Foreign Entrepreneurs Must Avoid These Immigration Pitfalls
Having helped hundreds of foreign-born entrepreneurs and executives through the U.S. immigration process as an immigration lawyer for over a decade, I have seen a few stumbling blocks repeat themselves. If you are aware of these traps now, you can avoid a host of future headaches.
Underestimating The Time Commitment
Particularly in the current immigration climate, with record numbers of government challenges and processing delays, entrepreneurs often underestimate the amount of time and energy required to obtain the proper work authorization in the United States. It is understandable that as a founder you are placing all of your time into making sure that there is a viable market for your business, but it is critical to remember that without proper immigration status, you will be unable to pursue any endeavors no matter how promising your company is and no matter how much money investors might send your way.
It is important to understand that the visa categories most often utilized by foreign entrepreneurs and executives of a newly formed U.S. company will take anywhere from two to six months to prepare and process in most cases. Build this into your roadmap.
Failing To Think About Entity Relationships And Equity Considerations
Most immigration options that exist for foreign founders require the establishment of a legal entity in the United States. Although the actual setup of such an entity can normally be completed within a matter of weeks, what is often not understood are the implications of equity distribution and the importance of corporate relationships between U.S. and foreign entities. For example:
• The E-2 treaty investor visa, which is a popular option for foreign founders from certain treaty countries, requires that at all times the U.S. legal entity be majority-owned by a treaty country national or group of nationals from the same treaty country. If after raising capital that ownership stake drops below 50%, the E-2 visa is no longer a valid option, potentially leaving an E-2 visa holder in a situation where they are considered not to be maintaining valid visa status.
• The L-1 visa option for multinational executives and managers requires there to be a parent/subsidiary, affiliate or branch relationship at all times between the U.S. entity and any existing and operational foreign company. This is a critical requirement that must be proven as part of any L visa submission and must be maintained for the duration of an L visa stint and related green card filings.
• Other options, such as the H-1B, E-3, TN, O-1 and others, may also be impacted by the size of the equity stake you hold in a company and further how voting rights and control are distributed within the company. The issue of who has the ultimate ability to make hiring and firing decisions, for example, can have serious implications.
Not Considering Short-Term And Long-Term Impacts Of Your Immigration Status
As founders have a lot on their plates, they often just want to pursue the quickest and easiest immigration solution allowing them to work in the U.S. right now. This is rarely the best approach. Your immigration team should be laying out short-term visa options and how each of these impacts your long-term ability to remain in the U.S. Most visa options have fixed time durations, and some even limit your long-term green card options.
You certainly don’t want to find yourself looking back years from now realizing that due to a lack of initial understanding and planning you are now left without any more time in your short-term visa category and without any path to a long-term green card solution. Require your immigration provider to lay out a long-term plan for you that will grant you flexibility in case you decide that you want to remain in the U.S. longer-term.
Not Selecting The Right Legal Team
As a foreign entrepreneur, there is no way around having to handle your U.S. immigration status. Without this, you are not going to be on the ground actively participating in your U.S. business. As discussed before, you need to have a clear roadmap for your short-term and long-term immigration options and make sure you are not closing off any paths unnecessarily. With this road map you should set aside sufficient resources, both in terms of time and money, to ensure that this critical requirement is properly handled from the inception of your journey and that you put your best foot forward to the U.S. government.
This does not mean having to pay high legal fees, but instead it is an exercise in finding experienced immigration counsel that consistently works with clients in your same situation so that they can promptly assess your needs and develop a clear and effective long-term strategy while at the same time being able to anticipate current challenges in this difficult immigration climate.
Selecting the proper counsel stretches beyond just immigration, of course, and into areas of business formation, intellectual property, employment law, taxes and more. Many of these foundational legal needs overlap and impact each other. Accordingly, make sure your team of legal providers is openly communicating with each other and willing to hash out a comprehensive strategy for you. Remember that as a non-U.S. citizen, you have certain needs and considerations that many providers are not used to dealing with.
Although your time is limited, there are certain foundational immigration requirements that you simply have to handle properly as you set up and grow operations in the U.S. Taking time now to understand and avoid these pitfalls can help save you from having to spend even more resources later fixing oversights. You owe this to yourself and your company.
The information provided here is not legal advice and does not purport to be a substitute for advice of counsel on any specific matter. For legal advice, you should consult with an attorney concerning your specific situation. www.immipartner.com
This article was originally published in Forbes on May 16, 2019