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The U.S. immigration regimen presents a sometimes contradictory approach to attracting persons who would otherwise be considered a boon to the economy. For this reason the U.S. immigration system sometimes appears counter intuitive to an experienced business person. The best way to view this hypothesis is to examine the principal administrative characteristics of certain of the major visa categories.
The L visa is a nonimmigrant status available to individuals who have been employed abroad for at least one year out of the past three years by a foreign company that seeks to transfer them to a related U.S. company as a subsidiary, affiliate, or branch. The L-1(a) visa is for executives or managers, while the L-1(b) visa is for employees with specialized knowledge.
To qualify as an executive, the person must be responsible for making major decisions and be answerable only to the board of directors. If the executive performs some of the U.S. company’s work, they may be disqualified due to the “dirty hands” rule. A manager, on the other hand, must manage a specific department or function and must be a second-tier manager, unless they manage a specific function of the company.
Specialized knowledge refers to a skill or job duty unique to the employer and cannot be easily replaced by a local U.S. worker. If the employee to be transferred is the majority or sole owner of the foreign company, the U.S. government may require additional evidence of their intention to return abroad.
The U.S. company does not need to be fully operational before the transfer, but it must demonstrate that it is prepared to start business, including having office premises, a bank account, and start-up capital. A new U.S. company can obtain an L visa for one year to allow for start-up, but it is usually unrealistic to establish a company within that time frame to justify the continued presence of a manager, executive, or person of specialized knowledge.
Spouses of L visa holders can obtain employment authorization. Notably, the L visa does not require a specific level of investment as long as the business plan addresses the issue clearly and demonstrates the financial viability of the new company.
The E-2 status is issued to a person who is a national of a country with which the U.S. has signed either a treaty of friendship and commerce or a bi-lateral investment treaty and who invests a “substantial” amount of “capital” in an enterprise which is not “marginal” and which the “investor” will “direct and manage.” The amount of capital required to qualify for an E-2 visa depends on the total cost of the enterprise, but for businesses that cost less than $100,000.00, the government usually requires close to 100% investment by the foreign person. An E-2 visa application that is based on an investment of less than $150,000.00 may be difficult to sustain.
To demonstrate “substantiality,” the investor must show that they have invested a significant percentage of the total cost of the enterprise. The percentage required varies depending on the nature and size of the business. For example, if the total cost of the enterprise is $500,000.00, the investor may need to invest at least 30% or more of the total cost to qualify for the E-2 visa. The investor must also demonstrate that the enterprise will provide an economic benefit to the community in which it will be established or that it will be profitable and that the investor will earn more than just a mere living from the investment. This may involve submitting detailed financial projections, business plans, and other relevant documents.
A spouse can obtain employment authorization.
A spouse of an E-2 visa holder can obtain employment authorization. The initial application can be made either at the U.S. consulate abroad or from within the U.S. at a USCIS Service Center on the basis of a Petition to Change Status to E-2. Even if the petition is filed successfully from within the U.S. and the investor has received a Change of Status to E-2 (or E-1), the U.S. consulate abroad will seldom give any weight to the prior USCIS adjudication. Thus, upon departing the U.S., the worker will be required to apply “de novo” for an E-2 visa at the applicable U.S. Consulate. The surest way to make a bad first impression is to indicate to the U.S. Consulate that one merely wishes to have the E-2 visa “stamped” into the passport.
The E-1 visa is issued to a person who is engaged in substantial trade principally between the treaty country and the U.S. The definition of “substantial” varies depending on the type of trade and the volume of transactions. Many small transactions over a period of time are often more probative as to “substantiality” than one or two large transactions. One must be careful that if the percentage of trade with the treaty country dips below 50%, the trade will no longer sustain the E-1 visa status. Careful planning is required in this situation, including submitting detailed financial reports and trade data to demonstrate the sustained trade relationship between the treaty country and the U.S.
The H-1B visa is a nonimmigrant status available to individuals who seek to work temporarily (up to 6 years) for a U.S. company in a “specialty occupation.” A “specialty occupation” requires at least a bachelor’s degree and the exercise of independent judgment and the application of abstract principles to resolve practical problems. Civil engineering is an example of a specialty occupation, but any occupation that requires similar mental functions may also qualify.
Due to high demand, the government now requires employers to file a preliminary intention to petition for an H-1B visa. However, the number of applicants often exceeds the available visa numbers, and the government uses a lottery system to select successful H-1B petitioners.
Spouses of H-1B visa holders cannot obtain employment authorization unless the H-1B spouse has been approved for Lawful Permanent Residency or has been issued an extension (“7th year”) of the original 6-year H-1B term.
It is possible for an H-1B employee to also be a part owner of the company in which they are employed, but the employer must be legally separate from the employee. This arrangement carries risks and should not be attempted by inexperienced individuals.
Although the preceding were all nonimmigrant statuses, it is relevant to consider the EB-5 investor immigrant category when discussing investors and business persons. The EB-5 investor immigrant category is described more fully in the section on immigrant status.
The EB-5 Preference is available to individuals who invest either a minimum of $800,000.00 to $1,000,050.00 (depending on the nature of the investment and subject to change) and who create at least 10 permanent jobs for U.S. workers. This category is divided into two types: those who utilize a Regional Center to support their petition and those who create a new business entity on an individual (“Stand Alone”) basis. Each program has its own advantages and challenges, and careful analysis is required before deciding which one to use.
Regardless of which program is used, the investor must document the source of the capital to ensure that the investment capital does not include funds obtained illicitly. It is highly recommended that anyone interested in applying for LPR status through this category seeks professional guidance at the outset. Ramon Carrion has represented both Regional Center and Stand-Alone EB-5 petitioners and can provide valuable guidance and representation throughout the process..