Applying for Work-Based Nonimmigrant Visa as an Investor or Entrepreneur

investors and entrepreneurs

 

Introduction to H1B, L1, and O1 Nonimmigrant Visas for Investors and Entrepreneurs

The primary nonimmigrant classification for investors and entrepreneurs is the E-2 (E2) Treaty Investors classification [see article]. However, provided that the requirements are met, an alien seeking to enter the United States as an investor or entrepreneur may instead apply for an H-1B (H1B) [see article], L-1 [see article] (L1A [see article] or L1B [see article]), or O-1A (O1A) visa [see article]. This is especially important for investors and entrepreneurs who are not nationals of a treaty country [see article] in order to qualify for an E2 visa. However, because the H1B, L1, and O1 classifications all require an “employer-employee relationship” both in order to obtain a visa and to maintain status, investors and entrepreneurs may have difficulty meeting the requirements for those classifications where they have a significant ownership stake in the petitioning entity. This article will address special considerations for investors and entrepreneurs seeking to obtain one of those three nonimmigrant employment visas.

Applying for H1B Visa for Investors and Entrepreneurs

The primary guidance for what constitutes a valid employer-employee relationship in the H1B context is a 2010 United States Citizenship and Immigration Services (USCIS) Memorandum by Donald Neufeld [henceforth “Neufeld Memo”] [PDF version].1 To learn about the Memorandum's guidance on valid employer-employee relationships in the H1B context in great detail, please read our article on the subject [see article]. As we will explain, portions of the Neufeld Memo make it especially complicated for investors or entrepreneurs who have a significant ownership stake in the petitioner to demonstrate eligibility for H1B status.

Citing regulations found in 8 C.F.R. 214.2(h)(4)(ii), the Neufeld Memo requires that for H1B purposes, an employer have the ability to “hire, pay, fire, supervise, or otherwise control the work” of an H1B beneficiary.

The Neufeld Memo uses an example to demonstrate how self-employment does not constitute a valid employer-employee relationship for H1B purposes. The example is of a fashion company that is owned by the H1B beneficiary, and where the beneficiary is “the sole operator, manager, and employee” of the petitioning company. Because the beneficiary cannot be fired from the company, and because the petitioner may not exercise control over the beneficiary's work, the requisite H1B employer-employee relationship does not exist.

In order for an investor or entrepreneur who would otherwise be self-employed to qualify for H1B status, he or she may establish a separate legal entity to act as the petitioner. With regard to the fashion company self-employment scenario in the Neufeld Memo, USCIS clarified that the employer-employee relationship may have been established if the petitioner had a board of directors that was wholly separate from the beneficiary and would exercise the requisite control over the beneficiary's employment.2 USCIS has further clarified that evidence that the company has preferred shareholders, investors, or other factors that demonstrate that the petitioner controls the beneficiary's work, may help establish a valid employer-employee relationship. An investor or entrepreneur seeking to use an H1B visa to work at a business where he or she has a significant ownership stake or to start a business in the United States will be required to submit evidence in the initial H1B petition to demonstrate the requisite separation from and control exercised by the petitioner in order to qualify for an H1B visa. Please follow this link to read the section of our Neufeld Memo article where we discuss the Neufeld Memo's guidance for evidence for initial petitions.

The petitioner/beneficiary should be prepared to submit evidence to satisfy the ability to pay requirement for a labor condition application to be approved. The Department of Labor will generally apply higher scrutiny to small employers acting as petitioners, so this is of special concern for investors and entrepreneurs who set up a small petitioning entity. Secondly, H1B visas are only available for “specialty occupations.” For an investor who will be an owner of or manager within the petitioning entity, he or she should be sure to include a specific description of the job along with ensuring that the petition demonstrates that the job requires the attainment of a bachelor's degree or higher. If the entrepreneur or investor is going to be handling managerial tasks, he or she should explain what the job will entail in detail and ensure that the job description supports that the job will be in a specialty occupation.

Applying for L1 Visa for Investors and Entrepreneurs

An investor or entrepreneur with a significant ownership stake in a foreign company would likely be seeking an L1A visa for managers and executives to be transferred to an entity with a qualifying relationship to the foreign company in the United States. The L1A visa category is generally more amenable to situations where the beneficiary has at least a significant ownership stake in the petitioning entity than is the H1B visa category. In situations where an investor or entrepreneur has a significant ownership stake in the overseas and/or petitioning entity, he or she must take care to demonstrate that a qualifying relationship exists between the two entities [see section].

The L1 beneficiary must have been “employed” with the foreign company for at least 1 year. Where the beneficiary was the owner of the foreign entity, he or she may submit evidence of control by the foreign parent's board of directors to satisfy the requirement.

Where an L1A beneficiary is being petitioned for in order to open up a “new office” in the United States, the petition must demonstrate that sufficient physical premises exist for the new office and that the new office will be able to support a managerial or executive position within 1 year. An investor or entrepreneur seeking to work for a new office in the United States has the option of seeking an L1B visa instead of an L1A visa. In this scenario, the beneficiary will be required to satisfy the “specialized knowledge” requirement for L1B status, but not need to demonstrate that the new office will be able to support the beneficiary's managerial or executive position within 1 year. The L1B beneficiary may eventually switch to L1A status once the new office can support a manager or executive. However, because “new office” petitions are only approved for 1 year, the L1 beneficiary should plan in advance how he or she will provide documentation to support an extension petition.

Applying for O1A Visa for Investors and Entrepreneurs

The O1A visa is a nonimmigrant employment visa for “aliens of extraordinary ability.” Pursuant to regulations in 8 C.F.R. 214.2(o)(ii)(1), an alien may qualify for an O1A visa based upon “extraordinary ability” in the sciences, arts, education, business, or athletics. However, similarly to the H1B and L1 categories, a beneficiary may not self-petition for an O1A visa. An O1A petitioner must be a U.S. employer, a foreign employer using a U.S. agent, or a U.S. agent in a traditional self-employment situation. Provided that the “extraordinary ability” requirement can be met, the O1A visa is an option for both investors or entrepreneurs in one of the fields covered by the O1A visa. In order to petition for an O1A visa, the petitioner must be legally distinct from the beneficiary and there must be an employer-employee relationship.3 Where an agent is acting as petitioner in what would be a traditional self-employment situation, the agent-petioner who is acting provide a contract that specifies the terms of the beneficiary's employment for the agent and the specific wage offered to the beneficiary.4 Where an alien is considering an O1A visa to work in the United States at either a business he or she has a significant ownership stake in or to start a business in the field that he or she may demonstrate “extraordinary ability” in, the petitioner should consult with an experienced immigration attorney to determine whether the O1A visa is an available path for doing so and for guidance on meeting its requirements.

However, it is important to note that demonstrating “extraordinary ability” in one of the specified categories requires both extensive credentials and documentation. Please read our article on O1 visas [see article] to learn more about the O1A application process.

General Advice for Investors and Entrepreneurs Seeking H1B, L1, or O1 Visas

H1B, L1, and O1A visas may be the best options for working in the United States for investors and entrepreneurs who are not from treaty countries. However, where the investor or entrepreneur has a significant ownership stake in the petitioner, demonstrating eligibility will be very complicated, especially for H1B and O1 visas. Any investor or entrepreneur who intends to work or start a business in the United States should consult with an experienced immigration attorney in order to determine the best path to do so. An experienced immigration attorney will be especially important for an investor or entrepreneur who may have difficulty establishing a valid employer-employee relationship for eligibility for an H1B, L1, or O1A visa.

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  1. Neufeld, Assoc. Director, Service Center Operations, USCIS, “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions,” HQ 70/6.2.8, AD 10-24 (Jan. 8, 2010)
  2. “Questions & Answers: USCIS Issues Guidance Memorandum on Establishing the “Employee-Employer Relationship” in H-1B Petitions,” USCIS, Q12
  3. 8 C.F.R. § 214.2(o)(2)(ii)
  4. 8 C.F.R. § 214.2(o)(2)(iv)(E); 8 C.F.R. § 214.2(o)(2)(iv)(E)(1)

Resources and Materials

Coffman, Bill. “Special Issues in Using Nonimmigrant Classifications Other than E-2 for Investors and Entrepreneurs.” Immigration Options for Investors and Entrepreneurs. 2nd ed. Washington, D.C.: AILA, 2010. 5-11. Print. AILA's Occupational Guidebooks.

“Entrepreneur Visa Guide,” USCIS, retrieved on October 5, 2015, available at http://www.uscis.gov/eir/visa-guide/entrepreneur-visa-guide [link]

“Questions & Answers: USCIS Issues Guidance Memorandum on Establishing the “Employee-Employer Relationship” in H-1B Petitions,” USCIS, March 12, 2012,retrieved on October 5, 2015, available at http://www.uscis.gov/news/public-releases-topic/business-immigration/questions-answers-uscis-issues-guidance-memorandum-establishing-employee-employer-relationship-h-1b-petitions [link]

USCIS Memorandum, Donald Neufeld, “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions,” HQ 70/6.2.8, AD 10-24 (Jan. 8, 2010)

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L1 visa
L1A visa
L1B visa