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 soul into their work and endeavor to provide a future for their children. Others are recent graduates of US 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 small businesses like these get off the ground? While many owners do not have the $500K-$1m to invest necessary to receive an EB-5 investor’s visa, small business can meet their staffing and immigration goals through several other nonimmigrant classifications. Below is a survey of the three common 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 US 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. 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 (such as the Philippines), 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 admitted to the US 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 US 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 US; physical premises must have been secured by the company for the new office; and within one year the US 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 beyond one year. Extensions are available up to a maximum time in the US of seven years in L-1 status.
The H-1B Visa is the “workhorse” of the US temporary worker system, and allots for 65,000 new professional worker visas annually. 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 US, activities prior to applying must also be carefully considered. If the individual is in the US on a B-2, F-1, or J-1 visa, the pre-opening business activities are limited and could result in a violation of status. Conversely, the B-1 Business Visitor visa does allow consulting with clients and business contacts, negotiating contracts and other limited non-work activities.
The options available to immigrant entrepreneurs and workers in the US are varied. Before undertaking what for many is the adventure and risk of a lifetime, be sure to enlist the experience of a qualified immigration law firm that provides a personal touch in understanding the complexities of your case.
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Atty. Khurgel is a former USCIS and Department of State Embassy Officer with over ten years of government service and private immigration practice experience. His offices are located in Irvine, California.
