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Visa Options Small Business Owners (E-2, L-1, H-1B)

E-2 Visa, L-1 Visa and H-1B Visa Options

In strolling through the shopping centers in our Office’s surrounding neighborhood, one cannot help but feel that the immigrant sprit of entrepreneurship is alive and well.  Small IT start-ups, mom-and-pop Asian restaurants, franchise American take-out restaurants, hair salons, bookstores, and language and music schools, are owned and operated by immigrants—many of whom are recent arrivals. Like generations of immigrants of various nationalities before them, these migrants put their heart and soul into their work and endeavor to provide a future for their children. Others are recent graduates of U.S. educational institutions, starting small companies—often in the tech field—in hopes of making it big, or at least making a living.

But, how do such small businesses get off the ground?  While many owners do not have the $500K-$1m capital on-hand required to receive an EB-5 investor’s visa, small business can meet their immigration and staffing goals through several other nonimmigrant classifications.  Below is a survey of the three common such visa categories (E-2, L-1, an H-1B)—each with their own requirements and allowances—that qualifying small businesses can use.

The E-2 Investor Visa is for individuals entering the U.S. to develop and direct the operation of a commercial enterprise into which they have invested a substantial amount of capital. The amount of the required investment varies and depends on the nature of the business, but should make it likely that the investor will succeed in developing the business.  Whereas $60K was sufficient for a small restaurant in one case, $140K to open a gas station/convenience store was deemed insufficient by USCIS in another case. More information about the capitalization requirement is available here.  This visa can also be used by key employees from the same country as the investor.  In order to qualify, the E-2 investor must: be a national of a country with which the United States maintains an E-2 treaty, have invested, or be actively in the process of investing, the requisite capital, and the enterprise must be able to provide for more than a minimal living for the investor and his family. E-2 visa holders are generally admitted to the U.S. for a period of up to two years and the status can be extended indefinitely for qualifying enterprises.

The L-1 New Office Visa is for managers and executives that work for a company abroad (including small businesses), but are entering the U.S. to open a new branch, affiliate, or subsidiary company.  As prerequisites: the L-1 worker must have spent at least one continuous year out of the preceding three years working for the affiliated company outside of the U.S.; physical premises must have been secured by the company for the new office; and within one year the U.S. enterprise should be able to support an executive or managerial position. The status is granted for a one year period, after which the company must demonstrate that it is doing business in order for the petition and worker’s stay to be extended further (capped at a maximum of seven years in L-1 status).

The H-1B Visa is the “workhorse” of the U.S. temporary worker system, and allots for 65,000 new professional worker visas for individuals with at least a Bachelor’s Degree annually. An additional 20,000 such visas are allocated to graduates of U.S. Master’s Degree programs.  H-1B status is generally valid for six years, issued in two three-year terms. In addition to proving the position’s merit as a specialty occupation and the employee’s qualifications, H-1Bs for small businesses and start-ups face additional scrutiny due to the nature and size of the petitioner businesses.  Small businesses seeking to hire qualifying H-1B workers often run into Requests for Evidence “RFEs” from USCIS challenging whether an otherwise eligible H-1B position would include non-professional clerical or administrative work due to the size of the company.

In addition to meeting all other H-1B requirements, small business owners desiring to self-petition for H-1B status must also show an employer-employee relationship to qualify—meaning the company must have the right to control the owner’s employment.  An external check on the employee’s authority must be proven, whether this is through a Board of Directors with the ability to control the beneficiary’s employment or possibly through the control of other investors or preferred shareholders. As business structure is a critical component of a self-employment H-1B, it is imperative that in addition to enlisting the assistance of a qualified immigration attorney, the entrepreneur-H-1B works with corporate counsel or an accountant.

While E-2, L-1 and H-1B options are the primary vehicles for entrepreneurs to develop their business in the U.S., activities prior to applying for a visa or change of status must also be carefully considered.  If the individual is in the U.S. on a B-2, F-1, or J-1 visa, the permissible pre-launch business activities are limited and could result in a violation of status.  Conversely, the B-1 Business Visitor visa does permit the holder to perform tasks consistent with forming a company, inclusive of: consulting with clients and business contacts, site visits to premises, negotiating contracts and engaging in other limited non-work activities.

The options available to immigrant entrepreneurs and workers in the U.S. are varied.  Before undertaking what for many is the adventure and risk of a lifetime, be sure to enlist the experience of a Board Certified Immigration Attorney to help understand and navigate the complexities of business and investment visas.

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