Visa Options for Employees of New Businesses in the United States

When starting up a new business in the United States, many aspects must be taken into consideration. For example, the business will have to be registered or incorporated under U.S. business and corporate laws. Furthermore, the tax treatment of the new business is of key importance. Equally important is finding the right employees to ensure the new business can be successful. This article will discuss the various options Dutch companies and entrepreneurs have to transfer key personnel from the Dutch parent company to the U.S. or to hire foreign nationals either from abroad or already working in the U.S. for another company.

 

1.       L-1 Intracompany Transferee Visa

 

The L-1 intra-company transferee visa is available for a foreign worker who (1) has been employed outside the U.S. by an affiliate, subsidiary, branch or parent of a U.S. company (2) for at least one year in the three years preceding the filing of a petition or for at least one year within the three years preceding admission to the U.S. if filing the petition while the foreign worker is in the U.S., (3) in a capacity that qualifies as executive (L-1A), managerial or functional manager (L-1A) or specialized knowledge (L-1B), and (4) who will perform services for the U.S. company in one of these three categories as well.

If the U.S. company has been doing business in the U.S. for less than one year at the time of filing of the L-1 petition then the petition will be for a “New Office L” and is subject to additional evidentiary requirements in order to sponsor the L‐1 employee.  Documents such as the following should be submitted: a commercial lease to show the U.S. company has adequate office space for operations; bank account statements or wire transfers to show that it has adequate funds to begin operations; a business plan for five years with information about the U.S. company including the type of business, organizational structure, financial goals, and the size of the U.S. investment.   The petition must also include information about the parent company including the organizational structure and the financial ability of the parent company to support the U.S. company. The New Office L is initially issued for one year and can be renewed. It is key at the end of the one year to show that the U.S. company hired additional employees, otherwise USCIS could deny the extension for an L-1A  manager due to lack of employees to supervise. The maximum authorized admission period for L‐1A executives and managers is seven years. The L‐1B specialized knowledge employee is limited to five years.  The L-1 visa allows for dual intent, meaning that the L-1 visa holder can pursue permanent residence without jeopardizing his or her L-1 status.  

The L-1 petition is filed with the United States Citizenship and Immigration Services (USCIS) unless there is a Blanket L Approval (for large multinational companies) in which case the L-1 application is submitted directly at the U.S. consulate abroad.  The employee’s dependent family members (i.e. spouses and unmarried children under 21 years of age) are eligible for L‐2  status,  and  L‐2  spouses  may  also  apply  for  employment  authorization after they arrive in the U.S. in L-2 status.   The employee and his dependent family members must have an L‐1/L-2 visa stamped in their passports for travel out of and return to the U.S.  This application is done at U.S. consulates outside the United States.

 

The L-1 petition is currently highly scrutinized by USCIS and in a large number of cases, additional evidence is requested before the petition is approved. It is possible to pay an additional filing fee (“premium processing fee”) to receive a response within 15 days from the date of receipt of the petition. Without this additional fee, USCIS is currently taking four-five months to adjudicate L-1 petitions.

 

2.       E Visa

 

The E visa categories are designated for foreign workers coming to the United States to work principally as traders, investors, executives, supervisors or essential personnel for an enterprise that holds the nationality of a treaty country and that is:

  • E-1: Engaged in international trade principally between the U.S. and the treaty country (i.e. over 50% of the volume of international trade conducted by the treaty trader is between the U.S. and the treaty country of the treaty trader’s nationality); or 
  • E-2: Engaged in substantial investment in the U.S.  (i.e. investing a substantial amount of capital at risk).

Both the employing enterprise and the foreign national must have the same nationality of a treaty country, which is a foreign state with which a qualifying Treaty of Friendship, Commerce, or Navigation or its equivalent exists with the U.S.  The Netherlands has both an E-1 and E-2 Treaty with the United States. An enterprise that is owned at least 50% by persons of a treaty country is deemed to hold that treaty country’s nationality.  For example, a company with at least 50% of its stock owned by Dutch citizens or by a Dutch company is considered a Dutch enterprise for purposes of the E visa category.  As such, the enterprise may petition executives, supervisors and essential personnel having Dutch citizenship for E visas. 

As mentioned above, the sponsored individual may enter the U.S. to work as an executive, supervisor or an essential employee. Unlike the L-1 visa, it is not required that the sponsored individual is or has been employed by the company abroad in order to qualify for E-1 or E-2 nonimmigrant status.  Furthermore, the individual applying for the visa does not need to be the principal trader to qualify for the E-1 visa nor the principal investor to qualify for an E-2 visa. The applicant must intend to depart the U.S. upon the expiration of E status. However, an application for initial admission, change of status, or extension of stay in E classification may not be denied solely on the basis of an approved request for permanent labor certification or a filed or approved immigrant visa preference petition.

The E-1 and E-2 visa applications are filed directly with the U.S. Consulate in Amsterdam and must include a business plan for five years with information about the U.S. company including the type of business, organizational structure, financial goals; bank statements; evidence of trade or investment and a commercial lease to show that the U.S. company has secured adequate office space. Current processing times at the U.S. Consulate to review E-1 and E-2 applications are at least eight weeks. After the initial review has been completed, the sponsored individual is requested to appear for an interview. Upon approval of the E-1 or E-2 application, the visa can be issued for a period of up to five years with the possibility of extension. Each time the E-1 or E-2 employee travels to the U.S. he will be admitted by Customs & Border Protection (CBP) for a period of two years. If the employee does not travel abroad during those two years then an E-1 or E-2 extension can be filed with USCIS.

Dependents of an E-1 or E-2 nonimmigrant will be admitted under the same classification as the principal. The dependent spouse and children are not required to have the same nationality as the principal applicant. Spouses of E-1 treaty traders or E-2 treaty investors who have been admitted to the United States in E status can apply for work authorization to work with any employer.   

Dutch employees who work for the Dutch parent company may have the option to apply either for an L-1 visa or the E-1/E-2 visa. The E-1 or E-2 visa may be the preferred option for U.S. start-up companies as the visa can be issued for a period of up to five years. In contrast, the New Office L is only issued for one year.

3.       H-1B/H-1B1/E-3 Visa

The H-1B visa is used for the temporary employment of a foreign worker in a specialty occupation i.e. a position that requires at a minimum a Bachelor’s degree in a specific field and the foreign worker holds the relevant degree or equivalent experience. If the foreign worker has a non-U.S. degree or more than twelve years of experience then this should be evaluated to confirm equivalence to at least a U.S. Bachelor’s degree. It is available to foreign workers of any nationality. The H-1B visa petition is filed by the U.S. employer with USCIS.

The H-1B visa is subject to an annual quota. The number of H-1B visas available each fiscal year, which runs from October 1st to September 30th, is only 65,000.  An additional 20,000 H-1B visas are available for foreign workers who have earned a Master’s or higher degree from a U.S. university.  While most employers are subject to the cap and cannot hire an H-1B worker once the cap is reached until the start of the new fiscal year (i.e. October 1st), in certain situations the employer is considered exempt from the cap.  For example, institutions of higher education, non-profit entities related to or affiliated with institution of higher education, and non-profit and government research organizations are exempt.  Also, if the foreign worker currently holds or has held H-1B status in the past, he may also be exempt. During the past several years, the demand for H-1B visas was higher than the annual quota, and USCIS conducted a random lottery among all the H-1B petitions received in the first five business days of April.

The H-1B visa may be requested for an initial period of up to three years.  The maximum total period of time a foreign worker can hold H-1B status is six years. Yearly extensions beyond the six years may be possible if a labor certification application or immigrant visa petition has been filed at least one year prior to the start date of the H-1B extension. Spouses and unmarried children under 21 are eligible for H-4 dependent visa status. They are not allowed to work unless they obtain an independent visa or status that authorizes employment.

The H-1B1 and E-3 visas are similar to the H-1B visa, meaning that these visas require temporary employment of a foreign worker in a specialty occupation and evidence that the foreign worker holds a Bachelor’s degree or its equivalent based on experience. The H-1B1 visa is limited to citizens of Singapore and Chile. The E-3 visa is limited to citizens of Australia. Unlike the H-1B visa which requires the filing of a petition with USCIS, the H-1B1 and E-3 visa applications can be filed directly with the U.S. Consulate abroad. The H-1B1 visa can be issued for eighteen months and the E-3 visa can be issued for two years, both with the possibility for renewal.

 

4.       TN Visa

 

Under the North American Free Trade Agreement (NAFTA), a citizen of a Mexico or Canada may work in a professional occupation in the U.S. provided that (1) the profession is on the NAFTA occupation list (for example, Accountant, Engineer, Economist, Management Consultant); (2) The foreign national possesses the specific listed criteria for that profession; (3) The prospective position requires someone in that professional capacity; and (4) The applicant is going to work for a U.S. employer on a temporary basis.

Canadian citizens can apply for TN status at the port of entry by presenting an application to U.S. Customs & Border Protection. Mexican citizens will have to apply for a TN visa at the U.S. Consulate in Mexico before they can travel to the U.S. in TN status. The TN status can be approved for up to three years with the possibility of extension. The spouse and unmarried, minor children of the NAFTA applicant are entitled to the derivative TD status, but are not granted employment authorization in the United States. The TN is a non-immigrant visa classification and does not allow for dual intent.

 

5.       B-1 Aftersales and B-1 in lieu of H-1B

 

If someone would like to visit the United States for a short period of time for business activity and he or she will not work in the U.S. and will not be paid in the U.S., the B-1 visa for business, or entering under the Visa Waiver/ESTA program, if eligible may be possible. Legitimate business activities allowed under the B-1 visa or visa waiver program include: solicit sales, negotiate contracts, or take orders for work to be performed outside the U.S.; procure goods, components, or raw materials for use outside the U.S.; activities of a professional to arrange employment in the U.S. (i.e. job interview); activities of a foreign investor to set up a U.S. investment or members of the Board of Directors of a U.S. corporation, even if paid a fee by the U.S. corporation.

A foreign national can apply for a B-1 visa at the U.S. Consulate abroad and request the annotation “Aftersales” if he is coming to the United States to install, service, or repair commercial or industrial equipment or machinery purchased from a company outside the United States or to train U.S. workers to perform such services.  However, in such cases, the contract of sale must specifically require the seller to provide such services or training and the visa applicant must possess specialized knowledge essential to the seller’s contractual obligation to perform the services or training and must receive no remuneration from a U.S. source. The B-1 visa is not available to a foreign national seeking to perform building or construction work, whether on-site or in-plant.  The exception is for a foreign national who is applying for a B-1 visa to supervise or train other workers engaged in building or construction work, but not actually performing any such building or construction work. The B-1 “Aftersales” is only issued for a limited period to perform these specific activities under the contract. Thus, it is not a long term work visa and if the services are required on a long term basis then the other visa options as discussed in this article should be reviewed.

Similarly, there are cases in which foreign nationals who qualify for the H-1B visa can be allowed to enter the U.S. under the B-1 visa or visa waiver program to perform the specialized services for a short period of time. An example is to train U.S. workers on the use of a new software or system that is being rolled out in the U.S. The foreign national can apply for the B-1 visa at the U.S. Consulate abroad and request the annotation “in lieu of H-1B”. The application must include evidence that the offered position in the U.S. requires a Bachelor’s degree and that the foreign national has the required degree or its equivalent based on experience. If the B-` visa with the annotation is issued, then the foreign national cannot receive any salary or other remuneration from a U.S. source other than an expense allowance or other reimbursement for expenses incidental to the foreign national’s temporary stay.  He must continue to be employed by a foreign entity that will continue to pay his salary abroad. The “B-1 in lieu of H-1B” category is closely scrutinized by the U.S. consulates at the moment, but may be a solution for a short term need if the criteria are properly applied.

If you would like further information regarding these and other visa options for the United States, please contact Sandra Dorsthorst, Senior Attorney, Foster LLP at [email protected].

 

This article is made available for informational purposes only and does not constitute legal advice.