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Entrepreneurs have played a large part in shaping the U.S. economy. Their innovation and willingness to start a business is beneficial to the United States and its citizens as a whole. However, foreign nationals starting a business in the United States require a proper visa or green card.

There has been a lot of debate in Congress and the Senate about how to allow entrepreneurs remain in the United States in order to start their businesses. These include proposals about “stapling a green card” to every foreign national who graduates from a U.S. college with a major in a STEM (Science, Technology, Engineering, Math) program. While we await the anticipated immigration reform changes by the President Obama in 2013, let’s review some of the existing options for foreign entrepreneurs in the United States.

OPT/STEM extension

Foreign students who graduated from a SEVIS-approved United States post-secondary institution are eligible to work under Optional Practical Training (OPT). This is a one (1) year open work permit with no restrictions as to the type or scope of employment. Many graduates on OPT end up working for U.S. employer who sponsor them for other work visas such as H-1B or TN.

OPT is valid for up to one (1) year, with no extensions permitted. However, graduates with a degree in the STEM program are eligible to extend their OPT for an additional seventeen (17) months – for a total of almost two years.

H-1B Visa

The H-1B allows foreign nationals to work for US employers in a “specialty occupation,” such as lawyers, doctors, physical therapists, graphic designers, account managers, etc. Approval of an H-1B visa requires meeting certain criteria: 1) a bachelor’s or higher degree or its equivalent is normally the minimum entry requirement for the position being offered; 2) the degree requirement for the position being offered is common to the industry, or the job is so complex or unique that it can be performed only by an individual with a degree; 3) the employer normally requires a degree or its equivalent for the position being offered; and 4) the nature of the specific duties is so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s degree or higher (i.e. Master’s, MBA, J.D., PhD., etc.)

65,000 H-1B work visas are issued every fiscal year. Congress has allotted an additional 20,000 visas for employees with a master’s degree or higher. The fiscal year begins on October 1st and the USCIS begins accepting applications on April 1st.

The USCIS originally interpreted the H-1B regulations to mean that a skilled worker who is in the United States in H-1B status could found a company but could not work for it. However, the USCIS clarified in 2011 that such owners on H-1B visas could in fact work for their own companies if it was full-time and they are treated as an employee. For example, if the company was structured in a manner that a board of directors had authority to hire, fire, pay, supervise or control the foreign national as they would with any other staff member, then he/she may be permitted to work in H-1B status.

O-1 Visa

The O-1 visa is for the individual who possesses extraordinary ability in the sciences, arts, education, business, or athletics, or who has a demonstrated record of extraordinary achievement in the motion picture or television industry and has been recognized nationally or internationally for those achievements. The O non-immigrant classification is commonly referred to as:

O-1A: Individuals with an extraordinary ability in the sciences, education, business, or athletics (not including the arts, motion pictures or television industry

O-1B: Individuals with an extraordinary ability in the arts or extraordinary achievement in motion picture or television industry

To qualify, the beneficiary must demonstrate extraordinary ability by sustained national or international acclaim and must be coming temporarily to the United States to continue work in the area of extraordinary ability. Extraordinary ability in the fields of science, education, business or athletics means a level of expertise indicating that the person is one of the small percentage who has risen to the very top of the field of endeavor. Extraordinary ability in the field of arts means distinction. Distinction means a high level of achievement in the field of the arts evidenced by a degree of skill and recognition substantially above that ordinarily encountered to the extent that a person described as prominent is renowned, leading, or well-known in the field of arts.

L-1 Visa

Transferring to a U.S. company

If an entrepreneur is opening up a United States location for a branch, affiliate, or parent company overseas, the L-1 visa also allows a foreign company that does not yet have an affiliated U.S. office to send a manager/executive to the United States for the purpose of setting one up. To do so, the entrepreneur must demonstrate that: 1) sufficient physical premises to house the new office have been secured; 2) the employee has been employed as a manager/executive for one of the three previous years; and 3) the new U.S. offices will support an executive/managerial position within a year of the L visa being issued. These employees will be granted an initial one-year L visa. This is an ideal visa for entrepreneurs looking to expand to the United States and should be considered as an alternative to the E visa.

E-2 Visa

The E-2 visa allows foreign entrepreneurs who are citizens of a country that has a treaty with the United States, to make an investment into a new or existing business enterprise. Generally, the investment must be substantial, at risk, and the investor must oversee and direct the day-to-day operations. The visa is valid for three years, and is renewal indefinitely so long as the business continues to operate.

What is a ‘substantial investment’?

The term “substantial” for an E-2 visa is not clear-cut. The unwritten rule of thumb is that the investment should be at least $250,000.00 USD if the business/enterprise is new. There may be some cases where the investment is as low as $50,000.00. However, these cases usually involve businesses that act as a subsidiary to a parent company in the foreign national’s home country. In these types of situations, the investor may also want to consider an L visa..

What does ‘at risk’ mean?

This means that the investment must be at risk of being lost of the business is unsuccessful. This may be done be entering into contracts or agreements for services or rent, purchasing merchandise or equipment, or hiring staff.

Pros and cons

The E-2 visa is a great vehicle for foreign entrepreneurs to live in the United States while operating a business. One advantage is that the application can be processed within three weeks under Premium Processing. Another advantage is that the visa is valid for three years, and renewable indefinitely so long as the business continues to operate.

The disadvantage is that the investment amount can be significant, and the entrepreneur risks losing all the money and being forced to return to his/her home country if the business is unsuccessful. There is also no direct path to permanent residency on an E-2 visa. While an E-2 visa holder may obtain permanent residency through employment or marriage, the E-2 visa itself does not make one eligible for permanent residency.

EB-1 Green Card

Certain foreign entrepreneurs may be eligible for EB-1 permanent residency if they have an ability that is “extraordinary,” or if they are a multinational executive or manager. Each category has certain requirements that must be met. The EB-1 green card is reserved for an exclusive group of people, though there is no restriction with respect to education or profession. It can be anybody who is one of the very best at what they do: a Michelin-award winning chef, an Olympic medal-winning athlete, a Nobel Prize-winning scientist, a published author, a renowned professor, or an Academy Award-winning actress.

The foreign entrepreneur must be able to demonstrate extraordinary ability in the sciences, arts, education, business, or athletics through sustained national or international acclaim. The achievements must be recognized in his/her field through extensive documentation. No offer of employment is required.

The applicant must meet 3 out of the 10 listed criteria below to prove extraordinary ability in the field:

Evidence of receipt of lesser nationally or internationally recognized prizes or awards for excellence
Evidence of membership in associations in the field which demand outstanding achievement of their members
Evidence of published material in professional or major trade publications or other major media
Evidence that the applicant have been asked to judge the work of others, either individually or on a panel
Evidence of original scientific, scholarly, artistic, athletic, or business-related contributions of major significance to the field
Evidence of authorship of scholarly articles in professional or major trade publications or other major media
Evidence that the applicant’s work has been displayed at artistic exhibitions or showcases
Evidence of performance of a leading or critical role in distinguished organizations
Evidence that the applicant commands a high salary or other significantly high remuneration in relation to others in the field
Evidence of commercial successes in the performing arts
Multinational manager or executive

If a foreign entrepreneur has an extensive business background, he/she may qualify for an EB-1 as a multinational manager or executive. To do so, the foreign entrepreneur must have been employed outside the United States in the 3 years preceding the petition for at least 1 year by a firm or corporation and he/she must be seeking to enter the United States to continue service to that firm or organization. The employment must have been outside the United States in a managerial or executive capacity and with the same employer, an affiliate, or a subsidiary of the employer. The petitioner must be a U.S. employer, and it must have been doing business for at least 1 year, as an affiliate, a subsidiary, or as the same corporation or other legal entity that employed the foreign national abroad.

EB-2 Green Card

The EB-2 category is reserved for individuals of exceptional ability in the arts, sciences or business; individuals with advanced degrees (M.D., J.D., LLM, Ph.D. etc.); and foreign doctors who will practice in an underserved area in the U.S. Foreign nationals who qualify for an EB-2 green card must have an employer who is willing to file a petition on his/her behalf.

National Interest Waiver

National interest waivers are usually granted to foreign entrepreneurs who have exceptional ability and whose employment in the United States would greatly benefit the country.

EB-5 Green Card

If a foreign entrepreneur invests $1 million into a business within the United States and creates at least 10 jobs, then he/she may be eligible for an EB-5 green card. The requirement is reduced to $500,000 and 10 indirect jobs if the business is located in a rural or high unemployment area.

As you can see, there is no shortage of options for a foreign entrepreneur to obtain a valid U.S. visa or green card. Please feel free to contact us for an evaluation of the most viable options for you.