Sometimes US immigration law doesn’t provide clear visa options for people looking to work in America. These individuals are daunted by the process, and as attorneys we often feel like we are trying to fit a round peg into a square hole. But at other times, thankfully, there is more than one option for a client and so it’s our job to talk them through the choices to see which is the overall best fit. This can happen, in particular, with some entrepreneurs who are interested in opening up their own business in the US.
Overall, US Citizenship & Immigration Services (USCIS) has made no secret of the fact that it wants to be open and reasonable to entrepreneurs as they provide a huge benefit to our economy (though, of course, the Trump administration may change things). In a press release issued by the Obama Administration in August 2016 they detailed the exceptional contributions to America made by immigrant entrepreneurs. Immigrants help start as many as one of every four small businesses and high-tech startups across the US, and studies suggest that immigrants or first-generation Americans founded more than forty percent of Fortune 500 companies.
To that end, the government has made a concerted effort to focus on improving the ways entrepreneurs can come to the US to help our economy. In 2013, USCIS launched an initiative called “Entrepreneurs in Residence” to brainstorm ways that the immigration law could provide better pathways to the US for foreign entrepreneurs looking to come to the country to start a business. This initiative brought USCIS together with private-sector business startup experts, and as a result USCIS launched an “Entrepreneur Pathways” resource to provide immigrant entrepreneurs with information to learn about different visa categories they may be eligible for. Of course, because of the number of choices available USCIS still advises that individuals consult an attorney to figure out their best option.
In this post, we have a conversation about real visas options with a fictional client, Amanda, who in this scenario is a well-known British entrepreneur and celebrity chef. Amanda has made a name for herself in the United Kingdom and Europe and now wants to open a restaurant in the US. (Please note that no Daryanani Law Group client information is used or revealed and any similarity to real people is entirely coincidental.)
AMANDA: Thank you so much for seeing me today. I have so many questions to ask you.
LIZ: No problem at all. In fact, I’m a big fan of yours. My husband and I ate at one of your restaurants on a trip we took to London last year. I hope we can talk through all your questions and come up with a path forward for you. Why don’t you start by telling me about your current situation? What does your ideal scenario look like in the US?
AMANDA: Well, as you know, I’m a chef and restaurant entrepreneur. I have several successful restaurants in London, Paris, and Barcelona, and I now want to bring a restaurant to New York City.
LIZ: Do you see yourself doing the actual cooking in this restaurant or are you going to be on the business side of things?
AMANDA: That’s a good question. I could go either way. I think my decision may be based on what we talk about here today. My dream is to just be a chef but I know that for the business to really function as I envision I may have to take the lead on the business end of things. Honestly, I think the ideal would be me as the executive chef but also overseeing the overall running of the business.
LIZ: Financially, what is the plan to bring the restaurant to the US? Is it your money that you will be using to set up the US entity? How much capital do you think is needed to get the business up and running?
AMANDA: Well, this is up for debate too. I have the financial wherewithal to fund it myself through profits earned from my recent cookbook deal combined with the sale of my home in the UK, but I was thinking of getting a British colleague of mine to invest with me unless it affects my ability to get a visa. I have about $700,000 set aside for the investment and I’ve already located a space where there is now an existing restaurant so we could take over some of their equipment and the space will only need minimal renovations.
LIZ: Ok, so probably the most obvious place to start in terms of visa options is the E-2 visa. This is a visa that would allow you to invest in the US business and once you get the visa you would manage and control the business. It is not a visa where you could work just as a chef.
You would have to invest a “significant” amount of money in the business. There is no magic number that is defined as significant because it is based on many factors. A five-year business plan is needed to show what initial investments/purchases are needed and how much funding it will take to get the business up and running. It is likely that $700,000 would be viewed as significant so I’m not too concerned about that figure.
As you are a UK citizen, the investment can be all yours or at least fifty-one percent yours and your British colleague’s, as we would have to show that the business is majority owned by UK citizens. This is because the E-2 is a treaty-based visa and only certain countries have this treaty with the US. The UK is one of them. People with citizenship in the country of the treaty coming to invest funds from that country in the US can potentially qualify. The UK is unique in that it has an extra requirement where the E-2 applicant has to be domiciled in the UK when applying. As you are living and working in London currently, that shouldn’t be an issue.
One thing to keep in mind is that the funds have to be invested before you apply for the visa. You cannot just intend to spend the money. This means that you have to actual purchase equipment, pay rent, buy furniture, and so on before you apply for the visa to show the funds are already invested in the business. The one exception is if you keep funds in an escrow account where the funds can be withdrawn only if you don’t get the visa.
AMANDA: If I’m living and working in the UK how do I set up the business in the US?
LIZ: If you need time to come to the US to find a space, sign a lease, make the investment, we could apply for a B-1 in contemplation of an E-2 visa for a six-month visit that would allow you to come to get things set up. You just have to be very careful that you don’t perform any action that would be designated as “work.” For instance, that would include actually cooking and serving meals. You are only allowed to come on the B-1 to invest, get things set up and the business running, but then you must leave the US to apply for the E-2 at the US Embassy in London and wait until approval to come to the US before working.
AMANDA: Are there any downsides to the E-2?
LIZ: The E visa process requires a lot of documentation and the process of having to get it all set up and then leave the US and wait for the E to be approved can be daunting and may not be the most cost-effective option for you.
There may be another option. There is a new entrepreneur temporary parole process that will be available soon, unless there is any change to the regulations in the next few months. It’s called the International Entrepreneur Rule. This new rule comes after the Department of Homeland Security (DHS) added new regulatory provisions that would allow for parole into the US on a case-by-case basis for entrepreneurs or start-up companies who they believe would benefit the US through demonstrated potential for rapid business growth and job creation. You’d need to have at least ten percent ownership interest in the company and have an active and central role in the operations. There are a number of different ways to show an investment but basically if there is investment of capital totaling $250,000 or more it should qualify. If granted, you would be able to be admitted for an initial period of thirty months. However, this final rule doesn’t take effect until July 17, 2017. Additionally, there has been some recent press suggesting that this rule may be further postponed or amended. Because a lot is still uncertain about this process, it may not be the best option for you at this time.
AMANDA: Oh, I’m not sure that timing works for me. Also, this discretionary parole status seems a bit too risky to rely on, especially with a new administration. I’d rather apply for an already-established visa type.
Do you think the E-2 is right for me?
LIZ: Are you planning on bringing other employees with you from the UK? If so, the visa becomes much more cost effective as we can apply to register the company at the US Embassy/Consulate along with your visa application. Then, any supplemental application is much easier and faster to process.
AMANDA: I wasn’t planning on bringing any other workers from the UK with me. I’m just interested in myself right now. I think we could put together a strong US team as I have contacts here that know good people. The thing I’m more concerned about is the fact that I couldn’t come as a chef and I’d be left to just handle the business side of things. Are there any other options?
LIZ: Yes, there are. I think I have a good idea of where we ultimately will land but I want to make sure we go through all your options just in case one of the other visas strikes you as desirable. Let’s talk about the L-1 intra-company transfer visa. Do you want to open a new restaurant in the US or do you want to have the US restaurant be an affiliate of the UK restaurant you run now?
AMANDA: I was planning on opening a brand new restaurant and not have it be connected with the London restaurant other than the fact that I would be associated with both. I only own forty percent of the UK restaurant though and the rest is owned by an ex-associate who would not be partner in the US venture. Is that a problem?
LIZ: Well, it does eliminate the possibility of an L-1 visa. For that visa to work, the US and the UK entities would have to be affiliates (or parent/subsidiaries) and if you only own a minority interest in the UK entity but want a majority interest in the US entity, the two are not going to be affiliates. If they were, we’d have to show that you were an executive, manager, or held specialized knowledge in the UK entity and will also keep that type of role in the US. But the ownership requirement really puts this out of contention.
AMANDA: Is there anything else I’d be eligible for?
LIZ: Yes, I think there may be a few things. But first, can you tell me about your educational background?
AMANDA: I have a master’s in business administration from the London School of Economics.
LIZ: Ok, well, if you were coming solely to work in a professional business-related role, such as the company’s CEO or CFO, there may be an option for the H-1B visa. This visa requires that you are coming to the US to fulfill a professional position—meaning one that requires at least a bachelor’s degree or higher in a specific field of study related to the position. Something like a restaurant manager position would very likely not work for this visa as that position has been found by USCIS to be one that traditionally does not require a bachelor’s degree in a specific field to perform. (This would almost definitely be true for a chef position as well.)
Something higher level and related to the finances and operation of the business may be doable. The H-1B would also demand that you will be paid the prevailing wage as set by the Department of Labor. You need to be sponsored by a US-based company. The sponsorship and salary shouldn’t be an issue but there are a number of things that won’t make this an ideal option for you. For one thing, H-1Bs are subject to an annual lottery for first time applicants and thus you’d have to wait until the lottery opens up again on April 1, 2018 to apply and risk not being picked in the lottery. Also there are potential changes to the H-1B program under the Trump administration.
Even if you are picked and ultimately approved, the first day you could come to the US in H-1B status would be October 1, 2018. I know your plans are to come before then so obviously this is not ideal. Additionally, if you have any ownership interest in the sponsoring entity, that could also make the case difficult. You’d also have to stick with just the business-related role and couldn’t be a chef. The H-1B is also ultimately limited to six years maximum (with a limited possibility of further extension).
Do you hold any citizenship other than the UK?
AMANDA: Yes, I am also an Australian citizen.
LIZ: That could be helpful to eliminate at least one hurdle of the H-1B as there is a visa just for Australian citizens without the same cap as the H-1Bs. It is called the E-3 visa. E-3s are like H-1Bs but E-3s are in much less demand and thus historically the cap has never filled. Also, they are relatively quick to obtain as you can apply directly at the US Embassy/Consulate for the E-3 without having to have a petition pre-approved by USCIS first. Still, with your ownership interest and your limit to a business-related job only, I’m not sure this is the ideal visa for you either.
I think I have one more visa option that you may prefer over all those mentioned. That is the O-1 visa. An O-1 is for people who hold distinction (or “extraordinary ability”) in their professional field. I think it is a no-brainer that you are that type of person but USCIS looks at certain categories of evidence to assess whether a person is at the level of distinction so let’s talk through some of them. Can you tell me about some of the accolades you have been awarded over your career and press you’ve received?
AMANDA: Wait, isn’t the O-1 just for artists?
LIZ: You are an artist! Your high-end fine dining style of cooking is certainly a culinary art and immigration has agreed that this fits the definition of artist. But even if it didn’t, an O-1 can be obtained for people of extraordinary ability not just in the arts but also business, sports, and education.
AMANDA: Wow, I didn’t know that. Let’s see: accolades, press. My restaurant in London has one Michelin star and I won a James Beard award. I have loads of press on me and my various restaurants including reviews of the food (most of which are positive).
LIZ: Have you served as a judge in any competitions? And also let’s talk about high salary.
AMANDA: I’ve been a judge on The Food Network a few times. My salary isn’t that high as I usually dump most of the profits into the restaurant.
LIZ: This is great. All the evidence that you list is perfect for the O-1. Also, there is a way to show that your earnings are high even if you turn them into an investment back into the restaurant instead of depositing them. But the great news about the O-1 is that as long as we define what it is that you are extraordinary at, you can be a chef but also have a hand in running the business. Truly you are not just a celebrity chef at this point but also a restaurant entrepreneur. As long as we show both, I think we can craft a job description that lets you cook but also direct the course of the business. This is allowed on the O-1.
Although ownership interest does have to be reported on the O-1 (just like the H-1B) this visa type is a bit more forgiving. I think it would be ideal if you go for this visa but to have your colleague join you in starting the business so that your ownership isn’t 100%. Even O-1s aren’t allowed to be self-employed. They have to be sponsored by an entity (such as a restaurant) which has the authority to manage and control their work.
If you have a business partner (or even just a board of directors) who you are beholden to, that would be sufficient for the O-1. The entity would have to be formed in order to file the O-1 petition with immigration but we don’t have to delve into the business plan, show the trail of investment, and so on. We only need to show it’s an existing/incorporated business. The main focus of the application is on you and your accolades. The O-1 petition can request three years duration the first time and then be extended beyond that without a lifetime limit (as long as your employment continues to exist).
AMANDA: Oh my gosh, you have made my day. I wanted to have a business partner ideally anyway and I love the flexibility I could have in my day-to-day operations with this type of visa. Also, collecting the proof of my awards and press shouldn’t be too daunting as I have an assistant who can help with the legwork on that one. Alright, let’s get started!