Immigration Visa Lawyer Blog

The Regional Center Pilot Program is a subcategory of the Employment Based Fifth Preference Immigrant category also known as EB-5 or the Alien Entrepreneur Program. The program was first instituted in 1992. Three thousand of the 10,000 total available EB-5 visas are set aside for aliens who invest in a US Citizenship & Immigration Service ("USCIS") designated "regional center" in the United States organized ''for the promotion of economic growth, including improved regional productivity, job creation, and increased domestic capital investment.''

A Regional Center is defined as any economic unit, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation, and increased domestic capital investment. The advantage of creating a "regional center" is that it is pre-approved by the USCIS for investors to receive permanent residence on an expedited basis.

The alternative to a creating a regional center is when a foreign investor establishes his or her own enterprise for the purpose of investing capital which would lead to permanent residence. This is what is called an individual (in comparison to a regional) EB-5 application. Such foreign investor must show that he had invested or is actively in the process of investment of at least $1,000,000 (or $500,000 in a targeted employment area) into a new commercial enterprise which would employ at least 10 US workers. A foreign investor investing in a new commercial enterprise affiliated with and located in a regional center is not required to demonstrate that the new commercial enterprise itself directly employs ten U.S. workers; a showing of indirect job creation and improved regional productivity will suffice. Another advantage of creating a regional center is that it provides permanent residence to the foreign investor on much more expedited basis that would an individual EB-5 application. For instance, once the regional center is approved, a foreign investor could receive permanent residence in 6 months as compared to at least one year when an individual EB-5 application is sought.

The Process of Creating a Regional Center

III. Creating the Organizational Infrastructure of the Regional Center
It is imperative to retain the services of experienced legal counsel who would draft the corporate or organizing documents which would establish the legal entity or entities operating the regional center and the future investment opportunities. There are several issues that must be considered when selecting the most appropriate organizational structure that would achieve the regional center administrator's short and long term goals. The organizational structure must weigh the regional center's liabilities in the face of capital raising endeavor. There are potential securities regulations issue that must also be considered as well as the corporate matters. Ultimately, the corporate lawyer will not only draft the organizational structure of the Regional Center, she will also draft the agreements between the future foreign investors and the regional center administrators. There has been numerous incidences of litigation in this area, and the corporate counsel must carefully study the failures of others in order to avoid the same pitfalls.

A. The Geographic boundaries of The Regional Center

The first step in creating a regional center is identifying the geographic area which would encompass the boundaries of the planned commercial enterprise. Any jobs claimed to have been created either directly or indirectly by the planned commercial activity that forms the basis of the regional center must be located within the geographic boundaries of the regional center itself. In addition, the regional center planners must show that their planned commercial activities will benefit the area. While there exists a natural desire to enlarge the regional center boundaries to include as many "indirect jobs" as possible, there is also the desire to limit the boundaries of the regional center to maximize on the positive economic impact brought about the planned commercial endeavor. Hence, the delineation of the boundaries of the regional center must be undertaken with great care thereby balancing these opposing objectives.
Put in other way, the higher the population of the area encompassing the regional center, the less impact per capita will the regional center inure.

The boundaries of the regional center should not be gerrymandered to avoid pockets of high population concentration as the USCIS will look disfavorably at such application as lacking in genuineness. The choice of the boundaries of the regional center in this case must be done in consultation with a credible economic and legal counsel to study the benefits and costs of including some or all of the proposed dairy operations into one regional center.

B. The Economic Study

The regulations require the planners of a proposed regional center to present a credible economic study which has the following main components:

• How the regional center plans to focus on a geographical region within the U.S., and must explain how the regional center will achieve the required economic growth within this regional area;

• That the regional center's business plan can be relied upon as a viable business model grounded in reasonable and credible estimates and assumptions for market conditions, project costs, and activity timelines;

• How in verifiable detail (using economic models in some instances) jobs will be created directly or indirectly through capital investments made in accordance with the regional center's business plan; and

• The amount and source of capital committed to the project and the promotional efforts made and planned for the business project.

The planning and execution of an economic study is a major undertaking as the economic, business and legal objectives may not overlap and the parties representing these interests must work closely and in tandem to achieve the "point of equilibrium" of these competing goals. Once the economic study is complete and reviewed, the next step in the establishmnet of a regional center is to present it to the USCIS with the required immigration forms. The USCIS will review the proposal and may have several questions before approving the petition which would establish the regional center. Once the regional center is approved, it is now ready for foreign investors to apply for permanent residence through investing capital into the regional center directly.

It must be noted that subsequent to the approval of the regional center the USCIS expects the regional center administrators to stand in the shows of the USCIS in managing the regional center moving forward. The USCIS has recently expressed that it will withdraw approval from regional centers which will not comply with the regulatory directives relative to the basic EB-5 program itself insofar as they apply to regional cetners. The relevant points the USCIS identified recently include:
• Establish representative point of contact with USCIS;
• Documentation of due diligence relative to alien's source of funds;
• Documentation of evaluation, oversight and follow up of any proposed commercial activity that will be utilized by the alien investor to create new jobs.
• Inventory of all participating aliens, nationality, address in the US, etc.
• Categories of business activities within the geographic boundaries of the regional center;
• Documentation relative to each job creating commercial enterprise located within the commercial enterprise;
• Amount of alien investor capital and amounts of other domestic capital that has been invested together in each job creating commercial enterprise.
• Total aggregate of approved EB-5 alien investor petitions for each fiscal year.
• Total aggregate of "new" direct and/or indirect jobs created by the EB-5 investor through the regional center for each fiscal year from inception.
• Total aggregate "preserved" jobs by the EB-5 alien investors into troubled business if applicable.
• Notification of any fiscal year not having investors participating with explanation and plans to procure investments.
• Notification within 30 days of any material change.

C. The Permanent Residence Application Process

The process begins by filing an Immigrant Petition for Alien Entrepreneur with the USCIS at the California Service Center which has jurisdiction over the administration of the alien entrepreneur program.

As mentioned previously, the foreign investor can only file for his or her immigrant petition after proof of investment is submitted and after the regional center had been approved by the USCIS. Once the Immigrant petition is approved, the foreign investor is now ready to apply for permanent residence along with his immediate dependents.
Permanent residence is initially issued conditionally for 2 years after which the foreign investor must file again to remove the conditions. In the subsequent application, the foreign investor must prove that the terms and conditions on which the regional center was created continue and remain intact throughout the 2 year period. Once the USCIS is satisfied that such conditions are met, the foreign investor receives permanent residence for 10 years.

In a well reasoned order handed down by Judge Susan R. Bolton of the United States District Court for the District of Arizona, the most unreasonable, atrocious and unconstitutional aspects of Arizona's Senate Bill 1070 were blocked, or rather, enjoined from taking effect with the remainder of the legislation on July 29, 2010. In what almost certainly will set the stage for an appeals process culminating in review of state government's power to supplement federal law in the area of immigration, Arizona has appealed this ruling to the United States Circuit Court for the Ninth Circuit. If the Ninth Circuit rules on the matter before the end of the year, the case could be heard by the Supreme Court of the United States in its next session, and possibly decided within a year from now.

While the most egregious aspects of SB1070 have been strategically excised from the whole of the bill by the order of Judge Bolton, the bill ultimately stands and the remaining portions went into effect July 29, 2010. Because the process for enjoining and appealing this bill as well as its ramifications may not be entirely clear, I have briefly summarized the judge's legal opinion and the effects that this ruling has on SB1070 in board terms. As a reminder, this attorney and the Law Firm of Shihab & Associates has offered the following aspects of Arizona law for the purposes of public discussion and discourse only. This lawyer does not suggest nor insinuate that he is licensed practice civil or criminal law in the state of Arizona.

Summary

Senate Bill 1070 took effect in Arizona on July 29, 2010. Judge Susan Bolton only blocked certain parts of the bill from taking effect with the rest of the bill. Such a legal challenge and outcome was fully anticipated by the drafters of SB1070, who made certain aspects of the bill severable, or able to be separated, without destroying the entire bill. The US Department of Justice, the adversary to SB1070 in this instance, specifically chose certain aspects of the bill to challenge, leaving other aspects unopposed. Some of the most important aspects of SB1070 that remain in effect or fully enforceable by officers in Arizona are as follows:

• Provision allowing residents of the state to sue any state official or agency that restricts enforcement of federal immigration law to any extent less than the maximum allowed by federal law;
• Creating a crime for stopping a vehicle to pick up day laborers if the stopping creates an impediment to normal movement of traffic;
• Creating crimes for intentionally or knowingly employing unauthorized aliens; and
• Transporting or encouraging unlawfully present aliens to come to Arizona.

Interestingly, law enforcement officers and public employees are caught in a catch 22 situation regarding their role in Arizona's immigration scheme. Specifically, all agencies of the State of Arizona are required to carry out federal law in regard to federal immigration rules or risk being sued. However, it is reasonable to believe that most employees of the state of Arizona are not experts in Federal Immigration law, leaving such agencies and employees potentially open to suit for actions they do not know are unlawful.

The following are aspects of the bill that have been enjoined, or stopped from enforcement, by the federal court:

• Requirement that under reasonable suspicion of unlawful presence in the United States, that police officers make a reasonable efforts to ascertain the immigration status of the person, and ascertain the immigration status of a person upon release from arrest;
• Creation of a crime for failure to apply for or carry immigration papers;
• Create a crime for an unauthorized alien to solicit, apply for or perform work; and
• Authorize the warrantless arrest of a person where there is probable cause to believe the person has committed a public offense that makes the person removable (formerly called deportable) from the United States.

Despite the injunction of this law, there are aspects of the enjoined portions of SB1070 that seem to have overlapping effects with current law enforcement procedure in Arizona. Sheriff Arpaio of Maricopa County (the Phoenix metro area) of Arizona is still conducting his "sweeps" pulling over cars for minor violations and then taking the opportunity to lead the detained person down a path of questioning to eventual disclosure of his or her immigration status. While it is unclear where to draw the lines between enforceable state law and unenforceable enjoined provisions of SB1070, what is clear is that violating a federal injunction is grounds for a charge of contempt of court. In the spirit of SB1070, it is only just that such a person violating an order handed down by a federal judge should be prosecuted to the full extent of the federal law.

Discussion of the Enjoined Sections of SB1070

The legal ruing handed down by the federal court in this case is what is known as a preliminary injunction. This order stops conduct from being carried out as requested by the moving party from occurring while the merits of the case have yet to be decided, i.e. the case has not yet gone to trial. This is essentially a temporary stop. The ruling on a temporary injunction may be appealed to the next highest court. This is the action that the State of Arizona has taken, asking the Ninth Circuit, the court above the US District Court for Arizona, to hear its argument.

Judge Bolton took the most appropriate action by only enjoining or blocking the aspects of the bill that were likely be won by the US Department of justice at trial, while letting other aspects of the law go into effect. The drafters of SB1070 intentionally wrote the bill to allow this type of severability, or the ability for sections of the law to be blocked without destroying the entire bill. As a consequence, Judge Bolton has essentially narrowed the issues that will be argues at the next level to the issues below.

Continue reading "The Most Appalling and Unconstitutional Aspects of Arizona's SB1070 Blocked by Federal Court" »

The Regional Center Pilot Program offers an exiting avenue to a fast track Green Card for foreign nationals who wish to invest $1,000,000 and in some circumstances only $500,000 into a business association that advances economic expansion, productivity, job formation and increased monetary investment into a definable geographic area of the United States. The main advantage of the Regional Center variety of EB-5 employment creation green card is that unlike in the traditional EB-5 category where it must be shown that at least 10 jobs will be directly created from the investment, regional center investors may take into account indirectly created jobs. This means that regional center business associations do not need to create a payroll position for all ten jobs that are created. Rather, under the regional center program, the jobs of supporting staff, service people and contractors may be counted toward the 10 new jobs requirement. As a result, the Regional Center model creates a very attractive vehicle for a business association to attract large amounts of investors and their capital to the United States.

Proving that a regional center meets EB-5 job creation criteria

The organizers of the regional center must first prove the viability of the investment both in regard to the probability of success of the business and immigration law aspects. This requires a highly professional economic impact study of the proposed investment as well as a comprehensive petition package, addressing all of the economic and legal aspects of the proposed regional center before the USCIS.

Below is a list of the major points that must be conclusively established in order to establish a regional center before the USCIS:

Managerial Framework of the Regional Center

The petition must clearly demonstrate the managerial and executive structure of the regional center. Additionally, the petition must demonstrate how the center will be advertised to entice investors, how management discovers and analyzes investment opportunities for the business organization, how management will structure the venture investment and how management will supervise investment actions.

Comprehensive forecast of local and countrywide impact of the center on household earnings

A detailed business plan and report on anticipated expenses must be included within the petition. The document must not only show the direct expenses such as construction costs, maintenance costs services, repairs and utilities, but the report must also show the economic impact of all of these activities on the income of the people of the region.

Professional report on how the regional center will generate both direct and indirect jobs

It is not sufficient to merely assume that a set amount of invested dollars will create the requisite 10 jobs per Green Card applicant. In order to secure certification as a regional pilot center, the organizers must have a professional economic study conducted by a reputable organization to ensure success of the application before the USCIS. In fact, such a report often makes or breaks the case for a regional center. The report must be supported by economically and statistically legitimate calculations such as viability evaluations, breakdowns of overseas and national markets for goods or services produced and graphical representations of the equations used to estimate jobs created per investor.

Plainly observable, physically adjacent area for the regional center

The regional center must have an intended area on which to impact financially. The definition of area varies by the type of investment and the population density of the surrounding land. For example a regional center based on investment in farming may have an identifiable region as large as several counties or sections of a state. A regional center based upon real-estate development however may only affect a relatively small landmass.

Continue reading "Columbus Immigration Attorney Discusses the EB-5 Regional Center Pilot Program Avenue to Permanent Residency Part 1: Establishing the Regional Center" »

The American Immigration Lawyers Association ("AILA") posted on its website processing times for the Administrative Appeals Office, the AAO. The AAO has authority to review certain applications denied by the US CItizenship & Immigration Service ("USCIS"). Decisions issued by the AAO have been controversial as the USCIS may or may not be bound by them as a "legal precedence" or "lawmaking authority" as the American legal system normally operates. Hence, practitioners in the field of immigration law have found the administrative appeals before the AAO as futile and time consuming process. Nonetheless, applicants and petitioners whose cases have been denied by the USCIS have the legal obligation to "exhaust their administrative remedy" before taking their cases to Federal Court to challenge the USCIS' denial. In other words, the Federal Court system may not accept a challenge to a USCIS decision prior to having them try to resolve the matter before the AAO. Hence, the AAO appeals step is viewed by many as a necessary step, though time consuming.

Below, please find the most recent AAO Processing Times. As can be seen, it may take more than a year to review an H-1B visa case denial. An EB-2 or EB-3 I-140 denial may take 2 years to appeal before the AAO. In comparison, an alien entrepreneur petition form I-526 denial will take 6 months to appeal before the AAO.

Continue reading "Columbus Ohio Immigration Lawyer on Administrative Appeals Office - AAO Processing Times As of May 1, 2010" »

The treaty investor visa, or "E-2" visa, is a nonimmigrant visa category in which adjudication can seem subjective depending on the governmental office where the application is made. While there are hard and fast rules, the E-2 treaty investor visa engenders inconsistant governmental action by consulate offices abroad and by the USCIS. This article addresses the common problem areas and offers "real world" practical advice on securing an approval of an E-2 treaty investor visa.

There MUST Be a Treaty
The E-2 treaty investor visa is based on a qualifying trade treaty between the United States and various other countries of the world. The treaty must exist between the alien's country of nationality and the United States. If the requisite treaty does not exist, the alien will not be eligible for the treaty investor visa, irrespective of where the individual resides. A comprehensive list of treaty countries may be found on the U.S. Department of State website. For example, while the United States has made diplomatic and political strides in securing a friendly relationship with Russia, there is currently no treaty between the U.S. and Russia with respect to the E-2 treaty investor visa. Therefore, a foreign national with Russian citizenship will not be eligible for the E-2 treaty investor visa regardless of where the alien currently resides. The first step in identifying your eligibility under the E-2 visa category is to ensure the treaty exists between the foreign country and the U.S.

The next step is to know the law for qualifications under the E-2 treaty investor visa. Once you have established the requisite treaty and that you meet the legal criteria, a thorough analysis of the consulate precedent and procedures must be conducted as every consulate adjudicates E-2 treaty investors differently.

Each Consulate Has Its Own Procedure: You MUST Comply!
Knowing the foreign national's Treaty Visa Office's Consulate procedure and precedent is necessary to obtaining the visa. For many Treaty Visa Offices, there are extremely detailed and specific procedures for both registering an enterprise and filing for visa issuance once an enterprise has been registered. Each embassy or consulate website contains specific instructions that must be followed for each E-2 treaty investor visa applicant.

For example, the U.S. Embassy in Toronto, Canada has one of the most detailed procedures for obtaining the E-2 visa. The embassy requires that E-2 visa petitions be bound and organized into sections. The sections must contain dividers with numbered tabs that stick out from the edges. If the dividers are submitted without tabs, the submission will be rejected. These procedures can be found on the embassy website. Failing to abide by the specific requirements can result in dire consequences. Not following the procedural requirements can result in rejection or issuance of an evidentiary request, which can move the application to the back of the line and cause significant delay. Careful attention to consulate procedures ensures that consulate officers will adjudicate the case based on the merits.

In regards to precedent, the most common distinction made at the consulates is what is considered a "substantial investment." The law states that there is no minimum investment amount required. The investment must simply "be sufficient to ensure the success of the desired investment, and more than what is necessary to simply provide a living for the applicant." However standardized this requirement appears, standards differ from consulate to consulate on how it views what a "substantial investment" actually may be. An alien should rely on the experience of a lawyer to know these differing standards. For example, experience shows that a Canadian applicant was successful in obtaining an E-2 visa for a $36,000 investment for a 65% stake in a Wendy's franchise, while an Argentine national's 100% purchase of a 32 room hotel in Miami, Florida for around $700,000 was deemed as not meeting the substantial investment threshold. These are only examples and serve as a precaution for E-2 treaty investor visa applicants to understand that while the law is uniform, each consulate's adjudication under the law is not.

Trace the Investment: Show Me the Money!
One of the most important aspects of the E-2 visa involves analyzing where the applicant's investment came from, how it is invested, and whether the investment is irrevocable or at risk. Many E-2 visa applications have failed due to not properly proving these investment elements to the consulate officer.

Where did the investment come from? The dollars invested must be controlled by the applicant, and they must be real dollars available chosen for investment. The enterprise cannot be a gift to the applicant, while the money invested can be. To prove control, consulates often want to see a track record of the funds being used by the applicant (i.e., bank statement dating back several months) or documentation about the transaction that brought about the funds, such as the sale of property or savings accounts. Irrevocable inheritances of money from loved ones often serve as investment capital. As long as the inheritance is properly traced, the gift will be considered "controlled" by the applicant.

How is the money invested? Consulate officers want to see money spent on tangible items that will be used in the business to grow the business. These dollars can be spent on equipment, inventory, property (sale or lease) or even salaries or contracts for services. Placing the funds in an account for future use will be insufficient. A major aspect of the E-2 treaty investor visa is the notion that investment capital must be irrevocably committed to ensure the success of the enterprise.

The investment must be subject to risk of loss. Part of investing is the reality that the business may not turn a profit and may eventually fail. The money invested must be subject to this risk or else there is not a true investment for E-2 purposes. The money must be placed at risk and vested irrevocably in the business. Using personal funds or funds secured by the investor's personal assets will satisfy the requirement.

Continue reading "Columbus Immigration Lawyer: Obtaining the Treaty Investor Visa (E-2) with the Treaty Visa Office or USCIS Poses Traps for the Unweary" »

In applying for a treaty investor ("E-2") visa, the E-2 visa applicant must invest in a business that is more than "marginal." For E-2 purposes, what is this concept of marginality?

What is meant by the term "marginal" enterprise in E-2 treaty investor visa petitions?
If you are reading this you already know what an E-2 treaty investor visa is and you are seeking a detailed analysis of the finer points of the seemingly ambiguous term - marginality. This article addresses the legal definition of "marginality" within the E-2 framework and offers some practical advice on dealing with the concept on an E-2 visa petition. If you do not know what an E-2 treaty investor visa is, please click here before reading on.

The concept of marginality is often an overlooked aspect of the E-2 visa. However, it is a very important conept that must be addressed, especially for investors seeking E-2 classification based on investments in poor performing or underperforming existing businesses. Investing in an underperforming business can be advantageous for a foreign investor who can benefit by buying low and turning the business into a profitable enterprise. The concept of buying low and selling high is a fundamental in capitalist societies - but it poses problems for foreign investors seeking the E-2 visa. The problem is that the alien must submit the company's tax returns for the past three years. A poor performing business often times operates at a net loss. The immigration officer or consulate officer will examine the tax returns and if operating at a loss will view the investment as not being able to generate sufficient income, rendering it a marginal business. Many E-2 visas are denied on this basis. However, an investor can avoid this pitfall by carefully crafting their business plan.

Federal regulations defined a "marginal" enterprise as one that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. Obviously, a business that is currently operating at a net loss may not provide enough income even to support the investor's family. In this scenario remember the American dream takes precendent - show that you can "sell high!"

The Key is to Craft a Detailed E-2 Business Plan
There are various ways to show that the business is more than marginal, in the sense of only providing a livelihood for the applicant. If the business does not yet generate sufficient income necessary to support the applicant and family, then one can look to the economic impact of the business. The enterprise must have the present or future capacity to generate more than a minimal living for the investor and family in order to make a significant economic contribution. When future capacity is at issue (which it will be in enterprises operating at a net loss) you need to demonstrate that the future capacity to generate income will occur within a five-year period. The most widely recommended way to show future capacity is to submit a reliable business plan to verify the capacity to realize a profit within a maximum five years from the date the alien commences normal business operations.

The business plan should have a pro forma - that is, a hypothecial, realistic, financial statement based on assumptions. The assumptions deal with expected revenues and expenses. The overall assumption is that the business will grow and generate significant future income. The business plan should contain a detailed pro forma financial statement, a balance sheet and a statement of future cash flows. Without these financial projections, the immigration officer or consulate officer has no way of determining whether the enterprise will become a viable business. The financial projections are the only way the adjudicating officer can make a positive determination regarding the future financial health of the company. In other words, the officer will not be able to call the company marginal if a well-crafted business plan is included with the application.

Continue reading "Columbus Immigration Attorney: The Concept of Marginality in E-2 Visas and the Artfully Carfted Business Plan" »

Arizona has recently passed one of the harshest anti-immigration bills in America's modern history. While the bill is obviously aimed at those persons who have entered the United States from Mexico without inspection, the effects of this bill will be felt in all immigrant communities. The law gives state and local officers the authority to arrest and detain any person in violation of federal immigration law as well as proscribing punishments for those who aid immigration law violators. Those persons who are present in the United States on valid employment based visas, such as H-1B, L-1 and H-2A, as well as those persons who are eligible or have applied for a Green Card or Legal Permanent Residency through the PERM process or family based petition, now must be extra careful to remain in valid immigration status at all times and above all else always carry their "papers" on them. Just as the tide raises all boats, Arizona's law will affect all immigrants and their employers within that state

On the heels of Arizona's new law, certain Ohio senators have begun the process of drafting copycat legislation. The consequences of such legislation for Ohio business if such legislation were to be passed could be very grave. A bill that damages the confidence of Ohio's vital, skilled and hard working immigrant population in the state's openness and welcome for immigrants in general would do unnecessary harm to Ohio's already recession weakened economy. Before Ohioans jump on the anti-immigration bandwagon, perhaps they should instigate the wording of Arizona's legislation and its potential to harm Ohio's economy.

Ohio should not burden businesses with the requirement to investigate all contractors and subcontractors for services

Arizona's law makes it a crime to knowingly or intentionally employ an unauthorized immigrant. Furthermore, Arizona's law makes it illegal to contract with a person who intentionally or knowingly employs an unauthorized immigrant to perform work for the contacting person. If read literally, Arizona's law would make it a crime to contract with any person or business that has hired an unauthorized worker. As a precaution, businesses would be required to investigate the immigration status of all of their business contact's employees. For the large and medium sized corporations that call Ohio home, such a law would create an unreasonable financial burden and untenable risk of criminal prosecution. There are plenty of other states that would be happy to siphon off the business of Ohio's corporations with the lure of a decreased risk in liability.

Ohio's immigrants make Ohio stronger

Ohio is home to one of the most diverse and most representative cross sections of business, industry, agriculture, research and government as can be found in the United States as a whole. Ohio's many colleges hire the best and brightest people in the world to teach and carry out research. Ohio's businesses rely on skilled workers in engineering and technology to fill positions where not enough American citizens can be found to fill demand. Finally, Ohio's agriculture relies on the labor of H-2A non-immigrants to carry out some of the toughest jobs on the farms and in the fields. Ohio needs to attract immigrants in order to fill vital jobs that make Ohio's economy strong. Why would we want to injure or insult our immigrant population by requiring them to carry "papers" like in some dictatorial third world country? Again, there are plenty of other states and countries that would love to attract skilled and hard working immigrants to carry out the jobs that are vital to the economy.

Continue reading "Columbus Immigration and Visa Attorney Examines the Effects of Potential Immigration Bill on Ohio Business" »

U.S. Senators from the Democratic Party have recently released the first serious outline for eventual Comprehensive Immigration Reform legislation. This plan not only re-writes the rules regarding the attainment of citizenship with regard to those aliens who have entered without inspection, but it also alters the legal landscape for gaining an employment based green card through the PERM process as well as H-1B and L-1 temporary visas. While some of the changes that have been outlined largely appear to bring long needed adjustments to the employment based visa system, there is cause for concern regarding certain aspects of the plan relative to employment based immigration. The American public, petitioning employers as well as highly skilled persons from around the world are left to wonder, does this comprehensive immigration reform plan really do more to attract the world's best and brightest, or does this plan discourage highly skilled people from working in the United States. Is this plan for Comprehensive Immigration reform a wolf in sheep's clothing?

The Effect on Educated Foreign Workers

The central theme of the proposed immigration plan, relative to employment based immigration, is to encourage highly skilled laborers to immigrate permanently, while at the same time discouraging temporary visas for highly skilled persons. This goal is accomplished by simply systematically removing restrictions for obtaining a Green Card for certain highly skilled foreign nationals, while a bevy of crushing restrictions will be imposed on employers hiring temporary workers under the H-1B and L-1 categories. (See page 18. Section A.) Whether it is the unintended or simply unspoken net effect of the proposed policy changes, the number of highly skilled persons approved for employment based immigration will be reduced under this proposed plan in the form that it is written.

First the Good News

This proposed plan for immigration recognizes that the current system of assigning Green Cards for highly skilled workers on a country by country basis has few if any positive policy aspects. Under the new plan, per-country employment based immigration caps will be abolished. In contrast, the current system nonsensically imposes a five year waiting period for obtaining a Green Card on people from India or China who possess a master's degree. Additionally, Employment Based Green Cards for persons from Mexico holding a bachelors degree are currently unavailable at all, while persons with bachelor's degree from any other country in the world could theoretically obtain a Green Card, eventually. Removing the per-country preference for employment based immigration for highly skilled individuals is a welcome and needed change to the current immigration scheme.

Additionally, the proposed plan simplifies the employment process for aliens who hold advanced degrees from American universities and enter the United States with a valid offer of employment from an American employer. This change is intended to remedy the incongruence between America's open pursuit of foreign nationals to study in American Universities, but refusal to allow the same talented people to remain to work and live.
This plan also removes the "non-immigrant intent" requirement to many of the visas that are given to foreign national students. Under the current plan, most student visas require that the student have no immigrant intent when studying in the United States. This requirement is fulfilled by not allowing such students to immediately apply for immigrant visas in most situations. Some visas even require students to return to their country of origin for a period of time before returning to the United States after they have graduated.

Part of the legislative goal of the old policy was to promote American ideas by forcing students to return home and use the knowledge, skills and American experience in their native countries, thereby expanding the American cultural influence to the world. At this point in time, most countries have been exposed to American ideas and ideals and have accepted or rejected the same. Therefore, it is high time that America not snub the very people that America educates here by requiring them to move back home or wait for some ridiculous period before receiving a Green Card. The proposed plan would do much to remedy this outdated policy objective.

... and then the Bad News

The H-1B and L-1 system of temporary visas for skilled workers has come under increased scrutiny for years. Many administrative policy changes have been levied upon these visas categories in order to prevent perceived fraud, abuse and injury to Americans seeking jobs. The proposed plan would now set in stone tougher requirements for obtaining and maintaining such visas through legislation as well as imposing increased penalties on those businesses and employees attempting to obtain an H-1B or L-1 visa without adhering to the law.

Continue reading "A Wolf in Sheep's Clothing? : Columbus Immigration Attorney Discusses Comprehensive Immigration Reform's Effects on the PERM process, Green Cards as well as H-1B and L-1 Visas" »

The North Atlantic Free Trade Agreement provides immediate visa solutions for Canadian Businesses and Professionals. These visa solutions include Treaty Trader "E-1" visa, Treaty Investor "E-2" visa, Intracompany Transferee "L-1" visa and Professionals under NAFTA "TN" visas.

NAFTA has powerful mechanisms which allow Canadian Professionals, Businessmen and Investors are able to present their visa applications at a port of entry (whether at an airport or land port of entry), obtain visa status, enter the US to immediately engage into gainful employment all in one day.

It is hard to believe but the US Immigration regulations under NAFTA has a built in mechanism for on-the-spot processing of visa applications at any participating port of entry. This mechanism is grossly underutilized as immigration practitioners forget that NAFTA allows the immediate processing of several key non-immigrant visa applications, a mechanism unavailable to nationals of any other country. For that purpose, Canadian Investors, businessmen and professionals certainly have an advantage. This blog article is intended to review three critical visa solutions which allow Canadians to enter the US on an expedited basis and to immediately resume their business or professional activities.

What is NAFTA?

NAFTA stands for The North Atlantic Free Trade Agreement. It is a treaty between the United States, Mexico and Canada. NAFTA is intended to ease trade between these three nations. It is one of the most expansive and powerful treaties on the planet with far reaching implications in all aspects of trade. One of the most important components to this treaty is the ease of maneuverability of investors and processionals among the signatory countries. As will be seen below, NAFTA provides instant visa solutions for investors and professionals.

Instant NAFTA Visa for Canadian Investors (E-1 & E-2 visas)

US Immigration laws allow two types of nonimmigrant visas for traders and investors.

Traders are Canadians who will engage in substantial exchange of goods, services and/or technology between Canada and the US. Such traders must come to the US to direct and operate an enterprise that is engaged in such trade. Canadian Investors who wish to carry on such activities may receive treaty trader ("E-1" visa) by submitting a comprehensive application package at the port of entry showcasing their operation in the US and containing evidence of such planned substantial trade. The application forms along with all supporting evidence must be presented along with the filling fee at the port of entry. The port of entry officer will review the evidence, process the application for approval and issue the documentation evidencing the visa status.

Likewise, Canadian investors who wish to enter the US to invest into a commercial enterprise which will produce a product or service may also apply for their visa status at a participating port of entry and receive their visas the same day. The legal criteria for issuance of treaty investor ("E-2") visa include that the investment meets the substantiality and marginality tests and it is a real active (not idle) commercial endeavor. As explained previously, the application package must be presented along with the filing fee, completed immigration forms and supporting documentation at a border port of entry or at the airport prior to landing in the US.

Instant NAFTA Visa for Canadian Company Transferees

Canadian professionals possessing specialized knowledge and executives who wish to be transferred to a US company that is a parent, subsidiary or one that is affiliated with a Canadian enterprise may also process their visa applications and conclude their immigration case in one day by using the NAFTA provisions. This visa category is known as Intracompany Transferee visa or L-1 visa. L-1 visas are two types: 1) L-1B for Canadian professionals possessing specialized knowledge; and 2) L-1A for Canadian Executives. One important legal criterion that cannot be missed is that the L-1A or L-1B applicant must had worked for at least one year within the three years prior to his/her admission to the US in the Canadian company. As with the previously explained visa solutions for traders and investors, Canadian Intracompany transferees who wish to enter the US on an expedited basis may do so by applying at the port of entry paying the filing fee and presenting the immigration forms with all of the documentation showing that applicant qualifies for such visa status.

A recent example of this expedited visa processing pursuant to NAFTA was processed by our firm recently. I was contacted last month by a major multinational company which had branches all over the world. The company provides replacement parts to specialty automobile items and caters to consumers at large. The company engaged in a vigorous advertisement campaign in the US which spiked demand for highly trained technicians. The spike demand required service to be provided to consumers on an expedited basis through a window of opportunity. There were not sufficient technicians in the US so the company turned to its affiliate company in Canada.

Our firm immediately gathered data and produced packages which included immigration forms, documentation supporting the existence of an "affiliate" relationship between the Canadian and the US companies, as well as the fact that the required technicians met the regulatory definition of workers "possessing specialized knowledge." Within few days from being contacted the technicians arrived in the US and began to work immediately.

Continue reading "Canadian Investors, Businesspersons and Professionals Have Advantage under NAFTA" »

It is the best kept secret in American farming: foreign investors are coming to the US to start mega farming operations in all aspects of the farming industry including dairy, swine and poultry. For instance, Ohio, Indiana and Michigan has witnessed the migration of at least 80 families to operate multimillion dollar dairy farming operations during the previous decade. Most of these families entered the US on a treaty investor "E-2" visas or Intracompany transferee "L-1" visas.

The declining dollar value has provided European farmers with stronger purchasing position in the face of a significant US recession and dwindling real estate values. European farmers come to the US armed with formal agricultural education and mastered techniques in their respective industries. No wonder European farmers are better equipped than their US counterparts as they are used to working in adverse farming conditions in their homeland dealing with more restrictive environmental, zoning, as well as quota production regulatory systems than in the US. Hence, the US offers a freer and more favorable working environment. These conditions lead foreign farming investors to cause a recent spike in applications for treaty investor (E-2 visa), alien entrepreneur (EB-5) as well as Intracompany transfer (L-1) visas for farming investors.

The Dairy & Swine Farming Experience

About 80 European families entered the US within the last 10 years to operate multi-million dollar farming operations in the midwest alone. These farmers moved to Ohio, Indiana and Michigan. The typical dairy farm operation included 1500 to 3000 dairy heifers with a value between 5 to 12 million US dollars. In many instances entire families moved in to the US, including parents, grown children wives and girlfriends. Our law firm has applied innovative ideas to bring an entire family into the US to operate such farms. Most families initially entered the US on treaty investor visas (E-2) visas. In order to bring in their grown children and their wives, our law firm had to spilt their operation into several pieces (real estate, crops & feed operations, etc.) in order to create separate self sufficient entities to sponsor the various family members. For instance, the parents may retain ownership over the real estate operations including farming, manure hauling and structures into a separate leasing entity, while the grown children may partner on a company that will own the inventory, equipment, feed and other components of the operation into one entity. By bifurcating the operation in this manner, we were able to bring in several extended family members under the treaty investor visa (E-2) visa vehicle.

The problem with the treaty investor visa (E-2 visa) is that it somewhat difficult to move such investors to permanent residence. The E-2 visa requires the foreign investor to maintain non-immigrant visa intent. Hence, careful planning must be undertaken when applying for permanent residence through the alien entrepreneur program. Certain alien investors are able to take advantage of the lower investment threshold ($500,000)if their farms are located in lower population area.

The Intracompany Transferee Alternative

Certain farming investors are able to take advantage of the more practical Intracompany transferee visa (L-1A). This visa scenario allows for the change from non-immigrant visa to permanent residence in a more efficient and cost effective manner. In order for this work, the US entity must be a parent/subsidiary, affiliate or joint venturer with an overseas company and the foreign investor must had worked for the overseas company for at least one year during the three years preceding his entry into the US. Most of these requirements are not difficult to meet in most instances. The more difficult requirement is that the foreign entity must continue to provide a product or service after the foreign investor's entry to the US. In most scenarios this is not possible because the foreign investor will have liquidated the bulk of his or her foreign assets to facilitate the investment of the farming operation in the US. I cannot but stress that early planning and consultation with a competent corporate and immigration counsel can make a big difference in the success of an investment operation in the US.

Continue reading "US Investor Visa Solutions for Foreign Dairy & Swine Farmers" »

Legal Permanent Residency/ Green Card: Tax Issues

Foreign nationals seeking legal permanent residency (LPR Status or a Green Card) through the PERM process, other employment based petitions or through the various family based avenues will inevitably face various tax issues. All foreign nationals applying for such status must abide by certain federal regulations and burdens of proof addressing the tax issue. As the deadline for filing personal income tax returns bears down upon all persons who derive income from the United States, now is an opportune time to discuss some of the common issues that Green Card applicants and Legal Permanent Residents face.

Required Taxation Evidence Submitted with the I-485 application

All Green Card applications require proof of whether or not the alien was taxable in the previous three years. The federal regulations state that the alien must provide proof of whether or not he or she was required to file an income tax return for the past three tax years. Certain visa holders are free from from this requirement when filing an application for adjustment of status. Visa holders that may not need to pay US income tax include J, H-4, H-3 and F visa holders as long as they have received no gross income from within the United States.

Who is to be taxed?

Everyone who derives income from sources within the United States will be taxed. Foreign nationals are either taxed as an alien resident or non-resident alien basis. Resident aliens are taxed on all income that is derived from any source around the world, just like any US citizen would be. Non-resident aliens are only taxed on income that they have gained from sources within the United States.

How do I tell if I will be taxed as a resident or nonresident alien?

The IRS has formulated a test to determine whether or not an alien is a resident alien for tax purposes. This test is called the Green Card Test or the Substantial Presence Test. In most instances, a foreign national who is present in the United States for 183 days out of the year will meet the Green Card test and will be taxed as a United States Citizen would be. A foreign national may also meet the Green Card test and be considered taxable as a United States Citizen if he or she is present in the US for 31 days of the tax year, and has been present in the US for one-third of the days in the previous tax year and one-sixth of the days of the second most recent tax year.

Some days of presence in the United States are not counted toward the Green Card test. Some visa holders are exempt from paying US taxes such as F, J, M and Q visa holders, so usually days spent in the United States on these types of visas are no counted toward the Green Card test. Some visa holders that can be present in the United States for an indefinite period of time are also not liable such as A and G visa holders. Persons who are physically incapable of leaving the US or persons go back and forth to work in the US from Canada and Mexico are usually not taxable in the same manner as nonresidents. Also foreign nationals who are only in the US temporary, using the US as a stopping point while they travel between two locations outside of the US, will not have these days counted in the Green Card test.

Finally, even if the alien meets the Green Card Test, he or she will not be taxed as a US resident if it is shown that the foreign national was not within the US for 183 days in the most recent tax year and that the alien keeps a home in a foreign country, to which country the alien maintains a nearer relationship than he or she has to the United States.

What if I am a dual citizen?

The United States maintains certain tax treaties with other nations. A dual citizen may be able to show non-residency by providing the treaty and citing to the section of the treaty regarding residency. Two specific countries do not address this issue in their treaties with the US; Greece and Pakistan.

Estate Tax Issues for Foreign Nationals who Pass Away in the United States

The rate of estate taxation also depends on whether the alien is considered a resident or nonresident alien. The residency test for estate tax purposes is different that the test for income tax purposes. Specifically, a deceased person is considered a nonresident if that person was neither a citizen nor a resident of the United States. Residency for estate tax purposes is determined based on the persons' domicile (where the person lives daily).

The property owned by a non-resident within the United States is subject to a transfer tax, the same as US citizens. Foreign nationals who are residents are subject to the same estate tax rules that US citizens must meet. For both nonresidents and residents, an unrestricted spouse deduction is available for property that passes to a US citizen spouse. However, if the spouse is not a US citizen, there is no marital deduction unless the property passes to a special type of trust. A marital deduction may be available to non-residents if they are citizens of a country that has a tax treaty with the United States.

Continue reading "Legal Permanent Residency/ Green Card Holder and Non-Immigrant: Tax Issues" »

In 2002, President Bush signed into law the 21st Century Department of Justice Appropriations Authorization Act. The lack of regulations implementing this legislation has had the effect of freezing certain EB-5 immigrant investor applications indefinitely.

The EB-5 Immigrant Investor Visa

In 1990, Congress created the fifth employment-based (EB-5) preference category for foreign investors seeking to enter the United States to engage in a commercial enterprise that will benefit the U.S. economy and directly create at least ten full-time jobs. The immigrant must invest at least $1 million or $500,000 for commercial enterprises located within a rural targeted employment area. The annual quota for EB-5 investment visas is 10,000; however, this amount has never been reached since its inception.

The problem with the EB-5 category is chiefly due to the draconian nature of USCIS adjudication of EB-5 cases. Since inception the EB-5 category has been one of the most underutilized and overly restrictive visa categories. Many immigrant investors believe it is not worth their while to pursue a green card under this category (perhaps immigration reform will address this issue but will be left to another article). To make matters worse, many immigrant investors subject to the 2002 act have had their cases put on the shelf. There is a genuine lack of guidance under the 2002 act so these cases will remain pending until the regulations implementing the 2002 act are drafted.

AAO Precedent Decisions in 1998 Severaly Altered EB-5 Adjudication

The Administrative Appeals Office (AAO) of the USCIS issued four precedent decisions in 1998 that substantially restricted the already restrictive EB-5 category. These decisions altered guidelines and established more restrictive interpretations of the law. As a result approval rate dropped below 44% and concern among current and potential EB-5 investors spread. After these decisions, many Immigrant investors decided not to move forward with their EB-5 cases. More importantly, USCIS began removing some existing investors based on the retroactive application of the legal precedent set in the AAO decisions. This was the final straw for a large number of immigrant investors. Many decided that doing business in the U.S. was simply not worth the trouble, and rightfully so.

The AAO decisions created a retroactive application of the law. What this means is that immigrant investors whose cases were submitted before 1998 had to meet the guidelines created by the AAO decisions. How can one meet a guideline if they didn't know it existed? While I am not arguing the efficacy of retroactive legal precedent, I do believe that it is inequitable in many instances and is just another black eye for the EB-5 category. Fortunately, the retroactive application of the law was successfully challenged in one Federal Court. This decision led the way for the 2002 legislation.

The Regulations Implementing the EB-5 Legislation Have Not Been Finalized

In 2002, President Bush signed into law legislation that sought to fix the damage caused by the 1998 AAO decisions. The 21st Century Department of Justice Appropriations Authorization Act offered guidance to EB-5 investors to cure deficiencies in their previously submitted EB-5 petitions. These EB-5 investors include those foreign investors whose Immigrant Petition by Alien Entrepreneur (Form I-526) were filed and/or approved between January 1, 1995 and before August 31, 1998. However, if you fit into this category, USCIS cannot adjudicate your case because the final regulations implementing the 2002 act have not been drafted.

Until the final rules are issued, the Immigrant investors subject subject to the 2002 cannot have their cases adjudicated. This places the immigrant investor in a sort of limbo. It also creates significant burdens on the alien such as having to leave the country to renew their green card every few years. As it stands today, there are many immigrant investors who are left with EB-5 applications that are pending. Given the lack of guidance on when the regulations will implemented, these investors have no idea on when their cases will be finally adjudicated. In the most sophisticated and advanced society in the world, I would expect more - but then again, I'm a hopeless optimist.

Mandamus Suit as a Possible Solution?

A solution to the problem may be filing a lawsuit against the federal government in Federal Court in an action called a "mandamus suit." A mandamus suit essentially forces a government agency to perform a duty required by law. For example, the government is required to adjudicate family-based green card applications within 6-8 months. If your case is pending for 2 years, and USCIS will not adjudicate it, you can file a mandamus action to force USCIS to make a decision on the case. It may be approved or denied, but the mandamus action has the effect of forcing the government to do its job.

Continue reading "EB-5 Anomaly Suspends Immigrant Investor Green Card Applications, Indefinitely" »

The E-2 Treaty Investor visa allows a foreign national to come to the U.S. to operate his or her business and remain in the U.S. as long as the business is operating.

There is a great opportunity for treaty Investors from Canada to come to the United States to operate their Canadian businesses. However, E-2 treaty investors from Canada must be aware of the difficulties in applying for the E-2 visa at the American Consulate in Canada. Specifically, the U.S. Consulate in Toronto, Canada continues to set the bar high for certifying E-2 visas. The procedural hurdles involved in applying for the E-2 visa at the Toronto Consulate can be onerous for an applicant without a qualified immigration attorney. The Law Firm of Shihab & Associates has helped numerous Canadian Treaty Investors obtain the E-2 visa by carefully following these onerous procedures to ensure the case is adjudicated on its merits and not denied due to a defect in form.

The U.S. Consulate Toronto has jurisdiciton to adjudicate E-2 visas for applicants in the following Canadian territories: Ontario, Manitoba, New Brunswick, Newfoundland, NW Territories, Nova Scotia, Nunavut, PEI, Quebec and Saskatchewan. The consulate in Vancouver adjudicates E-2 visas for applicants in British Columbia, Alberta and Yukon.

Nationals of countries that have treaties designed to promote trade and investment between the United States and the foreign country can obtain visas to work temporarily in the U.S. Canada is one such country. The E-2 visa is a good option if the alien desires to start a business in the US. In order to qualify for the E-2 visa, the investor is required to come to the United States to develop and manage the operations of an enterprise in which the applicant has invested or is actively in the process of investing a "substantial" amount of capital. There is no set minimum level of investment. But, the higher the total cost of the enterprise, the lower the total investment is required as a percentage of the total cost. The investor must also be coming to the U.S. to develop and direct the operations of the enterprise. Accordingly, the applicant is required to have more than fifty (50%) percent ownership of the investment (unless the applicant is entering the U.S. as an employee of the enterprise).

Here is a brief rundown of the enerous procedures required at the U.S. Consulate in Toronto to approve an applicant for the E-2 visa. The Consulate begins by stating that all sections in the petition must be delineated by clear dividers with numbered tabs that stick out from the edges of the page. They will NOT accept submissions without dividers. If there are more than two documents under a numbered tab, that section must be subdivided into a lettered subsection with tabs for each document. Then the Consulate states that the petition should be organized so that the reviewer can make an adjudication within 5-10 minutes! If you read the list of required documentation (which I have reproduced below) you begin to see that the Consulate is more concerned with form rather than substance. So, if you believe you are eligible for the E-2 visa at the Consulate in Toronto, be sure to follow these guidelines to a tee!

Continue reading "Treaty Investor E-2 Visa For Canadians " »

Competent and Innovative Immigration Counsel can Find Common Denominator Between Seemingly Rigid Franchise Agreements and Complex Treaty Investor E-2 Visa Regulations.

Treaty Investor regulations allow certain foreign nationals to receive E-2 visas that would allow them to operate their own enterprises and live in the US. The beauty of E-2 visas is that they are the closest to permanent residence a non-immigrant visa can be because E-2 visas are renewed perpetually so long as the investment enterprise is operational. The vast majority of investments come from citizens of Canada, Mexico, Holland, Britain, Japan, and China. Many Canadian Citizens enter the US to operate small businesses as Franchisees of chain restaurants and other businesses.

Obtaining an investor visa through a business franchise carries certain legal obstacles worthy of special attention. That is because most franchisors have rigid investment programs which do not necessarily coincide with treaty investor E-2 visa requirements. For instance, franchisors may require foreign franchisees not only to invest their own monies to fund the purchase of the business franchised, but to also leverage the remaining cost of the franchise itself by taking out loans that are secured by the assets of the franchised business itself. In most instances, the loan taken out is secured by the fixtures, furniture, and equipment making up the investment enterprise. Unfortunately such financial arrangements runs afoul of Treaty Investor E-2 visa program regulations as any loan that is secured by the assets of the enterprise is considered as "non-qualifying" business investment; non qualifying investment funds may not be considered in the foreign investor's qualifications for the treaty investor E-2 visa applied for.

This article is intended to explain how our law firm implemented innovative legal strategies to satisfy the essence of complex investor immigration laws and fulfill the requirements of sometime rigid franchise requirements to bring about business opportunities and valid visas for foreign investors.

The Franchisor's Disaster Story

Several years ago, I was contacted by a major franchisor in Columbus, Ohio who had been recruiting investors for its newly introduced lines of fast food stores in Ohio, Michigan, New York and the New England States. This particular franchisor had built its business model to bring Canadian investors to operate this new line of fast food stores. Prior to my involvement as immigration attorney, this franchisor had submitted, through its own legal department treaty investor visas before the US Consulate in Toronto only to get denied. The US Consulate in Toronto had told the franchisor that the manner in which their program was set up in loaning the foreign franchisee funds to secure the investment which was secured by the assets of the investment itself did not satisfy US immigration laws in that it failed the "substantiality test." They called me in a panic wondering what to do. As you can see, their entire business model upon which they built their program was toppling down. After carefully examining their business model, I could not but agree with the US Consulate, that the requisite "substantiality test" for treaty investor visas was in fact not met.

What is the Substantiality Test?

In order to resolve the issue of treaty investor visas in the context of franchisee business opportunities, it is important to first understand the "substantiality test" required by E-2 visa rules. In addition, it is important to know how structure franchise investments and any resulting indebtedness in a manner that meet E-2 visa requirements.

Continue reading "Treaty Investor E-2 Visa Solutions for Foreign Franchisees" »

Most foreign investors believe that obtaining a treaty investor E-2 visa is accomplished by placing funds in a US bank account that has been earmarked for investment into a US enterprise. In fact, "Treaty Investor" E-2 visa regulations require that such funds be placed at risk in the commercial sense irrevocably into an active investment. Note the emphasis on the aforementioned words which will be explained in greater details below.

What is an Active Investment for Treaty Investor E-2 Visa Purposes?

In order to satisfy the E-2 visa regulatory criteria, the investor must present evidence to the US Consulate or the US Citizenship & Immigration Service, that she had placed its own funds into an investment which requires the investor's involvement. A passive investment such as an income generating real estate ventures which do not require any active participation of the investor (example: rental property) will not meet the E-2 visa rules.

Real estate investments are normally attractive for foreign investors due to their appreciation in value with the passage of time (though not recently). Many foreign investors prefer to place their funds into a property which will not only appreciate in value, but will also create a guaranteed stream of income over a term of years. There are numerous investment opportunities that fulfill these objectives such as triple net long term leases offered by franchise chains and other real estate management companies. But without the foreign investor's active participation in the operation of the business enterprise, the investment may not be deemed "active" under treaty investor "E-2 visa" regulations.

An example of certain real estate investments that would satisfy the treaty investor E-2 visa "active investment" regulations include development companies that purchase, develop, improve, construct and/or manage real properties. One can see the difference between "active" versus passive real estate investments. Like real estate, any other investment meets the treaty investor E-2 visa regulations if the foreign national actively managed the enterprise.

How Are Funds Placed At Risk in the Commercial Sense?

In addition to having an active business endeavor Treaty Investor E-2 visa regulations also require that the funds be placed at risk irrevocably. To meet this criterion the foreign investor must show that she expended funds into a business commitment with hopes that her investment will reap revenues. If business fortunes dwindle, the foreign investor stands to lose her initial capital. Hence, the irrevocable commitment connotes placing or committing actual funds in the market place. This can be accomplished by the purchase of inventory, fixtures, furniture, or equipment or the lease of real estate, etc. In other words, this E-2 visa criterion will be met upon the showing that funds have actually been committed towards the investment enterprise. The irrevocable commitment of funds must occur and be documented at the time of the application for treaty investor.

Continue reading "Treaty Investor E-2 Visa Advice Bits - The Irrevocable, Active Business & Risk Factors " »