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Immigration issues
The age of security has resulted in a change in the US immigration landscape. British visa applicants are now all too familiar with the delays for biometrics appointments at the US Embassy in London. The need for enhanced border security and a resolution to the question of undocumented workers have taken Congressional attention away from important employment based immigration developments, such as the exhaustion of H-1B nonimmigrant visas and the serious retrogression in immigrant visa numbers. Yet the pathway for small and medium market enterprises seeking to establish US offices, and to staff them with trusted homegrown talent, remains wide open.
Setting up US operations
US immigration law welcomes foreign businesses to explore the market and to establish operations. The B-1 visa for business visitors permits such foreigners to conduct market research, to meet with prospective customers and vendors and to contract with them. This visa status also enables business visitors to establish a US business, negotiate and enter into a lease for its operation and hire US workers to staff it. B-1 personnel may not, however, cross the grey line of actually working for or being paid by the US business. The validity of the B-1 visa, is determined by the consular officer at the time of visa issuance with a maximum of 10 years for British applicants. Admission to the US is typically for six months, with extensions of stay possible if circumstances merit.
The entry requirements are simplified for business visitors from the UK and other countries for whom the need to apply for a B-1 visa at the US Consulate can be waived. Qualified visitors may apply for admission to the US on the visa waiver program, but in turn must waive their procedural due process rights, such as the right to seek counsel or the right to a hearing, if program eligibility issues should arise at the port of entry. Unlike their B-1 counterparts, visa waiver participants can be admitted for no more than 90 days. Extensions of stay are not possible.
Working for the new US business
For most newcomers, the limitations of the B-1 visa and visa waiver option are soon discovered. The inability to render services to the fledgling company on business visitor status requires immediate consideration of the nonimmigrant work visa options. The L-1 intracompany transferee visa has been designed to accommodate new office situations, that is those US offices that have been doing business for less than one year. It is available to employees who have worked with the transferring company in an executive, managerial or specialised knowledge capacity for one full year in the three years prior to transfer.
The new company must file an L visa petition with the offices of the United States Citizenship and Immigration Services (USCIS) in Saint Albans, Vermont. With the premium processing option, the petition can be evaluated within 15 days. Supporting documentation should include evidence of the enterprise’s formation, its relationship to the British parent or affiliate, financial documentation to confirm the resources of the entity and a business plan demonstrating commercial viability. L visa petitions to staff new offices may be valid only for an initial period of one year, although extensions are possible if operational targets are met.
The E visa may be a more attractive option, particularly if the employee does not satisfy the L-1 threshold requirement of one year employment with the overseas entity. Unlike the L visa, no petition with the USCIS is necessary. The E visa classification consists of two categories, treaty traders (E-1) and treaty investors (E-2). Under either option, the UK entity files an application directly with the US Embassy to demonstrate that the E Treaty requirements have been met.
The most important ingredients of the application are to demonstrate that the new US entity is ultimately 50% owned by British subjects who are residents of the UK, that the visa applicant is British and that the US entity represents a substantial investment (E-2) or engages in substantial trade (E-1) between the US and the UK. Investments that simply provide the visa applicant with a means to earn a living are considered to be marginal and do not qualify. For trader applications, there needs to be evidence that the trade is already in existence and documented by numerous transactions. For startup firms, the E visa is typically granted for an initial period of two years.
Expanding operations
As the US company grows, there is typically a need either to extend the visa status of the initial employees and/or to add additional foreign staff. If the entity has reached business targets that meet the regulatory criteria, the USCIS can approve an L extension petition in two year increments to a maximum of seven years for L visa executives and managers, and five years for specialised knowledge personnel. Similarly, the USCIS may extend E visa status in two year increments.
L and E visas are available to additional qualified personnel and are not limited by a mandated government quota system. Once E treaty status has been accorded to the US business enterprise for the first visa applicant, the US Embassy in London does not require evidence of the threshold qualifying investment or trade documentation for subsequent applications during the validity of the company’s E treaty designation, typically five years. Similarly, for L visa personnel, an individual petition to the USCIS for each intracompany transferee can be avoided with a “blanket” designation, once the US entity has 1,000 employees or realises $25m in income. Both the L and E visas provide derivative L and E visa status to the spouse and permit the spouse’s employment authorisation on application.
Conclusion
The B-1 visa and its waiver program, the L and E visas collectively provide the most accessible means for foreign personnel to establish and then work for the new US business enterprise. The key to ensuring that these options are properly utilised is to address them at the outset with other threshold market analysis considerations.
For more information, contact:
Gibney, Anthony & Flaherty LLP
665 Fifth Avenue
New York, NY 10022
Tel: 001 (212) 688 5151
Fax: 001 (212) 688 8315
E-mail: sjomaltby@gibney.com
Website: www.gibney.com
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