E and L Visas
The Best Options for Foreign Entrepreneurs
Requesting a non-immigrant visa in order to live and legally work in the United States is one of the first steps for those who want to open a business in this country. U.S. visas are multiple and distinguished by the United States and Citizenship Immigration Services (USCIS) with letters of the Latin alphabet (i.e. A for diplomatic visas, B for business and tourist visas, C for transit visas, and so on).
The most interesting non-immigrant visas for those willing to open a business in the United States are the E-1 / E-2 and L -1A/ L-1B visas.
E-1 Visa – For Import/Export Businesses
The E-1 Nonimmigrant Visa is available to any citizen of a Country that is a signatory of a Treaty of Commerce and Navigation or related treaty meant to encourage trade with the U.S. While an E-2 is based on substantial investment in the United States, the E-1 is based on trade between the U.S. and the Treaty country, i.e. Italy.
The law provides original jurisdiction for E visas with the State Dept. and their Embassies and Consulates, so most often it is recommended that an application originate with the U.S. Embassy or Consulate with jurisdiction over the Applicant’s foreign residence. Each Embassy/Consulate has different procedures, but it usually does not take more than 30/45 days to process such a request.
The process involves the completion of certain application forms, and gathering and presenting all the necessary documentation to establish that the Applicant is engaged in "substantial" trade between the U.S. and his/her country. It is assumed there is a valid business established in the U.S. to manage the trade and serve as a base for the Applicant’s services during the approved visa period. The Applicant must be prepared to document the establishment, ownership (at least 50% owned by nationals of the Applicant’s country who are NOT U.S. permanent resident aliens or dual citizens), the amount of existing trade, and prove that at least 51% of the U.S. entity’s trade is between the U.S. and the Applicant’s country. The other 49% of trade by the U.S. entity may be with any other Country or Countries.
It is also necessary to prove that the person coming to the U.S. will be working as an executive or manager, or with a capacity requiring "essential skills". This is documented by showing staffing, payroll, organization and lines of authority/supervision, and related information. Further, it will be necessary to prove the Applicant has the background to serve in such a role. That usually is accomplished through proof of prior management positions with the organization or your education or prior work experience, or by documentation showing you are the majority owner and your role will be to monitor and manage your own investment.
E-2 visa – For Investors in the U.S.
The E-2 visa is the perfect visa for an entrepreneur who wants to start a business in the U.S. (i.e. restaurant, clothing store, or alike) and is planning to invest “substantial” assets in order to make the business operational.
Some specific requirements must be met in order to qualify for an E-2 visa:
The individual making the investment must have the nationality of a country which has a Treaty of Commerce and Navigation with the United States, i.e. Italy;
The investment must be “substantial” in the sense that it must be sufficient to ensure the success of the operation. This regulatory definition is flexible in relation to the nature and quality of the investment. A total initial investment of about US$100,000, depending on the nature of the business, may be deemed sufficient for visa approval, if enough to establish a viable enterprise.
The investment cannot be “marginal”, meaning it cannot be solely to earn a living for the investor and his family. The investment, therefore, should expand job opportunities and have an economic impact in the community.
The investment must be in a real operating enterprise. A speculative or idle investment does not qualify. Real estate investments, unless properly structured, do not qualify either. Uncommitted funds in a bank or similar, are not considered an investment.
The investor must have control of the funds and the investment must be, commercially speaking, at risk. Loans secured with assets of enterprise are not allowed.
The investor must be coming to the U.S. to develop and direct the enterprise. If the person applying for the visa is not the principal investor, he/she must be fully qualified as a supervisor, manager, or possess highly specialized skills. Ordinary skilled or unskilled personnel are not entitled to be considered as “Managers/Specialized Employees”.
Generally, the E visa is issued for a period of five years and is renewable indefinitely as long as the company remains active and operational.
VISA L 1A/L-1B – The Intracompany Transferee Visa
The L visa category is meant to facilitate the transfer of key executives, managers, and persons possessing “specialized knowledge” from operations outside the U.S. to new or existing operations in the U.S. Managers and Executives will come with an L-1A visa while personnel with “specialized knowledge” will come with an L-1B visa.
The visa applicant must have worked full time in one of these Immigration defined roles (manager, executive or with specialized knowledge) for the foreign operations for at least twelve cumulative months within the last thirty-six months. Time spent in the U.S. will not interrupt the one-year requirement but will not be counted toward the fulfillment of this period.
The visa Applicant must be entering to assume one of these defined roles in the U.S., as well. The entry of employees with specialized knowledge (L-1B) is limited to transfers to existing U.S. operations, while a “manager” or “executive” (L-1A) can enter to open a U.S. office. It is possible that the majority owner of the companies is also the “manager” or “executive” asking for the visa. If so, it will be necessary to prove that the owner has been actively serving as a manager or executive with the foreign company for at least 12 months in the last 36 months. A mere owner of a company who is not actively involved in the day-to-day management and therefore does not serve in an executive or managerial capacity in the organizational structure would not technically be eligible for an L-1 visa, while the executive/manager actively involved in the day-to-day management, who may or may not draw a salary as an employee, should be eligible for an L-1 visa.
To qualify for L-1 purposes, the foreign company and the U.S. company must be one the parent, branch, affiliate or subsidiary of the other. That usually happens when one company owns at least 51% of the interest/shares of the other one. A qualifying relationship would also exist when an individual or some third entity controls both the foreign parent company and the U.S. subsidiary. Other variations in ownership structures may qualify, so it is essential to consult a competent immigration attorney to assure whether the L-1 regulations have been met.
It is possible to obtain an L-1A visa to open a new office in the U.S. with very little investment. “New offices” require confirmation of the foreign operations, registration or incorporation in the U.S. for the new entity, a lease for premises to operate, and the commitment of funding for the U.S. operations to carry out the defined plans. A “new office” L-1A visa may be approved for a one-year period, while a transfer to an existing operation may be approved for an initial period of three years. The key to an extension after one year or the initial three-year approval is being able to also define the duties of the Transferee as “executive” or “managerial” through the supervision of others. Therefore, even if the L-1A may be easy to be obtained to open up the U.S. offices, the Applicant will still have to prove the development of the business and the hiring of others to do the day-to-day business of the company in order to extend thereafter.
It is important to point out that the L-1 is for “multinational” companies requiring the existence of foreign operations doing business and remaining “affiliated” throughout the entire L visa period. The closing of the affiliated office the Transferee came from will not affect extensions as long as there remains some other “affiliated” business outside the U.S. that the worker could transfer to in the future. It would take Permanent Residence to be able to close or sell all foreign affiliated operations.
Choosing the best option between the E visa and L visa will mostly depend on how the entrepreneur plans to establish and carry on his/her business. For foreign companies willing to open a U.S. subsidiary, the L visa may be the right choice. On the other hand, investors willing to open a U.S. business or import/export enterprises might find the E visa more appealing. During this planning phase, it essential to consult a knowledgeable immigration attorney, who will explain the investor the different options and choose the strategy that best matches the investor’s business plans and goals.
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