How Immigrants Can Build a Fortune Through Boring Businesses in the U.S.

Forget the glitz of Wall Street or Silicon Valley; many of America's top earners are building substantial wealth through more traditional, often "boring," businesses. According to Princeton University economist Owen Zidar and University of Chicago economist Eric Zwick, owning a medium-sized regional business is the largest source of income for the top 1% of U.S. earners, excluding capital gains. 

This isn't a new phenomenon, but its importance has grown significantly. Their analysis of tax data from 2000 to 2022 shows that the share of income generated by business ownership for the top 1% of earners increased from 30.3% in 2014 to 34.9% in 2022. For the top 0.1% of earners, this share rose even more dramatically, from 37.3% in 2014 to 43.1% in 2022.

These lucrative businesses often include auto dealerships, beverage distributors, grocery stores, dental practices, and law firms. The number of such business owners with a net worth of $10 million or more (adjusted for inflation) has more than doubled since 2001, reaching 1.6 million by 2022.

Real-World Examples of "Stealthy Wealth"

The attached article highlights several inspiring examples:

• Derek Olson: The CEO of National Flooring Equipment, Olson built his fortune making machines that remove flooring, like the miles of carpet in elementary schools. His company is expected to generate approximately $50 million in revenue this year, placing his annual income in the top 1% of U.S. earners.

• David MacNeil: The founder of WeatherTech, MacNeil, made his wealth producing car floor mats. Starting his business from his garage 35 years ago, WeatherTech now employs around 1,800 people and anticipates approximately $800 million in revenue this year.

• Larry Fleming: An 80-year-old Wendy's franchisee, Fleming initially made his money in burgers before pivoting to beer distribution. His beverage distribution company, LDF Sales and Distributing, has about 64% market share in Oklahoma and annual sales nearing $250 million.

These stories illustrate that success often comes from identifying and serving niche needs within established industries.

Immigration Options for Business Owners

For immigrants looking to tap into this potential, the E-2 Treaty Investor Visa and the EB-5 Immigrant Investor Program are two primary avenues:

• E-2 Treaty Investor Visa: This non-immigrant visa allows individuals from countries with which the U.S. maintains a treaty of commerce and navigation to invest a substantial amount of capital in a U.S. business. The investment must be "substantial," meaning sufficient to ensure the successful operation of the enterprise, and the business cannot be marginal (it must have the present or future capacity to generate more than enough income to provide a minimal living for the investor and his or her family).1 The investor must also develop and direct the enterprise. The E-2 visa does not have a specific minimum investment amount, but it typically requires a significant, active investment.

• EB-5 Immigrant Investor Program: This program offers a path to a green card for foreign investors who make a qualifying investment in a U.S. commercial enterprise and create or preserve at least 10 full-time jobs for U.S. workers. The standard minimum investment amount is currently $1,050,000, or $800,000 if the investment is made in a Targeted Employment Area (TEA), which includes rural areas or areas with high unemployment.2

Both E-2 and EB-5 visas require careful planning and adherence to specific regulations. However, for those with an entrepreneurial spirit and a desire to invest in the U.S. economy, these programs can pave the way to significant financial success and a new life in America. The growth of the "stealthy wealthy" underscores the immense opportunities available for business-minded immigrants.