How can a BUSINESS PERSON live and work in the United States?
The following information is provided by a leading Florida law firm specializing in Immigration Law issues.
The easiest way to explain how a businessperson can live and work in the U.S. is to begin with a summary of U.S. immigration law.
U.S. Immigration has two main categories: Permanent Residence Visas (also called “immigrant visas” or “green cards”) and Temporary Residence Visas (also called “non-immigrant visas”).
Permanent Resident Visas (Green Cards)
Green Cards allow PERMANENT residence in the U.S. A person with a green card can generally live anywhere in the U.S. and can work for anyone without restriction. But, a green card is difficult to get. There are four main ways to get a green card:
1. Family sponsored green cards – To qualify for a family sponsored green card, you must have a very close relative who is a U.S. citizen or permanent resident (green card holder). Husbands and wives of U.S. citizens, parents of U.S. citizens, and children under the age of 21 of U.S. citizens (including step children) have top priority and can qualify for a green card relatively quickly.
Other family members, such as husbands and wives of permanent residents, children over the age of 21 of U.S. citizens and permanent residents, and brothers and sisters of U.S. citizens can also qualify for family sponsored green cards. But, these family members must wait for a green card to be available (there are waiting lists), which can take anywhere from five to 15 years!
On occasion, a business person who is not married and may qualify for some other type of green card ends up marrying a U.S. citizen. When this happens, a family sponsored green card can be one of the fastest and least expensive ways to qualify for permanent residence. However, the U.S. government is very strict about proving that the marriage is bona fide and usually the franchise investor who marries a U.S. citizen must show that he or she is still married and living with the U.S. citizen two years after issuance of the green card in order to remain in the U.S. Family sponsored Green Cards are not a common strategy for a business person, but it happens on occasion.
2. Employment Based Green Cards – Employment based green cards are often the best possibility for business persons.
There are five types:
EB-1: For aliens with extraordinary ability, outstanding professors and researchers, or multinational business managers and executives.
EB-2: For aliens with exceptional ability or aliens with advanced degrees (employer/sponsor required).
EB-3: For professional workers (with university degree), skilled workers and unskilled workers (employer/sponsor required).
EB-4: For religious workers.
EB-5: For aliens who invest $1 million and create 10 new full time jobs (in limited situations, an investment of $500,000 is acceptable).
Processing times for employment based green cards vary widely. An EB-1 or EB-5 application can be approved in less than 1 year. However, an EB-3 application could take more than 5 years.
Note that if an applicant qualifies for an employment based green card, his or her spouse and children under 21 will automatically be eligible as well as subject only to a background check.
For business persons, the EB-1 category for “multinational business managers and executives” and the EB-5 category for “immigrant investors” are the categories most often used to qualify for a green card.
To qualify for the EB-1 Multinational Manager or Executive Green Card, an applicant must prove all of the following:
- There must be a U.S. company or organization that is active and conducts regular and systematic operations. We call this the “U.S. Employer.”
- There must be a company or organization located outside of the U.S. that is active and conducts regular and systematic operations. We call this the “Foreign Employer.”
- The U.S. Employer and the Foreign Employer must be related entities, which means that one entity must own the other or the same person or persons must own a controlling interest in each entity. The applicant must have worked for the Foreign Employer for at least 1 full year as an executive or manager prior to coming to the U.S.
- The applicant must work for the U.S. Employer as an executive or manager NOW or AFTER the green card is approved.
- The U.S. Employer must prove that it has the “ability to pay” the applicant at the time the green card application is filed AND at the time the application is approved.
To qualify for the EB-5 Immigrant Investor Green card, an applicant must prove all of the following:
- The applicant must invest in a new commercial enterprise.
- The applicant must participate in the management of the enterprise.
- The applicant must make the required investment. This is usually $1 million, unless the business is located in a targeted employment area (a farm area or area of high unemployment). The investment requirement in a targeted employment area is $500,000. The investment must be in the business and can include the business real estate, the equipment, inventory, improvements to premises, fixtures, franchise fee, and other start-up expenses.
- The investment business must create 10 full-positions for U.S. workers within 2 years (exception—if the investment is in a “troubled” business, then this requirement can be met if 10 jobs are preserved rather than created).
- The applicant must clearly demonstrate the source of investment funds.
3. Green Card Lottery (diversity green card) – The green card lottery (diversity green card) is government program designed to increase immigration from countries that do not produce a large number of immigrants to the U.S. Only people born in certain countries can qualify (for example, people born in Canada, Mexico, England, India, China, and the Philippines can not participate).
Each year the government selects 100,000 winners for 50,000-55,000 green cards. The government assumes that some winners will not qualify. The time to enter the green card lottery changes every year, but it is usually between October and December. For more information, see the government’s lottery website: www.dvlottery.state.gov.
Because of current legislative developments in the United States, the Green Card Lottery may not exist for much longer.
4. Political Asylum – While not pertinent for franchise owners, this is one way to qualify for a green card. To qualify, an applicant must prove he or she has been persecuted in the past or has a well founded fear of persecution in his or her home country based on race, religion, nationality, political opinion or membership in a particular social group. Asylum applicants may apply for asylum even if he or she entered the U.S. illegally or if he or she is in the U.S. on an expired visa/I-94. Generally, asylum applicants must apply for asylum within one year of their arrival in the U.S. but there are several exceptions which will allow the filing of an asylum application after one year.
Temporary Visas – Many immigrants prefer to be in the U.S. before or during a green card application. Therefore, they first come to the U.S. on a temporary visa. There are about 30 different kinds of temporary visas. The most common temporary visas are as follows:
- B-1/B-2 Visitor Visas, which permit a visitor to remain in the U.S. for up to six month (employment is not permitted).
- E-1 Treaty Trader Visas, are available to people who will enter the US solely to carry on substantial trade, including trade in services or trade in technology, principally between the U.S. and the foreign country of which the person is a national. The US and the trader’s home country must have a ratified treaty of “friendship, commerce, and navigation,” or have some other diplomatic agreement that allows for treaty trader status. At least 50% of the ownership of the trading firm must be in the hands of nationals of the visa applicant’s home country. To be eligible for an E-1 visa the person should be an owner, manager, executive, or hold an “essential” position within the company. The applicant must also be a national of the treaty country.
- E-2 Treaty Investor Visas, which permit investors from certain countries to invest a substantial amount of money and acquire a controlling interest in an active U.S. business. The visa is issued for up to five years and is renewable. The investor can work in his or her own business. The spouse can qualify for an unrestricted temporary work card. Children up to the age of 21 can accompany the parents and attend school, but cannot work. This is the most common Temporary Visa for a business person. See below for more information and a comparison with the EB-5 Visa.
- F-1 Student Visas, which permit foreign students to attend U.S. educational institutions. Limited employment is permitted in some cases.
- H-1B Visas for Workers in Specialty Occupations, which permit employment of professional level workers by a sponsoring employer. The visa is issued for up to three years and can be renewed another three years (additional renewals are possible in some cases).
- J-1 Visas for Participants in Exchange Programs, which permit business trainees to come to the U.S. to learn about an occupation or profession for up to 18 months.
- K-1 Visas for a Fiancé(e) of a U.S. citizen.
- K-3 Visas for a Spouse of a U.S. citizen.
- L-1 Visas for Multinational Managers, Executives and Specialized Knowledge employees who are being transferred to the U.S. by a related international company.
- O-1 Visas for Aliens with Extraordinary Ability who are seeking temporary employment. This visa is issued for up to three years and can be renewed in one year increments.
- P-1 Visas for Internationally Recognized Entertainment Groups and Athletes.
- R-1 Visas for Religious Workers who are being transferred to the U.S. by a related international church.
- TN Visas for certain professional workers from Mexico and Canada. This visa is issued for three years and can be renewed in three year increments.
As you have probably seen by now, the EB-1 or EB-5 is the most common permanent visa for Business persons and the E-2 is the most common temporary visa for Business persons. Below we have provided a summary of the major differences between the EB-5 and the E-2.
Summary of Main Differences between E-2 Treaty Investor Visa and EB-5 Immigrant Investor Green Card
|Status upon approval
|An E-2 investor has a non- immigrant (temporary) status in the U.S. The visa has an expiration date and must be renewed (usually every 5 years). The E-2 investor can live in the U.S. full time and work for the E-2 visa company while he or she has E-2 status, but must depart if status expires.
|An EB-5 investor will have conditional permanent residence status in the U.S. for two years with no restrictions on employment or travel. Once the investor removes the conditions in 2 years by showing maintenance of investment and job creation, he or she will have unrestricted permission to live in the U.S. permanently.
|Main difference: E-2 is temporary and EB-5 is permanent.
|There is no minimum investment, but often lawyers advise an investment of at least
$100,000 in cash or other capital assets (e.g. equipment or inventory transferred from abroad).
|$500,000 investment in cash or other capital assets is required if the business will create jobs in a high unemployment area or agricultural area. Otherwise, $1 million investment is required. If the EB-5 is part of a regional center, the program will often charge an extra fee of around $40,000.
|Main difference: EB-5 requires more money.
|Usually valid for 5 years, though some embassies give a shorter validity periods for first time investors or because reciprocity rules require it. The visa can be renewed an unlimited number of times.
|The conditional green card will be issued for 2 years. Once the conditions are removed, the investor will receive a 10 year green card that can be renewed. The investor is eligible for U.S. citizenship in 5 years.
|Main difference: EB-5 requires much less involvement of investor.
|Processing time for applications
|U.S. consulates abroad generally review and approve E-2 visas and processing times vary among consulates. Usually 4-12 weeks.
|The EB-5 has a two-step application process. The first step usually takes 7 months and the second step takes about 6 months.
|Main difference: E-2 is faster to get.
|Percentage of ownership required in the U.S. business
|The E-2 investor must have a controlling interest in the
U.S. business, which is generally defined as a minimum of 50% interest if there are two owners or a minimum or 51% interest or more if there are more than two owners.
|The EB-5 investor can own any amount of the company as long as he or she has some ownership percentage and as long as his or her investment is classified as a capital contribution and not a loan.
|Main difference: EB-5 requires smaller ownership percentage.
|Classification of financial investment
|Generally, the consulates and USCIS want to see the investment classified as a “capital contribution” or “additional paid in capital” in the company balance sheet. They sometimes do not mind if the investment is classified as a “shareholder loan” but this should be avoided.
|The investment must be classified as a “capital contribution” or “additional paid in capital” in the company balance sheet.
|Participation of the investor
|The E-2 investor must be coming to the U.S. to “direct and develop” the E- 2 company. The consulates want to see that the investor will be actively engaged in the management of the company. The investor must show he or she is qualified to manage a company through education or prior work experience.
|The EB-5 investor must be actively involved in the management of the new commercial enterprise (day- to-day or through policy formulation). This requires must less involvement. Even a limited partnership interest is acceptable.
|Date of formation of investment company
|If the E-2 investment purchases an existing company, it does not matter when that company was formed.
|The EB-5 investment company must be established after November 29, 1990 (or it must be shown that a business formed before 1990 has been substantially reorganized or the investment results in a 40% increase in net worth or employees).
|Main difference: the date an acquired business is formed is important for an EB-5.
|Proving source of investment funds
|The E-2 investor must document how the investment funds were earned (or capital assets acquired) and transferred to the U.S. to show ownership and control of the investment.
|The EB-5 investor must show that the investment funds were obtained through lawful means. This requires much more detailed documentation including 5 years of tax returns from U.S. and/or last country of residence.
|Main difference: EB-5 requires more evidence on source of funds.
|The E-2 investor must show that the business will not be “marginal.” This can be proven if the business makes a significant economic job contribution through job creation or produces more than a living wage for the investor.
Employees are not required if the business produces more than a living wage for the investor (but they are recommended). Direct or indirect job creation can be considered (though direct employment where employees are on payroll is better). There is no minimum number of employees required (but the more the better).
|The EB-5 company must create 10 new full-time positions within 2 years. These must be at least 35 hours per week. Employees must be on payroll. Only U.S. workers and not the investor or his/her family are considered. Exception—In lieu of the creation of 10 new jobs, an EB-5 investor can show the preservation of 10 jobs for at least 2 if the EB-5 company is a “troubled business” (has a loss equal to 20% of its value for 1 out of the past 2 years). Exception 2—If the EB-5 investment is in a regional center, then the job creation requirement can be met by showing the indirect creation of 10 jobs per investor. These do not have to be employees on the payroll of the EB-5 company.
|Main difference: EB-5 requires much more job creation.
|Employees from same country
|E-2 regulations allow an E- 2 investor to hire employees from the same country if the employee will perform a management level or essential function.
|EB-5 regulations do not permit employees from the same country.
|Main difference: only E-2 allows employees from same country.
|Inadmissibility (e.g. criminal issues)
|If an E-2 investor is in admissible due to criminal history or other grounds, it may be possible to get a 212(d)(3) non-immigrant waiver that would permit admission of the otherwise inadmissible investor into the U.S. (note this adds 4-6 months to the processing time).
|If an EB-5 investor is inadmissible due to criminal or other grounds the waivers are more limited. The investor may have to show extreme hardship to a U.S. citizen relative or that the conviction was more than 15 years ago.