CHAPTER 7: IMMIGRATION LAW FOR EMPLOYEES & INVESTORS

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1 CHAPTER 7: IMMIGRATION LAW FOR EMPLOYEES & INVESTORS 7.1: EMPLOYMENT-BASED IMMIGRATION The typical process under employment-based immigration is to either enter the United States to create a business, or enter with an offer from a sponsoring employer. There are two main types of visas in the United States. Immigrant visas (green cards) and nonimmigrant visas (work visas). A non-immigrant visa allows an individual to work and live in the United States for a temporary period. Non-immigrant visas are easier to obtain and have short delays. Immigrant visas permit an individual to live and work in the Unites States permanently. They also provide a path to become a citizen. Immigrant visas are more difficult to obtain and typically have long delays. Below is a description of several different types of non-immigrant visas and Immigrant visas. Non-Immigrant Visas E-1 Treaty Trader: The E-1 non-immigrant visa permits nationals, their spouses and unmarried children of certain treaty countries to live and work in the United States, if they carry on a commercial trade with the nation country. Items of commercial trade include: goods, services, international banking, insurance, transportation, tourism, technology and its transfer, and some newsgathering activities. As a condition of the E-1 visa, the Treaty Trader may not change his business or work for someone else. The trade between the U.S. and the national s country must be significant and continuous, and must consist of over 50 percent trade between the U.S. and the national s country. The E-1 visa permits employees of the E-1 Trader to work and live in the Unites States as well. To qualify as an Employee of an E-1 Treaty Trader, the employee must be of the same nationality as the Treaty Trader, meet the definition of employee under federal law, and be employed in a supervisory or executive capacity, or otherwise have special qualifications. E-1 visas for Treaty Traders and their employees are valid for an initial period of two years with unlimited two-year extensions. However, all E-1 visa holders must maintain the intent to leave the United States, which means E-1 visa holders may not obtain a green card, unless they qualify for and change to another visa. There are many treaty countries, including Japan, South Korea, Israel, Canada, Mexico, Australia, most European countries, and the Republic of China (Taiwan), and India. There are several other countries which can be found at fees_3726.html#fna E-2 Treaty Investors: The E-2 non-immigrant visa is very similar to the E-1 visa and permits nationals, their spouses and unmarried children of certain treaty countries to live and work in the United States, when the national invests substantial sums of money into a United States enterprise with the sole intent of developing that enterprise. To qualify, the national must show his substantial investment by owning 50 percent of the enterprise or have possession of operational control through a managerial position or other executive position. The investment must be for the purpose of making a profit, and must be subject to total loss. Moreover, the enterprise must not be a marginal enterprise. A marginal enterprise is defined as one that is not capable of generating enough income to support the national s family. All of the other requirements and benefits are nearly identical to the E-1 Treaty Trader visa. H-1B & L-1A Visas: Under the H-1B visa program, a professional with specialized knowledge may work and live in the United States with sponsorship from an employer. The H-1B visa holder must remain employed by a sponsoring employer to remain in the United States. The H-1B visa holder s spouse and children under the age of 21 are permitted to live in the United States and attend school, but they may not work. Spouses and children of H-1B visa holders may petition for their own H-1B visas to allow them to work. 43

2 Every year, the United States issues 65,000 new H-1B visas to skilled professionals with the equivalent of a Bachelor s degree, and an additional 20,000 H-1B visas to those who hold a Master s degree. H-1B visas are valid for three-year periods and may be renewed once. The H-1B application takes around 90 days to obtain. To obtain permanent residency (green card), the H-1B visa holder must file additional petitions with the U.S. government, and the employer must sponsor the visa holder. Currently, there is a back log for green cards issued to people with H-1B visas for citizens of China and India. The processing time ranges from two years to ten years. If the visa holder has applied for a green card within the first six years of having an H-1B visa, he can obtain additional extensions of his H-1B visa. The L-1A and L-1B visas are very similar to an H-1B visa. To qualify for an L-1A or L-1B visa, the applicant must be working for a U.S.-based company that has operations in the applicant s native country. This visa is known as an intra-company transfer visa. The applicant must have worked for the sponsoring company for at least one year. Under the L-1A visa, the applicant must be coming to the U.S. to perform an executive or managerial role. Under the L-1B visa, the application must be have specialized knowledge. The L-1A visa is valid for three years, with the option to renew for an additional four years. The L-1B visa is valid for three years, with the option to renew for an additional two years. The L-1A visa holder must remain working for the sponsoring employer to remain in the United States. The L-1A visa provides for an expedited green card application for those qualifying as a Multi-National Manager (which is discussed below). Immigrant Visas (Green Cards) EB-5 Visas: Under the EB-5 immigrant visa program, an investor, his or her spouse, and all unmarried children under the age of 21 can secure permanent residency (green card) within the United States in less than 18 months and petition for U.S. Citizenship 5 years later. EB-5 visas are available to citizens of all countries. This is an immigrant visa that does not require a sponsoring employer in the traditional sense. To qualify for a visa under the EB-5 category, an EB-5 investor must invest at least $500,000 (generally $1,000,000) in a for-profit U.S. business and create not less than 10 full-time permanent jobs for American workers. While the number of jobs a project can create limits the amount of EB-5 capital that can be raised, both indirect and induced jobs can be counted. Indirect jobs are stimulated through construction expenditures for a new or remolded facility and the subsequent spending of the operational business (supply chain spending). Induced jobs are a function of the payroll. The more a business pays their employees, the more those employees spend in the surrounding community - thus stimulating job creation. To obtain immigrant investor status an alien investor must first apply to the United States Citizenship and Immigration Service ( USCIS ) with all supporting documentation clearly demonstrating that the investment meets all EB-5 requirements. To become a lawful resident, the investor must provide proof of the jobs created and the investment sustained in the U.S. business within 90 days of the second anniversary of first arrival in the U.S. EB-5 capital terms tend to be quite favorable. With a low simple interest payment, a five- to seven-year balloon payment, flexible terms, and an ability to structure the investment as debt or equity. EB-5 can be an attractive financing option for new job creating projects and could greatly simplify the visa process for their employees. EB-1 Visas: The EB-1 immigrant visa is available to applicants that have extraordinary ability, are outstanding professors or researchers, or are multinational managers or executives. Each of the three categories has their own requirements. 44

3 Under the Extraordinary Ability category, the applicant does not need to have a job offer or sponsoring employer. To qualify, the applicant must demonstrate extraordinary ability in the sciences, arts, education, business or athletics through sustained national acclaim. The applicant can establish this by demonstrating three of the following ten criteria or evidence of a one time achievement (including Oscars, Pulitzer prizes, Nobel Prizes, Olympic medals.) The ten criteria are lesser national awards, memberships in associations requiring outstanding achievement, major trade publications about the applicant, evidence that the applicant has been a judge of others work, acknowledged original contributions to the applicant s field, major publications of the applicant s work, exhibitions of the applicant s work, performing a lead role in distinguished organizations, command a high salary, and commercial success in the performing arts. Under the Outstanding Researcher category, the applicant must have a job offer in the United States. The applicant must demonstrate international recognition of the applicant s scholarly work, and have worked for three years in a research capacity. This is accomplished by demonstrating two of the following six criteria: receipt of major awards, membership in associations requiring outstanding achievement, other people s publications about the applicant s work, participation as a judge of others work, original research or academic contributions, and authorship of scholarly articles or books. Under the Multinational Manager category, the applicant must have a job offer, and the employer must sponsor the application. To qualify, the applicant must have worked outside of the U.S. for three years and with the sponsoring employer for at least one year, in an executive or managerial capacity. The applicant must be seeking to enter the U.S. to continue performing his current role. Each of the EB-1 application processes take approximately one year, and the wait time for approval is approximately one year regardless of the country of origin. EB-2 and EB-3 Visas: The EB-2 immigrant visa requires an employer to sponsor the application. To obtain the EB-2 visa, the employer must obtain a labor certification from the United States Department of Labor proving that there is not an American worker that is qualified to perform the position, or a waiver of the certification must be obtained. There are three categories: (1) advanced degree; (2) exceptional ability; and (3) national interest waiver. The advanced degree category requires proof that the position requires an advanced degree (Bachelor s degree plus five years of experience, a Master s Degree plus three years of experience, or a Doctorate Degree) and that there are no other similarly qualified American workers to fill the position. The exceptional ability category requires proof that the applicant has exceptional ability in the arts, sciences, or business. A waiver of the labor certification can be if the applicant is coming to the Unites States to perform a job that is of great national importance. The EB-2 application process takes approximately one year, and the wait time for approval is approximately five years for Mainland China, nine years for India, and one year for all other countries. The EB-3 immigrant visa requires an employer to sponsor the application. To obtain the EB-2 visa, the employer must obtain a labor certification from the United States Department of Labor proving that there is not an American worker that is qualified to perform the position. There are three categories for eligibility: (1) skilled workers; (2) professionals; and (3) unskilled workers. The skilled worker category requires that applicant be a skilled worker and have at least two years of experience in his skilled trade. The professionals category requires that the applicant applicant have a Bachelor s degree, and the job must require a bachelor s degree. The unskilled workers category requires the applicant be an unskilled laborer, and the position is not seasonal or temporary. The EB-3 application process takes approximately one year, and the wait time for approval is approximately six years for Mainland China, eleven years for India, and six years for all other countries. 7.2: FAMILY-BASED IMMIGRATION Another way to obtain permanent residence (green card) is through the family-based immigration process. An individual may apply for a green card as (1) an immediate relative of a U.S. citizen, (2) a family member of a U.S. citizen fitting into certain preference 45

4 categories, or (3) a family member of a green card holder. Immediate Relative of U.S. Citizen U.S. immigration laws permit U.S. citizens to petition for their immediate family including their spouse, unmarried children under age 21, and parents (if the citizen is over age 21). These immediate family members take priority and do not have to wait for their visa number to be drawn to receive their green card. There are also unlimited visas available under this category. Family Member of U.S. Citizen The U.S. immigration laws also permit a U.S. citizen to sponsor certain distant relatives and immediate family members that do not qualify as an Immediate Relative of U.S. Citizen. These distant relatives are placed into family preference categories, and the eligible relatives include unmarried children over the age of 21, married children of any age, and siblings (if the U.S. citizen is over age 21). There are substantial wait times for these categories ranging from seven to twenty four years depending on the category and the country of origin. Family Member of Green Card Holder The U.S. immigration laws permit a permanent resident (green card holder) to apply for a green card for their family to promote family unity. Qualifying family members include the permanent resident s spouse, and any unmarried children, regardless of age. There are also substantial delays under this category. The spouse and unmarried children under age 21 can expect a delay of two to three years. The unmarried children over age 21 can expect a delay of eight to twenty years. 7.3: DIVERSITY VISAS As a special exception to the family and employment based visa programs, the United States government makes an additional 50,000 diversity visas available. These visas are drawn from a random selection of applicants who are from countries with low rates of immigration to the United States. To be eligible, the applicant must satisfy the proper education, work or other requirements. Each entrant must have the equivalent of a high school education, or two years of work experience in an occupation requiring two years of training or experience. Those born in any territory that has sent more than 50,000 immigrants to the United States in the previous five years are not eligible to receive a diversity visa. The 50,000 visas are allocated among several geographic regions including Africa, Asia, Europe, North America, Oceana, and South America (Caribbean). The visas are distributed among the regions, with the region sending the least amount of people to the U.S. receiving the most diversity visas. No country in any region can receive more than 3,500 visas. Currently Africa and Asia receive approximately 40 percent of all diversity visas. The chances of obtaining a diversity visa are low, ranging from 0.5 percent to 5.5 percent depending on the region and the number of applicants. 7.4: B-1, B-2 AND STUDENT VISAS There are several short-term and student visas that permit people to travel to the U.S. to attend business meetings, vacation, or attend school. These are all non-immigrant visas. B-1 and B-2 Visas Under the B-1 visa, foreign nationals may come to the U.S. to participate in business activities, including business meetings, conventions, contract negotiations, training, and conducting business transactions. Certain other activities may qualify, including settling an estate. These visas may also be used to travel to the U.S. to identify investments and trades eligible for EB-5 immigrant 46

5 visas and E-1 and E-2 non-immigrant visas. To be eligible for a B-1 visa, the foreign national must demonstrate that the purpose of his trip is legitimate, he plans to leave after a specific period of time, he has money to fund his activities in the U.S., and he has a residence in his home country. The B-1 visa permits a foreign national to remain in the U.S. for a maximum of one year. The family of a B-1 visa holder must obtain separate B-2 visas to enter the U.S. The B-2 visa permits the family of B-1 visa holders to enter the U.S. and it is also used by those who wish to enter the U.S. to vacation, travel, visit family and friends, and obtain medical treatment. Student Visas There are several student visas available to those who wish to enter the U.S. to obtain an education. The most common is the F-1 visa. The F-1 visa permits foreign nationals to enter the U.S. to obtain an academic education. Under the F-1 visa, foreign national must be a full time student at an accredited college, university, high school, primary school, or language training school. The education must result in a degree, diploma, or certificate, and the school must be authorized by the U.S. government to accept foreign students. The M-1 visa is similar to the F-1 visa, but it is used by those foreign nationals entering the U.S. to obtain a vocational education. Under both the F-1 and M-1 visas, the foreign national has restricted work authorization. The J-1 visa is an exchange visa is used to educate the foreign national in the U.S. so that the foreign national may use their education in their home country. Under the J-1 visa, the government designates a sponsoring institution that usually pays for the foreign national s education. Each exchange program has its own requirements, and many programs require the foreign national to return to their home country for two years after completing their education. Each exchange program determines whether the J-1 visa holder may work in the U.S. while obtaining their education. 7.5: I-9 AND E-VERIFY I-9 Basics The 1986 Immigration Reform and Control Act ( IRCA ) requires all U.S. employers to verify the identity and work authorization or eligibility of all individuals, whether U.S. citizens or not, hired after November 6, Employers are required to do this by completing the Employment Eligibility Verification Form I-9, either on paper or online, for all employees. IRCA also prohibits employers from discriminating against any person (other than any unauthorized alien) on the basis of national origin or citizenship status in hiring, discharging, recruiting or referring for a fee, assignment, compensation, or other terms and conditions of employment. The I-9 Employment Verification process cannot be used to pre-screen employees, and the obligation to review documents is not triggered until a person has been hired. The Department of Homeland Security (formerly the Immigration and Naturalization Service) defines hired as the actual commencement of employment of an employee for wages or other remuneration. The employee must complete Section 1 or the I-9 Form by the date of hire. E-Verify (formerly known as the Basic Pilot Program ) is a voluntary computer system provided to employers by the United States Citizenship and Immigration Service ( USCIS ). This system allows employers to electronically verify the employment eligibility of newly hired employees. To process, the employer submits information provided on the Form I-9 into the E-Verify online system. 47

6 E-Verify then checks that information against the Social Security Administration and the Department of Homeland Security databases. Once the I-9 information is submitted, the employer receives one of the following results within a matter of seconds: Employment Authorized: This means that the employee is authorized to work; Department of Homeland Security ( DHS ) Verification in Process: DHS will usually respond within 24 hours with either an Employment Authorization or DHS Tentative Non-Confirmation response; Social Security Administration ( SSA ) Tentative Non-Confirmation: There is an information mismatch with the SSA; or Final Non-Confirmation: The employee is not work authorized. If the employer receives Employment Authorized, the employer records the system generated verification number on the Form I-9 or attaches a printout of the result screen. This ends the process. The employer s obligation to re-verify remains only for time limited authorizations. Employer failure to verify employment eligibility, and to properly complete and retain I-9 Forms subjects the company to stiff penalties, including imprisonment, asset forfeiture, more. Further, executives, officers, managers, supervisors, key employees, and accountants are liable personally for civil and criminal penalties for I-9 related errors and unlawful employment eligibility verification practices. 48

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