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From The Beginning: Agile Immigration Advocacy For New Businesses: Part 1 of 3by Susan K. Wehrer and Angelo A. Paparelli
I. Introduction Despite the trauma and shock of September 11, the United States is still viewed by many as a land of great opportunity.[i] Although the recent economic slowdown took a bit of bloom off the rose, the United States continues to offer one of the highest standards of living in the world, and its residents can be counted on to consume goods and services of all types with a seemingly insatiable appetite. As a result, people from all over the world still wish to settle permanently and raise their families in this country. These factors and others make the United States an attractive locale for foreign nationals seeking to begin a new business venture, whether alone or in combination with American partners. Immigration lawyers play a critical role in this process by working with entrepreneurs and new companies to ensure that the immigration system facilitates rather than impedes achievement of their business goals. This article will discuss a potpourri of immigration issues that may be relevant to a company in the initial stages of creation and will offer general guidance on possible immigration strategies for company principals and key employees. The reader is cautioned, however, that this article does not cover the universe of potential immigration issues that may impact a new business and should not be viewed as, or relied upon, as legal advice of the authors.
II. The First Day – The Immigration Attorney’s Role Immigration lawyers should take a proactive role in advising new business entities. By discussing the potential immigration consequences of various company structures at the outset, immigration lawyers can manage client expectations and ensure that the corporate client is in the best position to achieve its desired immigration-related goals.[ii] It is important to remind clients that a long-term immigration strategy involves more than just getting a toe in the door in the United States. The company should be focused on ensuring that key personnel are in a position to remain in the United States as long as necessary to achieve the goals of the company, which may involve analyzing legitimate nonimmigrant and immigrant visa options at the outset. Additionally, immigration counsel must develop and maintain an awareness of the latest trends in adjudication standards and evidentiary requirements within the Immigration and Naturalization Service (INS) that affect new businesses. This up-to-the-minute insight is necessary in order to better determine the required supporting documentation to submit as well as to assess the overall likelihood of success in a particular case. In the recent past, some INS adjudicators at a number of the Regional Service Centers (RSCs) have exhibited an almost virulent animus toward new businesses that petition for employment-based immigration benefits. This development is perhaps not surprising in the wake of September 11, given that a primary focus of the Service (aside from concerns for its continued survival) appears to be on identifying fraudulent cases.[iii] At least one RSC appears to be issuing greater numbers of Requests for Additional Evidence (RFEs) in H-1B (specialty occupation), L-1 (intracompany transferee) and EB1-3 (multinational manager/executive) cases, especially cases involving new businesses.[iv] In some cases, the information requested may be quite extensive, including "certified and signed" corporate income and payroll tax returns, and detailed organizational charts that include information on subordinate employees (names, job duties, educational level, annual salaries and manner of paying wages) for both the U.S. and foreign entities. For example, the INS in some cases has requested proof of wire transfers establishing acquisition and ownership of the U.S. entity and detailed information regarding the physical premises, including photographs, floor plans, and copies of escrow documents, or other evidence of title, demonstrating ownership of a building where the premises were leased. While this trend of burdensome demands for documents has apparently not yet become widespread at U.S. consular posts abroad, immigration counsel should also note that the policies and procedures of various consular posts regarding the processing of visa applications can differ significantly. Therefore, it is essential to review current information regarding the particular post, including the embassy’s or consulate’s web site, and solicit further information from colleagues and published sources before advising a corporate client on employment-based visa applications.[v] This need to confirm local practices is particularly important in the E-1 (treaty trader) and E-2 (treaty investor) visa categories where consular officers exercise independent authority to approve or deny such visas even if the INS had already approved a change of status to the E-1 or E-2 classification. Thus, an understanding of current trends at consular posts will help determine whether a particular application for an employment-based visa benefit is likely to be successful. III. The Second Day – Documentation The cornerstone of the immigration case involving an early-stage company will be documentation of the company’s existence and viability. Often, at the preliminary stages of a company’s existence, extensive documentation of business activities may not yet be available. Thus, immigration counsel may need to rely on evidence such as a business plan, lease agreements, articles of incorporation, stock certificates and other proof of initial business activity, such as copies of contracts, invoices, letters of credit, etc. At the threshold of company activities, a clear and fully developed business plan may turn out to be key to the approvability of a particular case. Therefore, immigration counsel may want to outline the basic elements that the INS may expect to see in this document. In Matter of Ho, an EB-5 (employment-creation immigrant investor) case, a laundry list of factors to consider and address in a business plan is outlined. A comprehensive business plan . . . should contain, at a minimum, a description of the business, its products and/or services, and its objectives. The plan should contain a market analysis, including the names of competing businesses and their relative strengths and weaknesses, a comparison of the competition’s products and pricing structures, and description of the target market/ prospective customers of the new commercial enterprise. The plan should list the required permits and licenses obtained. If applicable, it should describe the manufacturing or production process, the materials required, and the supply sources. The plan should detail any contracts executed for the supply of materials and/ or the distribution of products. It should discuss the marketing strategy of the business, including pricing, advertising, and servicing. The plan should set forth the business’s organizational structure and its personnel’s experience. It should explain the business’s staffing requirements and contain a timetable for hiring as well as job descriptions for all positions. It should contain sales, cost, and income projections and detail the bases therefore. Most importantly, the business plan must be credible.[vi] Although the foregoing description is derived from an EB-5 immigrant investor case, its description of a comprehensive business plan is likely to satisfy other nonimmigrant and immigrant visa categories as well. Immigration counsel should also caution clients not to be short-sighted in their efforts to collect and maintain required documentation. For example, companies whose structure requires that periodic board meetings be held should conduct these meetings and maintain appropriate minutes. Although a company principal or employee may have already obtained a nonimmigrant visa, there may be a point in the future where the company would like to request extension of his or her stay or would like to consider immigrant visa or permanent resident options. At the time of extension of status, it may be difficult, impossible or illegal to develop documents that should have been maintained all along. IV. The Third Day – Short-Term Immigration Strategies The founder of a new venture may be abroad seeking a legitimate manner to enter the United States to explore a new business opportunity. Alternatively, he or she may already be in the United States employed with another company, in possession of an employment-based visa, and planning to terminate the employment relationship with his or her current petitioner. In either case, the foreign national may be eligible for B-1/ WB business visitor status.[vii] A business visitor may engage in business activities, which can legitimately include exploring a new business opportunity, so long as no actual labor is performed. Permissible business activities include negotiating contracts and other "activities of a commercial or professional nature."[viii] The individual must be mindful of the fact that B-1 visitors must demonstrate that they are visiting temporarily and can show a foreign residence which they "ha[ve] no intention of abandoning."[ix] Evidence of a permanent foreign residence may include family members abroad, a home abroad, or other business or personal ties abroad such as bank accounts and insurance policies. Unfortunately, it is difficult to draw the line between appropriate business visitor activities and unlawful employment. Foreign nationals who are rounding up financing to start a new business enterprise often want to be able to hold themselves out as representatives of the new company. This should be discouraged as should activities such as obtaining business cards or establishing specific office space for the B-1 visitor at the company’s U.S. offices. Additionally, the company should be discouraged from issuing any press releases announcing the founder’s position with the new U.S. company, unless the commencement of employment is described as prospective. Next week: Longer-Term Nonimmigrant visa Strategies: Part 2 of 3. [i] If the terror attacks on America had been successful in diminishing the country’s magnetic appeal, one would suspect that the first group to stay away would be foreign students, one of the subsets of aliens subjected to intense scrutiny. Yet even foreign students continue to seek opportunities in the United States. See, e.g., Foreign student body grows. State, U.S. trend is surprising in light of Sept. 11 attacks, OU official says, Detroit Free Press, Apr. 4, 2002, at http://www.freep.com/news/education/nstude4_20020404.htm
[ii] This article will at times use such terms as "corporate" and "company" in describing business entities. The terms are intended to cover a variety of forms of business organizations including sole proprietorships, joint ventures, limited liability companies, trusts, and partnerships of various types, as well as traditional stock corporations. For a discussion of various types of business structures, see W. Stock, "The Law of Business Organizations for the Immigration Lawyer: Advising Companies, Employees and Investors," 2 Immigration & Nationality Law Handbook 459 (2000-01 ed.).
[iii] The authors understand from reliable sources within the Service that the INS Commissioner, James Ziglar, has recently issued a directive announcing a "zero-tolerance" policy applicable to Service personnel. The directive – issued on the heels of the much-publicized belated approval of F-1 change of status applications for two dead terrorists – allegedly forewarns INS employees that the agency will not countenance any violations of "policy." Even a casual observer of the bureaucratic mind-set would readily assume that the Commissioner’s directive will likely result in greater level of caution and skepticism on the part of the RSCs’ Center Adjudications Officers in determining eligibility for immigration benefits. [iv] Some Service supervisory personnel have been heard to challenge the claims of attorneys that RFEs are spewing forth in greater numbers. The explanation they offer is that diligent INS personnel are rapidly working down their backlogs of unadjudicated employment-based cases, and that this flurry of backlog reduction results in essentially the same average number of RFEs that are merely concentrated in a shorter span of time. [v] See also, AILA’s U.S. Consular Posts Handbook (2002 ed.) [vi] Matter of Ho, Int. Dec. 3362 (Assoc. Comm. 1998). [vii] The B-1 and WB categories are virtually identical in terms of the underlying substantive eligibility criteria that allow entry to the U.S. as business visitors. INA §101(a)(15)(B); 8 USC §1101(a)(15)(B)(defining the B-1/B-2 classification). INA §217; 8 USC §1187 (defining the WB classification). Hence the above legal analysis is equally applicable to both.
[viii] 22 CFR §41.31. For a discussion of the B-1/ WB business visitor classification, see A. Paparelli and S. Wehrer, "The Incredible Rightness of ‘B’-ing – Prudent and Practical Uses for the B-1 and WB Business Visitor Categories" 2 Immigration & Nationality Law Handbook 105 (2000-01 ed.) [ix] INA §101(a)(15)(B); 8 USC §1101(a)(15)(B).
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