U.S. Work Visas for International Startup Entrepreneurs
Posted on August 28, 2015
Starting a business in the United States is a complex process, so it is easy to overlook U.S. immigration requirements. Entrepreneurs may be unaware of the consequences until they’re faced with a harsh reality when trying to pass through immigration inspection at an airport. The best way to ensure compliance with immigration regulations is to plan as far in advance as possible and to know when it is necessary to obtain a visa.
Issues that should be discussed with counsel before a U.S. business is incorporated include: how long the business has been operating internationally; how long it has been in the United States; who owns the U.S. company; who owns the overseas company; whether the company is supported by a start-up accelerator; whether the company has investors and what their nationality is; the financial status of the company; the company’s market/industry; and whether the entrepreneur is a high-profile individual in their field.
Many entrepreneurs and startups are eager to obtain visa status as soon as possible. However, their expectations need to be consistent with the realities of the visa system. To manage expectations, counsel can provide a detailed description of the visa process, processing times, and requests for evidence, and can also advise on the interplay among the Departments of Labor, State, and Homeland Security.
Under certain conditions, entrepreneurs may engage in limited preliminary business activities in the United States until a company meets visa requirements. Because productive work cannot be done using the Electronic System for Travel Authorization (ESTA) or the B-1 visa, oftentimes entrepreneurs will need to partner with local colleagues, agents, and/or service providers to develop administrative, sales, and operational functions to “plug in” the U.S. business.
…expectations need to be consistent with the realities of the visa system.
Preliminary business activities permitted under the B-1 visa and ESTA include: filing paperwork to incorporate the business and registering the business with the IRS, coordinating banking, obtaining an office lease, negotiating contracts, consulting with business associates, finalizing vendor agreements, researching, networking, and attending conferences and seminars.
Temporary business visitors should continuously re-evaluate their business activities in the United States, as any of the following could trigger the need for a change of immigration status: 1) being paid from a U.S. source; 2) undertaking productive work; 3) lacking a residence/permanent address outside of the U.S.; 4) intending to settle in the United States permanently; 5) having no return plane ticket abroad; 6) participating in management of the business while in the U.S.; 8) having the principal place of business and profit in the U.S.; and 9) having no office outside of the United States.
Once the U.S. business is running, productive work beyond preliminary allowable activities will trigger the need for a visa. To lawfully work in the U.S. a work-authorized status is required and typical start-up visa categories include E, L, O, and H-1B. Below is an overview of these visa categories, which will be the focus of a series of articles covering each one in more detail:
An E visa may be granted to an entrepreneur who has invested or is in the process of investing a substantial amount into a real and operating U.S. business or who is carrying on substantial trade between the U.S. and their country of citizenship.
Because the investor is required to trace the at-risk investment and/or trade, it is extremely important to keep organized records pertaining to: transferred funds to the U.S. enterprise, business expenses (including lease, office equipment, and market research), commercial transactions (purchase orders, service contracts, sales contracts, manufacturing deals), customs documents and proof of customs bond, bills of lading, vendor agreements, and payroll. Since the E visa requires demonstration of economic stimulus, a five-year business plan is necessary.
An L-1 visa may be granted to a manager, executive, or specialized knowledge individual to work at a U.S. company provided they worked at an affiliate or parent company abroad for at least one continuous year.
If the start-up has been doing business for less than one year, a physical office must be secured and the company must submit a business plan and corroborating evidence to show the nature, scope, and organizational structure of the company. Additionally, funding for the first year of operation must be demonstrated. At the time of renewal, the company must show that the business could sustain itself for an additional two years and that the duties of the entrepreneur are geared toward oversight of staff and business development. USCIS expects that start-up would add staff within the first year.
O-1 visas are reserved for individuals with extraordinary ability. This is an option to be explored for high-profile start-up founders involved in prestigious business accelerator programs and/or who have changed the landscape of their field. Substantial evidence must be submitted including awards, press, media, reports, and letters to demonstrate the individual is at the top of their area of endeavour.
H-1B visas are reserved for specialty occupation professional workers. The company must offer a job that requires a bachelor’s degree or the equivalent in a specific field, which the non-U.S. worker must hold. H-1Bs are sometimes challenging for start-ups because they require demonstration that the employee will be controlled by the employer. As such, if a co-founder is the sponsored employee, evidence demonstrating an entity’s discretion over their employment should be submitted. Additionally, the company must demonstrate gross revenue which may include investment income.
For more news and updates, assistance with your visa needs or for a Free Assessment of your profile for Immigration or Work Visa’s just visit www.y-axis.com