E-2 visas and legal synergy.

By Maria P. Llusa, Immigration Atorrney

A foreign individual or company that comes to the United States to look for investment opportunities can initially enter the United States under a B-1 business visa or the visa waiver program (for countries that qualify). The B-1 visa allows the individual to attend meetings and negotiate future contracts. However this temporary visa does not authorize the individual to engage in U.S. employment/work, paid or unpaid, and certainly does not authorize the children or spouse to attend school in the United States while the principal is attending local meetings in the United States.

Often when clients come to our office for a business immigration consult, they present legal, corporate, tax, and transactional documentation that does not meet the U.S. immigration regulations standards for the specific visa that they desire in order to meet their business goals.

This means that after meeting with immigration counsel, the applicant will incur additional costs in legal or consulting fees to amend corporate, tax or transactional documentation in order to comply with visa requirements.

Ideally, in order to create a successful strategy for a visa investor or employment application, the foreigner should first meet with an expert attorney on US business immigration counsel. An expert immigration lawyer will be able to analyze the long and short term business goals of the investor and his/her family in order to recommend the best work visa solution strategy.

Once the immigration path is designed, the foreign investor or company should meet with legal counsel specialized in the different areas covered by the visa requirements.

Immigration Counsel should also be willing to coordinate with other counsel or providers prior to the execution of any documentation to ensure that US immigration regulations are satisfied and that there is minimal risk of further future changes that will require additional expenses for the foreign investor.

For instance, the temporary E-2 Treaty Investor visa, requires among others, to establish a US company where 50% of the ownership is in the hands of foreign nationals of the E-2 treaty country. The place of incorporation of the foreign parent company is irrelevant , thus a company formed in the United States that is a wholly owned subsidiary of a Mexican registered parent company but whose individual owners are non Mexican will not qualify under the E-2 visa treaty. Thus it is important to lift the corporate veil to determine that the “ultimate chain of command” is held by that of a majority of Mexican nationals.

Similarly, The E-2 visa requires that the foreign investor makes a personal, substantial and “at risk” investment into the newly formed US entity. “At risk” means that the money invested must be free of any loans or encumbrances on the assets of the US Company. This also means that regardless of any taxation benefits, an internal loan from the shareholders of the foreign parent company to the US subsidiary will not qualify as a personal investment for E-2 visa purposes since the assets of the US company would be compromised and thus the investment will not be at risk.

Lastly, in order to renew an E-2 visa, the investor must show that the company has generated some US employment and have generated profits both net and gross. Thus a negative corporate tax return may be beneficial for tax purposes since the investor does not owe US taxes, however for the US immigration or Consular officers, this could mean that the company is of marginal financial viability which is only generating sufficient profits to support the investor and his family. In this case, the E-2 visa extension most likely will be denied.

There are other visas such as the L-1A (new offices) or even H-1Bs that can have similar issues and require close monitoring and recording of varying legal and transactional benchmarks which can often require lawyers who have both Business Immigration acumen as well as Corporate law and accounting/financing acumen, in order to obtain the successful initial visa adjudication and further extensions.

Law firms with both the relationships and/or in house talent to assure that their clients get such crucial counsel at the right time are truly difference makers for the clients when it comes to getting business and investor visas approved.

Important: The information provided herein is for informational purposes only. This information does not constitute legal advice, nor should it take the place of independent legal counsel. As immigration laws are complex and ever changing, we recommend that you consult counsel before taking action in any particular case.

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