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A Guideline for Foreign Entrepreneurs Who Are Starting Businesses in the United States

With the economy showing signs of recovery, many foreign entrepreneurs are looking for ways to start a business in the United States. To start a business, foreign entrepreneurs need to be authorized to work in the U.S. – which requires securing the appropriate type of visa. This article will discuss the E-1 treaty trader visa; E-2 treaty investor visa, H-1B visa, L-1 visa and the EB-5 green card.

E-1 Treaty Trader Visa

The E-1 treaty trader visa allows citizens of a country with a treaty with the United States (http://travel.state.gov/content/visas/english/fees/treaty.html) to work for a commercial enterprise in the United States, which has at least 50% ownership of that of the citizen. For example, a citizen of Japan may enter as an E-1 treaty trader to perform work for a Japanese trading company in Los Angeles, which is at least owned 50% by Japan. The worker must be entering as a supervisor, executive, essential employee or someone with specialized skills. Furthermore, the enterprise must be engaged in substantial international trade – of which more than 50% of the trade is between the U.S. and the treaty country.

E-2 Treaty Investor Visa

This is one of the most common visas for foreign entrepreneurs. The E-2 treaty investor visa allows citizens of a country with a treaty with the United States (http://travel.state.gov/content/visas/english/fees/treaty.html) to start or purchase a new or existing business in the U.S. The business must be an active commercial enterprise and the investor must own at least 50%. The investor must also irrevocably invest a substantial amount of money into the business and be able to direct and develop the day-to-day operations. The E-2 investor can also hire executives, managers or essential employees to assist in the business so long as they are the same citizenship as the principal investor.

H-1B Visa

The H-1B is traditionally a work visa that allows U.S. employers to hire foreign employees for specialized occupations. The employer-employee relationship requirement generally prevented foreign entrepreneurs from utilizing this visa until the USCIS clarified that it may apply in situations where the employee also owns the company.

Specifically, an owner of a U.S. company may qualify as an H-1B employee if it can be demonstrated that the company/employer has the right to control the owner/employee’s employment. This can be done by giving the right to hire/fire the owner in someone else’s hands, or structuring the board of governors in a particular way. The owner/employee must also meet the general requirements of an H-1B visa (for example, the position must be specialized in that it requires at least a bachelor’s degree, and that the owner possesses that degree).

L-1 Visa

The L-1 visa allows foreign executives, managers and specialized knowledge employees transfer to a U.S. division, satellite office, affiliate office or subsidiary, so long as she has been employed by the foreign company for at least one out of the past three years. The L-1 visa also allows a foreign executive, manager or specialized knowledge employee to set up a new office in the United States. The ‘new office’ visa is valid for one year.

EB-5 Green Card

A foreign investor may be eligible for permanent residency if she invests at least $1 million into a commercial enterprise and hires ten U.S. workers. In rural or high unemployment areas, the investment amount is only $500,000 and showing the ability to create ten indirect jobs.

Conclusion

Foreign entrepreneurs looking to start a U.S. business have several options. However, they should carefully evaluate all of the visas to see which one is the most appropriate. Please feel free to call or email Cedric M. Shen for an initial consultation about your entrepreneurial visa options.