Throughout our country’s history there may be only one thing more American than apple pie: starting your own business. This blog will give an overview of the visa options available to those looking to chart their own immigration course.
The available options depend on the kind of business you’re looking to set-up and your individual background.
The B-1 “Temporary Business Visitor” visa classification is actually not an employment-authorized visa classification. The B-1 visa classification however, can be a useful tool for entrepreneurs who are based outside the United States and who are seeking to visit the US on a temporary basis to conduct business activities in furtherance of setting up a new business, or develop and/or expand an existing business, in the United States. Such activities include raising funds, pitching to investors, selling his or her idea, raising capital, and other activities related to business formation such as securing an office lease. However, an individual in the US on a B-1 visa must be careful to not cross the line into “work-related” activities. Once this occurs, the individual will likely need to pursue one of the employment-based visa categories outlined below.
The B-1 Initial period of stay in the US is generally up to 6 months with extensions possible.
F-1/OPT Optional Practical Training
Did you know that you may be eligible for Optional Practical Training (OPT) if you are an F-1 student in the United States and you seek to start a business that is directly related to your major area of study?
An entrepreneurial student may start a business while in F-1 Optional Practical Training (OPT) provided the business is directly related to the student’s major area of study. An F-1 student may be authorized for up to 12 months of OPT, and becomes eligible for another 12 months of OPT when he or she seeks another post-secondary degree at a higher degree level. An F-1 student with a qualifying Science, Technology, Engineering or Mathematics (STEM) degree may apply for a 24-month extension of their post-completion OPT, as long as the company they are working for is “e-verified.”
H-1B Specialty Occupation
You may be eligible for an H-1B visa if you are planning to work for the business you start in the United States in an occupation that normally requires a bachelor’s degree or higher in a related field of study (e.g., engineers, scientists or mathematicians), and you have at least a bachelor’s degree or equivalent in a field related to the position.
The H-1B visa requires the employer to demonstrate that the position requires a bachelor’s degree in a specialized field, regardless of the size of the company.
The key factor in utilizing the H-1B as an option for a start-up visa is that the individual be able to demonstrate an employer-employee relationship. In other words, even though the petitioning company may be solely owned by the beneficiary, evidence will be required to show the company is a separate corporate entity, able to petition on behalf of the beneficiary. For example, the employer-employee relationship may be established by creating a separate board of directors, which has the ability to hire, fire, and pay supervise and otherwise control the beneficiary’s employment. Documents evidencing the petitioning corporate entity’s right of control could include the term sheet, capitalization table, stock purchase agreement, investor rights agreement, voting agreement or organization documents and operating agreements.
In addition to demonstrating control, it is also important to carefully document the business model of the startup entity, and demonstrate that it is either a viable company or is capable of being a viable company imminently.
The H-1B allows an initial period of stay in the United States of up to 3 years with extensions possible in up to 3 year increments. Maximum period of stay is generally 6 years (extensions beyond 6 years may be possible).
For more information on obtaining on the H-1B and startups, please see: H-1B Visa for a Startup Business.
E-1/E-2 Treaty Investor
Perhaps the most oft-used nonimmigrant visa in the start-up context is the E-2 “Treaty Investor” visa. Note, this option is only available to certain “treaty countries” (e.g. Europe, Japan, Argentina; not China, India, Brazil, Russia). For the E-1 visa, the applicant must show substantial trade principally between the United States and the foreign state. For the E-2 visa, nationals of the treaty country must own at least 50 percent of the company, and investments made with the company must be “at risk,” which means that it is possible for the investors to lose their investments. The investment made must also be substantial. The USCIS uses an ‘Inverted Sliding Scale’ to determine whether the investment is substantial in proportion to the overall cost of the enterprise.
If the entrepreneur foreign national has served as a manager or executive for an entity abroad for at least one year, he or she may be eligible for the “new office” L-1A visa to open a branch, subsidiary or affiliate in the US. When utilizing this option, it is important to establish that the beneficiary will still be working in an executive, managerial or specialized knowledge capacity.
The initial period of stay in the United States for the new office L-1A is 1 year and extensions are possible in up to 3 year increments.
The O-1 visa is reserved for those who are able to demonstrate extraordinary ability in the sciences, arts, education, business, athletics, films or television. However, like the H-1B, the O-1 does not permit self petitioning. Also like the H-1B, the crux is to demonstrate whether the entrepreneur who seeks the O-1 status is able to separate themselves from the business by creating a distinct business entity (and take steps similar to those outlined above in the H-1B section of this article).
Due to the unique nature of the O-1 visa, it may be particularly well suited for an entrepreneur. For example, the fact that there is no minimum or prevailing wage obligation required for the O-1 lends itself quite well to a start-up/entrepreneurial setting, where compensation may be expressed in non-salaried ways such as equity or stock options.
The E-3 visa is similar in many respects to the H-1B visa. There are 10,000 visas available each year, they are available for two years and can be renewed indefinitely. Like the H-1B and O-1 visas, it is similarly crucial that an applicant be able to establish, and evidence, and employer-employee relationship with a sponsoring organization. In other words, there must be at least one other person in the company, with the ability to terminate the E-3 applicant’s employment.
A visa status that allows visa citizens of Canada and Mexico whose profession is on the NAFTA list and who hold a bachelor’s degree to work in the United States on a prearranged job. Canadian citizens do not require a visa to work under the TN status (can obtain instantaneously at a port of entry) while Mexican citizens require a TN visa.
Like the H-1B, O-1 and E-3, the ability to utilize the TN in a start-up context depends on whether the applicant can evidence an employer/employee relationship with the sponsoring company. This makes the TN (along with the H-1B, E-3 and O-1), a bit more difficult to set-up than say, the E-2 or EB-5 for entrepreneurial purposes.
EB-5 – Green Card through Investment
Although this post until this point has focused on nonimmigrant temporary visas, it is worth discussing a permanent immigrant visa option, which is the EB-5 green card through investment option that allows investors and their families to obtain permanent residence.
There are several options to pursue the EB-5 based on the amount and type of investment. The basic starting amount is $1,000,000. However, if the investment is in a project located in a “targeted employment area” (TEA), that amount drops to $500,000. Generally, a TEA is either a rural area or an area with high unemployment, which can include large urban areas such as New York City.
The EB-5 can be pursued through a “direct investment” (where you either start or purchase your own business) or by investing in a “Regional Center.” A Regional Center is basically a company that pools EB-5 funds and manages the investment for a fee. Due to securities laws, they are not allowed to advertise, you have to contact them to obtain material.