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Immigration as an Incentive for International Trade & Economic Development

Immigration & International Trade in the U.S. .jpg

Immigration is often underutilized as an incentive to encourage international trade and development, especially with potential partners in emerging markets. There are incentives for U.S. businesses to build relationships with foreign companies that comply with immigration requirements. The L-1 Intra-Company visa, the E-2 Treaty Investor visa, and the E-1 Treaty Trader visa are programs that assist foreign business professionals with immigrating to the U.S. while simultaneously developing international trade.

 

THE BIG PICTURE

“America cannot always compete in pricing or costs, but we are still #1 in culture and living experience. Combining immigration incentives with business development is EASIER than you think and VERY persuasive.” – Sherrod Seward, Esq., Partner at Queen City Immigration Law

IDEAL MODEL

The L-1 Intra-Company Visa and the E-2 Treaty Investment Visa both require a foreign business or business owner to open of location in the United States that is at least 51% owned by the foreign person/entity. This creates an opportunity for a U.S. company to either help a foreign company set up their own domestic entity in the United States or set up a joint venture with the foreign company. The U.S. Company can then enjoy the ease of doing business directly with the newly formed domestic entity instead of actually export themselves.

What are the incentives for the Foreign Business Owner?

1.       Less red-tape for traveling to the United States – Visitor visas have a lot of limitations and are becoming more difficult to obtain, especially in emerging markets.

2.       Work Authorization – Visitor visas do not permit a foreign national to legally work in the United States. The L visa comes with a work authorization while the family members of an E visa holder can obtain work authorization.

3.       Period of Stay – Visitor visas usually only authorize six (6) months of visitation at a time and the foreign national can risk losing the visa if they stay in the States too long. Both the L and E visa permit lengthy period of stay for foreign nationals.

4.       Legal Permanent Residence – There are direct and indirect avenues for foreign nationals to obtain Legal Permanent Residence (“Green Card”) through the L and E visa programs.

5.       Education – Many foreign nationals invest copious amounts of money to facilitate their children being able to receive an education in the United States.

6.       Access to Finance – In many cases, it is easier for a foreign business to receive affordable financing through an entity domesticated in the United States rather than their location in the home country.

7.       Transfer Workers – Both the L and E-1 visa have features that allow for the transfer of employees which facilitates business growth and training.

What are the incentives for the U.S. Firm?

1.       Transactional benefits - It is easier to find financing for a domestic company rather than a foreign company.

2.       Teaming up -  A domestic co-venture with a foreign business facilitates training and speeds up growth.

3.       Compliance – The U.S. firm can avoid adding more international compliance responsibilities through teaming up with a foreign firm domestically.

4.       Trade Finance: Having a domestic subsidiary makes it possible for foreign company to self-finance transactions from their domestic entity to the foreign entity.

5.       Strategy: Having a more hands on relationship with foreign partner facilities more mutual coordination for strategy and business culture.

6.       Procurement: The U.S. firm can ease demands on supply chain by selling products to domestic subsidiary instead of shipping overseas.

VISA MODELS

L-1 Intra-Company Transfer Visa

The L-1 category enables a U.S. employer to transfer an executive, manager or a professional employee with specialized knowledge relating to the organization’s interests 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.

Who Qualifies for L-1 Visa

L-1A Managers/Execs

 ▸ Executive or Manager in the Company for a least 1 year

 ▸ Has educational background to support their position.

▸ Will be maintaining executive/managerial position in the U.S. company

L-1B Special Skills

▸ Must have special and/or advanced knowledge in business function

▸ The business function must be integral to business model

▸ Proof of previous success using special/advanced skills

 

E-2 Treaty Investor Visa

This nonimmigrant classification is for nationals of select countries 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 an American business to manage and direct such business. Certain employees of E-2 Treaty Investors, as long as they have the same nationality as their employer, may also be eligible for this classification.

E2 VISA BENEFITS

SELF SPONSORSHIP

▸ Allows investor to obtain non-immigrant status

▸ Renewable indefinitely for life of business

▸ Spouses and children under 21 years old are eligible for same non-immigrant status

 

BUSINESS OWNERSHIP

▸ Own a business or franchise the United States

▸ The immediate family members can seek immigrant status though other visas

▸ Business can be sold in the future.

 

E2 VISA REQUIREMENTS

▸ Investor must be from a treaty country

▸ Investor must have control of investment funds

▸ Investor must control and direct the business and cannot be a passive investor

▸ Investment must be substantial and subject to business risk

▸ Ownership must be at least 51% owner of the company

▸ Business must support other employees besides investor

E-1 Treaty Investor Visa

This nonimmigrant classification is for nationals of select countries with which the United States maintains a treaty of commerce and navigation to be admitted to the United States when involving themselves in substantial trade with the United States. These visas allow for unlimited travel in and out of the United States. The visas also allow the beneficiary to stay in the United States for extended periods with work authorization.

E-1 Benefits

SELF SPONSORSHIP

▸ Allows investor to obtain non-immigrant status

▸ Renewable indefinitely for life of business

▸ May freely travel in and out of U.S.

▸ Spouses and children under 21 years old are eligible for same non-immigrant status

TRAVELING BENEFITS

▸ Avoids complications with B1/B2 Visas

▸ Stay within the United States for prolonged periods at a time

▸ Freely travel in and out of United States for life of visa

TREATY TRADER REQUIREMENTS

▸ Trader must be from a treaty country

▸ Must be executive, manager, or specialist in foreign business

▸ Ideally travels for business development purposes

TRADER COMPANY

▸ At least 50% owned by treaty country nationals

▸ Business substantially involved with international trade with U.S.

▸ International Trade with U.S. will be continuous

Immigration is an underappreciated incentive to global business development, with small to medium sized enterprises. In truth, foreign business partners in emerging markets often do not know of the immigration opportunities available for business people. If you are interested in further explanation or to schedule a consultation, please contact our office at 704-500-2075 or email info@qcilaw.com