Opening a Business in the United States
We often meet with potential clients who are citizens of other nations, but interested in opening a business in the United States. We usually discover early on in the consultation that the client is completely unaware of the various options available and unaware of the advantages and disadvantages of these options. This article will hopefully clear away some of the confusion to help you make a better decision about how you, as an entrepreneur or investor should proceed.
The first question you need to answer is what is your ultimate goal? Are you interested in doing business in the U.S. because you want to eventually become a citizen or is it simply to take advantage of the economic business opportunities available in this country?
There are two primary categories of visas issued by the government: a) non-immigrant visas and b) immigrant visas. If you apply for an immigrant visa it is with the intent of immigrating the U.S. to live permanently. If you apply for a non-immigrant visa you must do so with non-immigrant intent unless the particular non-immigrant visa permits dual intent. If you apply for a non-immigrant visa that does not permit dual intent, you may not be able to adjust your status at a later date.
This article does not intended to deal with the myriad of employment based visas, although some of the visas referenced below may be considered employment based in that an employer must sponsor you for the visa.
Types of non-immigrant business related visas
Business owners around the world might be able to ask the government to allow them to come to the United States for brief periods to conduct business affairs. The simplest way to do that is to apply for a B1 visa which, for example, would allow you to attend a business conference. It is normally not applicable to those interested in opening a business in the U.S. for several reasons. First, it only allows visits to the U.S. for less than 6 months per visit, although you might be able to extend your visit in extenuating circumstances. If you come regularly, the Customs and Border Protection officer at the airport, may detain you or prevent your visit altogether if they believe that, as a result of your numerous visits, you intend to stay in the United States permanently, which is commonly referred to as "immigrant intent". But, the most significant reason why this may be inapplicable is because the holder of the B1 visa is unable to earn money in the U.S. individually unless it is merely to cover incidental expenses or receive an honorarium. The B1 may be a relatively easy visa to secure, but if you are serious about opening a business in the U.S., you should only get the B1 with the intent of traveling to the U.S. to explore business opportunities.
The U.S. allows residents of some countries to participate in a visa waiver program. If your country is part of the visa waiver program, you can come to the U.S. for up to 180 days without the need to apply for the visa. Again, this is not appropriate for someone interested in opening a business in the U.S. unless your visit is merely to explore business opportunities.
Another type of visa which would allow you to open a business in the United States is the E2 visa. Many countries have entered into treaties with the U.S. intended to permit investors or traders to freely travel to their respective countries with the understanding that they will not immigrate. These are the E-1 (treaty traders, spouses, and children) or E-2 (treaty investor, spouses, and children). These treaties are designed to promote trade and investment between the U.S. and the other treaty country, thereby encouraging good relations. The main advantage of the E-2 visa is that there is no set minimum investment required so long as the visa holder owns a legitimate business operation and either has or will employee U.S. citizens. The investment must be in an operating business; merely buying property or stocks and bonds does not qualify.
It is extremely difficult to obtain permanent residency if you hold an E-1 and E-2 visa. In fact, the visa holder must be willing the leave the U.S. once their E-1 or E-2 status is terminated. There cannot be dual intent, i.e. you cannot apply for an E-1 or E-2 visa with the thought that you might want to eventually immigrate.
One non-immigrant visa that permits dual intent is the L-1 intra-company transfer visa. This is a useful alternative to the E-2 visa when the investor has a business in another country, which will continue operating when the manager comes to the United States. The foreign company makes the decision to expand operations into the United States, and decides to send a manager from the parent company to run operations in the US. One requirement is for the person to have worked for that business for at least 1 year out of the three years preceding the application. The L-1 visa permits a foreign company to transfer a manager or executive to work for the branch of the business in the U.S. The L-1 visa is limited to seven years in duration and the initial grant depends on whether the company acquires a preexisting company or decides to open a new venture. The L-1 visa holder can eventually apply for a green card as a "multinational executive" once the business proves to be a success.
Types of Immigrant Business Related Visas
There are 4 primary classes of employment related immigrant visas which are too involved to cover in this article They generally require an employer to sponsor the beneficiary or have an offer of employment ready for classes which allow self-sponsorships such as the multinational executive referenced above.
If you are an entrepreneur or investor interested in immigrating, the one visa well worth considering is the EB-5. You might be able to petition for an EB-5 visa by either investing in your own business or through a pre-approved Regional Center. The amount of the initial investment depends on several factors and you should consult an experienced immigration attorney to help you from the beginning. The EB-5 does not require an employer to sponsor you and, if granted, you will receive conditional permanent residence for two years. You will have to remove the conditions on your permanent residence before the initial two years expire.
At the present time there is no wait time for an EB-5 visa. The EB-5 program was created by the U.S. Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors.
An EB-5 investor must invest in a commercial enterprise which is defined as a for-profit activity for the ongoing conduct of lawful business including, but not limited to:
- A sole proprietorship
- Partnership (limited or general)
- Holding company
- Joint venture
- Business trust or other entity, which may be publicly or privately owned.
The investment must be a commercial enterprise and must create jobs. Specifically, the investment must create 10 full-time jobs for qualified U.S. workers within two years of the immigrant investor's admission to the U.S. with a green card.
Note that the required minimum investment for an EB-5 visa is $1 million. However, if the investment is in a "targeted employment area", which is an area that has high unemployment or a rural area, the minimum qualifying investment is $500,000.
The investment may be cash, equipment, inventory, other tangible property, cash equivalents and indebtedness secured by assets owned by the foreign investor. If you wish to invest in the U.S., but merely want to be a limited partner and not active in the business operation, you can consider investing in a Region Center. For more information on the EB-5 visa Regional Centers go to http://www.tuckerludin.com/practice-areas/immigration/eb-5-visas-and-the-regional-center/
This article does not cover all the options for a business investor in the U.S. It does generally cover the most common. If you are interested in investing in the U.S. and want to know more about your immigration issues, call the immigration lawyers at Tucker & Ludin at 727-572-5000. If you are not in the U.S., we would be pleased to consult with you by Skype. You can also contact us through by sending an e-mail through this website.