Non-Immigrant Visas for Entrepreneurs

Investor Visa - U.S. Immigration Lawyer

While reviewing the USCIS Entrepreneurs in Residence Program visa guide webpage, I became concerned that some may get the wrong idea.  The website indicates that the following visas are appropriate for Entrepreneurs:

  1. B1 Business Visa
  2. F1 OPT
  3. H1B Visa
  4. O1 Visa
  5. L1 Visa
  6. E2 Visa

For entrepreneurs, I agree that an E2 visa is generally an appropriate visa however the other visas really aren’t intended for investment and entrepreneurship.  Practically speaking, they are actually risky visas for entrepreneurship and put entrepreneurs at risk not only for their having the visa petition denied, but losing their investment and businesses after they have been started.

As an immigration lawyer and owner of a law firm, I consider myself an entrepreneur and small businessman.  So working with foreign entrepreneurs has been something very near and dear to my heart.  Below is some of my thoughts regarding these options for investors and entrepreneurs.

1. B1 Business Visa – Its very common for an entrepreneur to come to the US an B1 for business meetings, look for office space, conduct due diligence, meeting with potential employees, investors, vendors, and clients.  The B1 business visa in many cases is a bridge to conduct due diligence prior to and while filing for an appropriate visa;

2. F1 OPT – Unless there is a visa that is a realistic viable option such as an E2 visa available, starting a business on OPT is high risk.  F1 OPT is a 12 to 29 month (for STEM workers) program that allows students previously on an F1 visa to work in a field related to their course of study.   In most cases, OPT is a bridge for students to find a job, work in their field of study, and move on to another employment visa, usually an H1B Visa.  In most cases, an entrepreneur is required to be involved in the business for longer than 12 months.  In the event an E2 visa is not a viable option or an EB5 green card, then after 12 months the entrepreneur is at risk of having to immediately wind down their business. If a lot of money is invested in the business, or the business is making money, the entrepreneur will either need to sell the business or wind it down immediately.  Due to the time constrains of F1 OPT, in most cases it is not practical.

3. H1B – USCIS describes an H1B visa as “U.S. businesses use the H-1B program to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as scientists, engineers, or computer programmers.”  Practically speaking, there must be an employer-employee relationship.  USCIS has defined the employer-employee relationship as the right to control, as described in a 2010 memo.  As part of the right to control requirement, the employer must be able to fire or terminate the employee.  Most entrepreneurs are not going to start a company (at least right away) where they can be fired.  After all the venture is likely requiring a lot of their time and investment.  Additionally, Congress has limited the amount of regular cap H1B visas to 65,000 per year and no matter how bad the job market, H1B visas are just about always exhausted each year.  Why add to the demand for H1B visas for persons that an H1B really was not designed for (ie. entrepreneurs and Investors).

4.  L1 Visa – USCIS describes an L1 visa as enabling a “U.S. employer to transfer an executive or manager from one of its affiliated foreign offices to one of its offices in the United States.  This classification also enables a foreign company which does not yet have an affiliated U.S. office to send an executive or manager to the United States with the purpose of establishing one.”  Theoretically an L1 visa is a great fit for an overseas entrepreneur that would like to establish a branch or presence in the US. However, the past 3 or 4 years, L1 visas have been scrutinized where Requests for Evidence have skyrocketed and denial rates doubled from 7% to 14%.  My hunch is for small businesses the denial rate is higher than 14 percent.  The main issue of contention is whether the overseas Executive or Manager being transferred to set up the US branch is really doing high level Executive or Manager duties.  Many new businesses require the Owner/Executive to do everything from making high level strategic decisions, hiring and firing, dealing with vendors and clients, to low level administrative duties as fixing the office computers, photocopying letters, ordering office furniture as not being Executive or Managerial.  To me this is tragic as an L1 visa is a great way for an entrepreneur that wants to kickstart their operations in the US to come to the US.  Its not to say that if you have  a potential L1 case that it will be denied, but there is a strong likelihood that your case will be scrutinized.  As an Immigration Lawyer, I generally advise clients to overkill proving a case.  Feel free to read this earlier article about L1 visas and E2 visas.

5. E2 Visas – The most practical visa option for entrepreneurs and investors but current laws should be clarified and expanded.  USCIS describes an E2 visa as “allowing a national of a treaty country (a country with which the United States maintains a treaty of commerce and navigation) to be admitted to the United States when investing a substantial amount of capital in a U.S. business.  Certain employees of such a person or of a qualifying organization may also be eligible for this classification.”  My main contention with an E2 visa is the treaty requirement.  Many country’s do not have a treaty with the United States and consequently their nationals are not eligible for an E2 visa.  For example, China and India do not have a requisite treaty with the United States and consequently its nationals are not eligible for an E2 visa.  Immediately an E2 visa is relevant to a huge population of potential investors and entrepreneurs as China and India account for a substantial amount of immigration to the US and likely a large proportion of persons wanting to open a business in the US.  My other main contention is that E2 visas are a bit too vague in their requirements.  I would prefer a clear dollar amount required to be invested and would like to see a pathway to permanent residency through an E2 visa.  Unfortunately, the rule is a “substantial investment” and E2 visas are renewal indefinitely but do not lead to permanent residency.

I commend USCIS for trying to promote entrepreneurship in the US through their Initiative Program and explore options given the limitation in the rules they have been given to work with.    Practically speaking, L1 and E2 visas are really the only options that were designed for entrepreneurs and investors.  I would be very hesitant to encourage a client to file an H1B or O1 as an entrepreneur given the risks.  An H1B is valid for up to 6 years and some circumstances their are extensions available.  However, what happens after 6 years.  Or what if the case is approved for 3 years and then the  Examiner in the renewal case has a different interpretation than the first USCIS Examiner and the case is unexpectedly denied.  What does the business do and what does the Entrepreneur and his or family do?  If the H1B won’t be renewed, they may not have an option and may need to leave the US very suddenly.  These are all hypotheticals, but the point is, E2 visas should be broadened to include any overseas investor and their should be a pathway to permanent residency through E2 visas.

If you are an investor or entrepreneur and would like to explore your immigration options feel free to contact us.  Our immigration lawyers in Chicago have over 25 years of combined experience and excellent proven results in helping individuals or businesses to obtain their green cards and visas in the United States.