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Bar News - December 14, 2012

Business Law & Business Litigation: Trade and Visa Options for Foreign Entrepreneurs


The US economy benefits tremendously from the longstanding practice of investment by foreign entrepreneurs. Current foreign investment in US enterprise has resulted in the employment of more than 5 million Americans directly, and if one considers indirect employment, estimates put that number closer to 20 million.

According to a recent report by the Fiscal Policy Institute, in 2007, small businesses in which immigrants held at least a 50 percent equity interest generated an estimated total of $776 billion in revenue. The method by which foreign entrepreneurs continue this tradition of investment in US enterprise varies, but for those who wish to take an active role in the management of their investments from American soil, an employment- or investor-based visa is required. Following are a few examples of visa classifications suited to, or simply designed for, those with an entrepreneurial bent.

Under specific trade and investment treaties, foreign entrepreneurs may be eligible for "temporary" nonimmigrant visas in the E-1 or E-2 categories, allowing them to invest in business operations in the US or conduct substantial trade between a US enterprise and one in their home country. There are currently more than four dozen foreign countries that have signed qualifying treaties with the US.

The E-1 visa category is available to foreign nationals of treaty countries who undertake sufficient international trade with the US. Such trade must constitute the majority of the trader’s international trade (i.e. 50 percent or more of the trader’s total exports/imports). Although there is no specific minimum amount of trade required to qualify for E-1 consideration, the volume of trade must justify the trader’s or his/her employee’s US presence managing the trade. The greater the volume, the more likely one is to qualify as a treaty trader.

The E-2 visa category is available to foreign nationals seeking to invest in US enterprise if the value of money or goods they plan to invest is deemed substantial, considering the nature of the business. The investment amount must be enough to properly capitalize the business venture. A manufacturing facility would seemingly require a greater investment than, say, a professional office providing business services.

Of a more long-term nature are the EB-2 and EB-5 visa categories. In these two categories, qualifying foreign nationals and specific family members are granted permanent residence status and are issued so-called "green cards." Permanent residence status confers on such beneficiaries many of the rights and privileges enjoyed by American citizens, and it provides a path to US citizenship through naturalization.

The EB-2 visa classification includes foreign nationals with advanced degrees and individuals of exceptional ability in the arts, sciences, or business. Generally, an applicant for an EB-2 visa must have a job offer from a US enterprise that necessitates the specific skill set of the foreign worker and a determination by the US Department of Labor that such employment will not adversely affect the labor market. However, these requirements can be waived under existing law if the petitioner demonstrates that approval of the EB-2 visa petition would be in the national interest of the US, the so-called National Interest Waiver.

The EB-5 investment visa category is aimed at foreign entrepreneurs willing to contribute $1 million dollars in US enterprise anywhere in the country, or $500,000 in a qualifying project located in a rural or high unemployment area characterized as economically disadvantaged. The investment must create or preserve at least 10 full-time, permanent jobs for qualified American workers within two years of the investor’s admission into the US.

Since the events of 9/11, America has witnessed a backlash toward immigration in general. National security and job preservation for Americans has been at the forefront of an emotional debate over US immigration policy. After more than a decade of political wrangling, it appears that Congress is again recognizing the value of foreign entrepreneurs as one cog in the machine that fuels a strong American economy. Both the House and the Senate have introduced similar legislation this year seeking to direct the Secretary of Commerce and relevant federal departments and agencies to "produce a report on enhancing the competitiveness of the United States in attracting foreign direct investment..." with emphasis on, among other things, the "potential impact upon US ability to attract foreign direct investment when evaluating proposed legislation or regulatory policy."

The Department of Homeland Security has proposed efforts of its own to encourage economic development through foreign investment, such as streamlining the EB-2 "green card" application process for those with exceptional ability or who qualify for the National Interest Waiver; expanding the expedited adjudication process known as Premium Processing to include applicants of the EB-5 investor visa program; and providing clarity on the H-1B eligibility of entrepreneurs with an ownership stake in their own companies, including sole employees, who may be able to establish the necessary employer-employee relationship.

As one might surmise, the application process to qualify for a visa is a thorough and exhaustive one. First, and foremost, documents must be produced in English, which can prove challenging for some foreign investors. An English translation must be produced if documents are written in another language. An applicant must also establish that their investment capital is from a "lawful" source, that the investment amount is appropriate for the type of business, and that their ongoing income will allow them to sustain the investment. In some cases, the applicant must show he or she possesses skills commensurate with the opportunity and generally will be required to demonstrate that the investment or business will provide a livelihood for US workers.

Many immigrant investors have fallen to common pitfalls, derailing their applications and sending them packing before they even arrive on US. soil. Investor visa applications are complex and involve a combination of federal immigration regulations, investment and financial due diligence, and a thorough understanding of the unique objectives and overlapping roles of each governmental agency charged with administering the process.

Only through careful planning and qualified professional advice can obstacles and, ultimately, failure, be avoided. Federal administrative agencies are unforgiving in this realm, and foreign nationals need an experienced immigration attorney who can help navigate and manage the process effectively if they are to be successful.

Kermit J. Zerr is an accomplished immigration attorney and entrepreneur who represents business clients in all phases of hiring and transfer of foreign nationals to the US, as well as individuals who do not require corporate sponsorship to immigrate due to extraordinary ability in their field or because of their substantial investments in America.

Supreme Court Rule 42(9) requires all NH admitted attorneys to notify the Bar Association of any address change, home or office.

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