or elsewhere, would have a vested interest in making sure of the success of the investor since it would benefit from the sales both domestically and abroad.

The investor would normally receive a five year E-2 work visa. That visa would be renewable in five year increments so long as the business exists. While there is no direct route to a green card in this scenario, there are a variety of options that could work for the investor, depending on his or her circumstances.  Again, depending on the investor’s circumstances, it may be that the investor may want his spouse to be the main applicant to give him the latitude to attend to business overseas while she looks after business in the United States and the children go to school here. This would particularly work well if the export side of the business, that is to say round tripping, was a serious possibility and the husband took on the role of marketing and selling exported California wines overseas.

There are other interesting options for foreign investors involving California wine country. But that will have to be the subject of another article.


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