The Nine Best Immigration Practices for U.S.-Inbound Businesses, Entrepreneurs and Investors
Over more than the last 30 years, I've advised countless foreign businesses and investors seeking to establish operations in the United States. Many thrived, but some, regrettably, failed to survive. Often, the founders' inattentiveness to the requirements of U.S. immigration law has been a primary cause of rough beginnings or failures to launch. This blog post will offer best immigration practices and identify traps to avoid when a foreign firm or individual plans to start a business in America.
1. Respect the Law - It's Not a Game. The U.S. is no doubt the world leader when it comes to the complexity of immigration laws. Too often, foreign owners and corporate executives assume that just getting past the consular officer and the border inspector are the only hurdles in the path of pursuing their U.S. business objectives. Many entrepreneurs and company founders have yielded to the temptation of claiming to be a visitor seeking entry for business reasons when in fact their purpose is to start an enterprise and begin working in the U.S. These "stealth visitors" also tend to jump the gun by issuing a press release announcing their appointment to head the U.S. subsidiary before they even have a proper work visa in hand. Cutting corners on immigration compliance is no way to launch a U.S. business but an excellent way to face stiff fines and penalties, be deported or end up in jail. The Obama Administration, with enthusiastic goading by Congress, has dramatically ramped up immigration enforcement at all levels. Lesson 1: Understand that playing by the immigration rules is the only prudent way to start and operate a new business in the U.S.
2. Develop a Viable Short- and Long-Term Immigration Strategy from the Outset. At the start of every new business, passions and enthusiasm are high. Foreign executives and entrepreneurs often want to obtain the quickest and most easily attained work visa possible. They shop for an immigration lawyer with a low fee who will provide the minimum service need to obtain that visa. Little thought is given to the statements made to the government in the process. Descriptions of the applicant's prior career often are sketchy. Regrettably, in too many cases, long term strategies and initial statements presented to the government in supporting documents provided in order to get the "easy/quick" first visa may be given short shrift. These types of short-sighted thinking often will narrow future options available to obtain a long term visa or a green card (permanent residence). Lesson 2: Take the time to find an experienced immigration lawyer who will outline all options over time and guide the enterprise strategically for the long haul.
3. Consider Tax and Employment Law Consequences. No worthwhile immigration strategy is devised in isolation. Other U.S. laws, especially those relating to taxation and employment, must be considered and harmonized with the long-term immigration plan. After considering all applicable laws, a wealthy foreign citizen may decide that obtaining a green card, and thereby becoming subject to U.S. taxation on worldwide income, is not quite so desirable as first perceived. An E-2 investor visa, allowing easy entry and exit as well as a long-term, perpetually renewable U.S. visa and the right to work (including work permission for the spouse) may be just as functional as a green card and still offer the possibility of less costly non-resident tax status in the U.S. Similarly, employment laws, especially in heavily regulated and litigious states such as California, may warrant the use of professional employer organizations ("PEOs"), temporary employment agencies or vendors rather than direct hiring - strategies that may affect the immigration plan. Lesson 3: Choose a solid, inter-disciplinary team of tax advisors and immigration and employment lawyers, preferably - for the sake of efficiency and convenience - in a single firm.
4. Prepare a Solid Business Plan. Increasingly, U.S. consular officers and immigration agencies are demanding a sophisticated set of supporting documents to assure the government that the proposed business will be viable and likely to result in the hiring of U.S. workers and/or the generation of healthy profits. U.S. immigration officials want to be confident that every work or investor visa issued is in full compliance with law. Officials are alert to a variety of frauds perpetrated by visa applicants who may merely wish to frolic in the U.S. or engage in subversive or criminal activities rather than work. The centerpiece to any employment-based visa application and work-visa petition is a detailed business plan. Here is what the immigration authorities want to see in a "credible" business plan:
- A description of the U.S. business, as well as its products or services, and the firm's business objectives, strategies and goals.
- A market analysis identifying the target market, prospective customer demographics, and the relative strengths and weaknesses of competing businesses.
- A side-by-side comparison of competitors' products or services and pricing.
- A listing of required permits and licenses obtained.
- A process map depicting in words or images the enterprise's manufacturing, production or service-delivery processes, required materials, and suppliers.
- The particulars of any executed contracts for supplies, vendor services and distribution channels. The firm's intended business-development, marketing and sales strategies, including pricing, advertising, customer service and quality assurance.
- A description of the business's organizational and ownership structure and the relevant education and experience of its board of directors and key officers and management.
- An explanation of anticipated staffing levels, a timetable for hiring, and job descriptions for all significant positions.
- Financial projections outlining anticipated sales, costs, income projections and underlying economic assumptions.
- A description of the source of funds used for capital investment, together with proof that the funds were lawfully obtained, deposited with the U.S. business and properly applied for legitimate start-up purposes (e.g., acquisition of premises, equipment, insurance, staff, professional services, etc.)
An immigration-related business plan is not necessarily drafted in the same way as a plan intended for submission to angel investors, hedge funds, venture capital firms or financial institutions. The plan is not "pitching" for financing or investment funding; rather, an immigration-related business plan seeks to persuade the government official reading it that the visa applicant and petitioning entity are serious and bona fide. Lesson 4: Make sure to submit a credible, fully-documented business plan.
5. Gather Foreign-Source Documents and Information Ahead of Time. At the outset of every work-visa application, immigration counsel should provide a detailed list requesting all documents and information needed. The business entities and individuals receiving the list should take pains, before departing for the U.S., to obtain all items and arrange for full word-for-word translations. (The translations need not be officially certified by a government or formal translation bureau, but may be supported by the translator's certificate attesting that the translator is fluent in the particular foreign language and English and that the translation is an accurate word-for-word rendering from the foreign to the English language.) Lesson 5: Think ahead and gather all required papers and data when readily accessible in the home country.
6. Be Prepared for the U.S. Visa Interview and Border Inspection. The first step in preparation is making sure that all information entered into the very difficult online nonimmigrant visa application form, the DS-160, is complete and accurate, and that a digital copy is preserved before uploading (electronically submitting) the form to the consular post or embassy. The visa applicant should review with immigration counsel the likely questions to be posed by the consular official at the visa interview or border inspector at the port of entry as well as the applicant's proposed answers. The applicant should be rested, well dressed and groomed, in business attire, with a minimum of jewelry, makeup or cologne. Any papers carried to the interview or border inspection should be well organized and easily accessed for presentation to the officer. Particulars of the proposed business and job duties, salary, investment amount, etc., should be accurately described, if questions are posed. Applicants should maintain a confident and relaxed attitude but remember at all times that he or she is speaking to a government official with police powers. All statements made must be truthful and complete. Information not asked should not be volunteered. Lesson 6: Treat the consular interview and border interrogation as oral examinations for which preparation is essential and the passing grade is the grant of the requested visa and work-authorized status in the U.S.
7. Pay Heed to Expiration Dates. At the U.S. port of entry, the inspecting officer will confer on firm deputees allowed admission to the U.S. a nonimmigrant work-visa "status" on an entry card known as a Form I-94 (arrival/departure record). The I-94 "departure" portion of the card will note the visa category and the period of authorized status, either a date certain or for some visa categories, a notation ("D/S"), meaning the entrant may remain in the U.S. for the "duration of [lawfully maintained] status." Make sure at the airport or land border that the proper period of authorized admission for the particular visa category is granted and that an improperly shorter period is not noted. Request a correction at that point. One should never allow a passport, visa stamp or I-94 form to expire without first having obtained a renewal or extension. Otherwise, the individual may face serious, adverse consequences such as removal (deportation), detention, and a bar to reentry for up to ten years. Lesson 7: Obtain the right length of status authorization at the port of entry and develop a calendaring/tickler system to renew or extend status long before it expires.
8. Maintain Required Immigration Paperwork and Be Ready for a Government Audit. Employers are required to complete and maintain a variety of immigration paperwork and to present it upon request to the government, and if employing H-1B specialty occupation workers, to any member of the public who asks to see the documentation. The papers (or electronic records) required to be maintained will include the Form I-9 (Employment Eligibility Verification) confirming that each and every U.S. and foreign worker hired has confirmed eligibility to work under an authorized status and has presented documents of identity and work permission for inspection to the employer. The employer in turn must certify on Form I-9 that the documents chosen for presentation by the employee appear genuine and relate to the individual. In the case of an H-1B employer, the business must also maintain a public access folder and relevant payroll and tax records. Lesson 8: Be ready for an immigration-related government audit by preparing and retaining the required business records, and periodically engaging a competent immigration lawyer to audit the firm's immigration compliance practices.
9. Achieve Your Vision of the American Dream but Stay Vigilant about Immigration Compliance. Every new business has big dreams. America encourages entrepreneurial dreamers to pursue their goals within the bounds of the law. Initial business plans, however, may change over time. Companies reorganize, merge, are spun off, sold or dissolved. Job duties may "morph" into new assignments and materially different responsibilities. Foreign employees of the initially sponsoring U.S. firm may desire or need to be transferred to the payroll of an affiliated or wholly unrelated business. Foreign owners, investors and officials of new U.S.-based businesses should realize that employment-based work visas are tethered to the original visa petitioner or sponsor and that material changes in employing entity, job duties, job location and other eligibility criteria may require prior notice and approval of the federal government before the chance is allowed to occur. Lesson 9: Stay in touch with your immigration lawyer and let the lawyer know in advance when changes to the terms and conditions of the initial visa petition and application are likely to arise. Your lawyer can then guide you on required immigration-compliance action items.
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With the U.S. still the largest economy in the world, foreign businesses and individuals still yearn to get a "piece of the pie." As this post has shown, close attention to U.S. immigration laws will make it more likely that the pie will be tasty and satisfying. Welcome to America!