Immigration Basics For Startups

IMMIGRATION OPTIONS FOR
STARTUP COMPANIES
www.rroyselaw.com

BASIC TERMINOLOGY
 NON-IMMIGRANT – temporary purpose

 IMMIGRANT – live in the U.S. permanently

 NON-IMMIGRANT INTENT – important at border

 LAWFUL PERMANENT RESIDENT – GC holder

 NON-IMMIGRANT VISA – obtained abroad

 ARRIVAL/DEPARTURE CARD I-94 – status

Specific issues for startups
 Dueto newness of company hard to file/sponsor employees for visas
because the company generally doesn’t have
 Quarterly statements
 Proven revenue
 Track record
 Public records
 Information on the web

NON-IMMIGRANT VISAS:
 F-1 : Student

 B1: Business Visitors

 H-1B: Specialty occupation

 H-1B1: Chileans , Singaporeans

 E-3: Australians

 E2: Treaty investors

 O-1: Extraordinary ability

 TN: Canadians/Mexicans

F-1: STUDENT VISA
 2 ways to work:

1. OPT (Optional Practical Training)
 12 months – usually post completion (if used while in school (summers, holidays) time is
deducted.
 Must be related to your degree program
 No more than 90 days of unemployment
 Must report to school where you are working (can be self employed but must be in your field)
 Only Extension available: STEM (Science, Technology, Engineering, Math) graduate: 1) just
graduated and 2) have a job in STEM filed and 3) employer is enrolled in E-verify = can extend
for 17 months
 Helpful for entrepreneurs with their own business
 H-1B cap met for fiscal year
 Salary not required, can work for equity

F-1 Visa
2. Curriculum Practical Training
-Internship program
-Must be part of the curriculum
-Has to be approved by the school (Form I-20)
-If you work for 1 yr. (365 days) full time you forfeit OPT or 2 years part-time

H-1B: SPECIALTY OCCUPATIONS
 Most common work authorized non-immigrant visa

 Available for workers in specialty occupations
 Position Requires a BA or higher in a specific field, or a BA equivalent (i.e. work experience)
 The Foreign national has the required BA or work experience in the particular field.
 (i.e. software engineer needs a degree in engineering or EE but not English)

 Dual intent visa

 Initially issued for 3 years; 6 years max. (few exceptions)
 Exception is VERY helpful to those nationals of China/India where it can take up to 10yrs.

 H-1B employee can port from one employer to another (begin as soon as filed- NOT RECOMMENDED)

 Annual cap of 65,000 every fiscal year which begins Oct. 1, but can file in April.
 20K additional allocated for US graduates holding MA or higher

CAP GAP: Switching from F-1 to H-1B
 Due to H-1B annual quota there is usually a limited filing season (usually first
few weeks of April)

 Approved H-1B employee can’t begin work until the start of the Fiscal Year,
October 1st.

 Generally students are given 12 months of OPT (usually expires in June) –
leaving the foreign national out of status if they don’t return home = GAP
between when status expires and when they can work

 Regulations fixed this problem: As long as H-1B is filed before the expiration of
OPT – work authorization and status is extended till the end of the Fiscal year.

H-1B Cap Exempt
 If you had an H-1B in the past 6 years
 Universities
 Research organizations
 Non-Profit organizations
 Affiliated with research organization or university
 If you can get a Cap Exempt H-1B, you can get an H-1B with a company that is Cap
subject
 Get a job at a university for a few hours a week and then get a job with a private
company (but try to get the private company to also sponsor you for a cap subject
H-1B)

H-1B Challenges for startups
 Size of company
 Funding issues (prevailing wage must be paid)
 Manager/executive positions harder to obtain (educational issues/ and need)
 Consider: Why would a small company need that? (director of marketing)

 Relatively expensive ($325 to file, $500 fraud fee, $750/$1500 ACWIA fee,
$1225 Premium processing) – recommend employer pays all fees
 Time Sensitive: Must meet qualifications at time of filing
 possible to get letter from university stating all requirements for the degree have
been completed but it can’t be conferred until June.

H-1B challenges
 Employer Restrictions:
 Must pay prevailing wage: can be high (entry level software engineer $75,000)
 Try to get a letter from a VC saying they will fund with a letter of intent
 May have contracts with clients to prove income
 Restrictions of off site placements
 Record keeping requirement
 No spousal work authorization
 Employer-Employee relationship: “control” – is there someone that is controlling the employee’s work?
 Try to prove that you don’t own 50% or more of the company
 If you own more than 50%: Convey the stock to a friend; or make sure you don’t have more than 50%
of the voting rights; have a separate board of directors that handles the hiring/firing of employees
 Have an employment contract (even if owner)
 Sign NDA; Covenant not to compete

H-1B
 Pros:

 Can have several H-1B’s at one time
 Each employer must apply separately – and must prove all requirements
 If you have H-1B and have been counted against an annual cap – not subject to
cap and Company B can sponsor you at anytime

 Dual intent- so you can travel and have a green card petition pending

CONCERNS FOR STARTUPS
 “FRAUD PROFILE” TARGETS SMALL AND NEWLY FORMED COMPANIES
 BEFORE FILING HAVE:
 A physical office space (a commercial lease is best)
 Money to pay salaries
 Comply with local ordinance (obtain a business license, taxes)
 Website
 Payroll records of employees (don’t just give equity)
 The Dun & Bradstreet data is used by USCIS to determine the legitimacy of
company
 Try to get company on the Dun Bradstreet

E-2 TREATY INVESTOR
 Nationals of Countries that have a Treaty with the US (no treaty with Russia/China/India)

 Substantial Investment: no set amount
 If total cost to run your company is under $500,000 a significant investment would be 80-85% of total cost
 $ Must come from investor
 IP counts (need to get an objective valuation); equipment, property, etc…

 Majority of stock must be held by nationals of treaty country (USC and LPR’s don’t count)
 Important: VC funding/ co-ownership might reduce your shares below 50%

 You can work for a company where nationals of your country have done the investment and
you are a key employee: (Executive/manager/essential employee)

 No employment requirement abroad

 Spouse can work

B-1 VISITOR
 Foreign national coming to the U.S. to conduct business activities
 Gainful employment NOT permitted
 Permissible business activities:
 Negotiating contracts, attend meetings, develop business relationships, attend
conferences and seminars
 MUST intend to go back to home country
 Cannot receive salary from U.S. source
 Entrepreneurs can use this to: set up an office in the U.S., meet investors, look for
office space, meet potential customers, open bank accounts, startup
incubator/accelerator programs.

TN: CANADIAN/MEXICAN NATIONALS
 Professional activities (limited class of occupations)

 Less restrictive than H-1B on educational requirements

 No prevailing wage issues

 Can’t
be self-employed (need a job offer from someone); Can’t be for a
company where you have a substantial ownership interest

 Entry for 3 years at a time

L-1: MULTINATIONAL TRANSFEREE
 Foreign Company abroad
 Qualifying relationship with a company in the U.S. (Parent, branch, subsidiary, or
affiliate)
 Must have worked abroad for the company for 1 full year (in the past 3 years)
 Manager, executive, or specialized skill employee
 L-1: 7 years max, L-B: 5 years, New office in U.S.: 1year
 Spouse can obtain work authorization
 Difficult for startups unless willing to work abroad for a year

GREEN CARD OPTIONS
 Family petition
 Married to USC/USC child – no backlog
 USC sibling/ LPR holder – backlog

 Political Asylum

 Religious Workers

 Investors (EB-5): $500,000 or $1 million and 10 U.S. jobs

 Employer Sponsor

EMPLOYER SPONSORED GREEN CARD
 Preference System: limited # per preference and by country
 China, India, Mexico, Philippines (serious backlogs)
 FYI: can take nationality of your spouse
 1st: Extraordinary ability/ outstanding researchers and scientist/ multinational
managers and executives
 2nd: Requires an advanced degree (Masters or BA + 5 years experience) AND the
job must require it.
 3rd: all other workers (All countries have backlog)

VISA BULLETIN: OCTOBER 2012
All
Chargeability CHI NA-
Em ploymen P HI LI P P I NE
Areas Except mainland I NDI A MEX I CO
t- B ased S
Those Listed born

1st C C C C C
2nd 01JAN12 15JUL07 01SEP04 01JAN12 01JAN12
3rd 22OCT06 08FEB06 15OCT02 22OCT06 01AUG06
Other
22OCT06 22JUN03 15OCT02 22OCT06 01AUG06
Workers
4th C C C C C
Certain
Religious U U U U U
Workers
5th Targeted
Employment
Areas/ Regio C C C C C
nal Centers

5th Pilot
Programs U U U U U

U.S. EMPLOYER SPONSOR
Phase 1: Labor Certification
 PERM

 US employer
 Full time permanent position
 Prevailing wage
 Recruited, advertised, and tried to find US worker and couldn’t find one

PHASE 2: I-140 Visa Petition
 Prove that the company can pay the prevailing wage

 Must prove the Alien meets the requirements

PHASE 3: I-485 ADJUSTMENT OF STATUS
 You have an approved I-140

 Visa is available (your turn in line is up): Visa Bulletin

 Medical Exam

 No Admissibility issues

 Need to show you are in legal status
 If fallen out of status, must consular process abroad.

4 categories to skip Labor Certification
1. Extraordinary Ability: very top of your field in the world.
 Regulations list 10 examples, must meet at least 3
 Sustained national/international acclaim

2. Outstanding Researcher:
 Need to prove 2 out of 7 criteria
 Need to prove you are outstanding (impact in your field)

3. National Interest Waiver: reserved for those doing work in the interest of the US
 No employer or labor certification needed
 3 criteria
 Must be working in an area of substantial intrinsic value to the US

 The impact of the work is national in scope as opposed to local in scope

 You have already made an impact in your field that is greater than your peers

 when they balance the purpose of PERM versus what you bring, do you win?

SKIP LABOR CERTIFICATION
4. Multinational Manager or Executive
 You worked outside the US for 1 year out of the last 3 years for a company
 the foreign company has a qualifying relationship with a Company in US:
 Parent-Child: one owns majority of other;
 Branch
 Affiliate: joint venture, one person owns majority of both

EMPLOYER SPONSORED GREEN CARD
 Don’thave to be sponsored for the job that you are in – employer can say
they have the intention to put you in the position when you get the green
card. Could be 4-5 years away.

 Usea company you don’t work for: You work for Company A; Company B
can sponsor you (maybe you have a good friend) – at the end of the day, if
intention changes, you get green card and they don’t have to hire you.

 EmployerMUST pay for the process. It’s expensive! Can’t be reimbursed
under the table. Highly illegal!

QUESTIONS?????
MOMAL IQBAL
Miqbal@rroyselaw.com
Office: (415) 421-9700
Direct: (213) 290-4529

www.rroyselaw.com
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Immigration Basics For Startups

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