August 23, 2018

Immigration and Employment Considerations for Startups and New U.S. Businesses

Whether launching an innovative startup or opening a new office in the U.S. for an established international business, employers should be aware of important immigration and compliance considerations.

This article provides an overview of several employment and immigration compliance topics affecting new businesses in the U.S.

New Business Considerations

Every day, startup businesses are launched in the U.S., generating hundreds of millions in revenue. As of the end of 2016, 6.1 percent of job seekers started their own business.

For entrepreneurs who establish brand-new businesses in the U.S., many considerations compete for attention. Two areas to highlight here are hiring and employment-related compliance.

Employment-Related Compliance Considerations for New U.S. Businesses

Managing U.S. Employment Practices

All startup companies should consider appropriate ways to protect confidential information and intellectual property, to prevent unfair competition, and to clarify the terms and conditions for employing workers. Therefore, it is prudent for any employer to formally review the ways in which it communicates to applicants, to new hires and to employees to make sure that the communications are appropriate and consistent. This section will focus on how employers can proactively mitigate risk to their enterprise and prevent mistakes.

Employment Contracts

In employment relationships, as in all business relationships, a clear understanding of each party’s obligations and responsibilities is valuable. Startup businesses should strongly consider having written contracts addressing at least non-disclosure of confidential information and assignment of intellectual property rights with each employee. In the United States, generally employment is “at-will,” meaning that an employee may be discharged at any time with or without notice for any reason or for no reason and, similarly, an employee may terminate employment at any time with or without notice for any reason or for no reason. An “employment contract” need not change the at-will nature of employment; it is possible and appropriate to document an employment relationship with a written contract while maintaining the at-will status of the employment. A contract can help avoid misunderstanding and disputes with employees later on, protect the company’s confidential information and intellectual property, and prohibit unfair competition during and after the employment relationship.

Employment contracts do not need to be formal or intimidating documents. For example, an employer could present the terms of employment in the form of an offer letter and require the employee to accept by signing and returning. Alternatively, the terms of employment may be documented by either a short, simple contract of employment, or in a longer agreement. The appropriate form(s) of agreement will depend on the needs of the employer and sophistication of the employee. For example, an executive employment agreement may include detailed terms addressing duties, compensation, benefits, different categories of employment separation (such as termination with or without “cause”), severance, various restrictive covenants (non-solicitation of employees, non-solicitation of customers and non-competition) and other terms, whereas an agreement for a lower level may address only non-disclosure of confidential information (and perhaps assignment of intellectual property, if appropriate).

Written employment agreements addressing non-disclosure of confidential information and assignment of intellectual property are particularly important when an employer is hiring employees to engage in research and development or to write computer code or create other intellectual property. In such cases, the employer will want appropriate agreements to make sure that it owns the employee’s work product and not the other way around.

Confidentiality, Non-Solicitation and Non-Competition Agreements

Even absent a written agreement, employees have certain obligations to be loyal and to protect their employer’s confidential information and trade secrets. Some of these obligations – such as not misappropriating trade secrets – continue to some extent even after the employment ends. The remedies that are available to an employer and the employer’s ability to enforce obligations are substantially enhanced if the employer has entered into written agreements with its employees explaining exactly what the employer considers to be confidential information and spelling out the employees’ obligations and the employer’s remedies, including a contractual right to recover attorneys’ fees. In addition, companies should think seriously about having an employee sign a non-solicitation and non-competition agreement if the employee’s departure to work for a competitor could be damaging to its business, or the employer is otherwise concerned about the employee’s ability to solicit away employees or customers after the employment relationship ends.

The enforceability of non-solicitation and non-competition agreements is determined by state law and can vary greatly. Similarly, certain state laws require the inclusion of specific language in employment contracts that address assignment of intellectual property. Therefore, employers should consult with legal counsel before entering into agreements with employees addressing non-disclosure of confidential information, assignment of intellectual property or restrictive covenants.

Anti-Discrimination and Disability Accommodation Laws

Startup companies should also be aware of certain U.S. anti-discrimination laws, especially when it comes to terminating U.S. employees. Although at-will employment status means that the employer can discharge an individual for any reason or for no reason, there are limitations to the at-will rule. An employer cannot terminate an employee for an unlawful reason. The two most commonly alleged unlawful reasons for termination are discrimination (e.g., race, sex, age and disability) and retaliation.

There are still misconceptions about what the laws barring age discrimination protect. It is a good rule of thumb to assume that an employer cannot make any decision based on a person’s age, regardless of whether that person is 20, 40, 65 or 80 years old. Any time that an employer wants to make an employment decision based on someone’s age, that is a good time to seek legal counsel to see if one of the very few exceptions that may make that possible would apply.

Similarly, disability is an area which causes some confusion. The rule of thumb is that it is unlawful to discriminate against anyone because they are disabled. Moreover, there may also be an obligation to “reasonably accommodate” individuals with disabilities. If an individual with a disability is unable to perform a job because of the disability, but would be able to perform the essential functions of the job with some accommodation, the employer may be obligated to provide that accommodation.

Employers cannot take any adverse action against an employee because the employee engaged in protected behavior. Protected behavior could include, for example, complaining of discrimination or alleging that the company has failed to comply with some law. Retaliation claims are increasingly common and are among the most difficult claims to defend. Whenever an employer is looking to discipline or discharge an employee who has engaged in some kind of possibly protected conduct, it should contact legal counsel before moving forward.

When an employer takes appropriate steps to protect the company against competition from key employees, has appropriate procedures in place for explaining to new hires the terms and conditions of their employment, and has managers who understand at least the basics of the relevant federal and state anti-discrimination laws, then the company is less likely to get into trouble with regard to its personnel practices. If a problem arises, the employer will be in a much more defensible position and be more likely to obtain a favorable resolution.

As is the case with many employment-related laws, states and cities may have anti-discrimination and disability accommodation laws that differ from federal laws. Companies must be mindful of these state and local laws and ensure compliance with all such laws.

Employee Handbooks

Startup companies should develop an employee handbook and distribute this handbook to each employee upon commencement of employment, obtaining an acknowledgement of receipt from each employee. An employee handbook sets forth company policies and procedures and reflects the company’s culture and goals. Having an employee handbook in place provides a good roadmap for dealing with common workplace problems. If an employer is accused of discrimination, having a handbook in place with appropriate policies substantially enhances its defense. An employee handbook also can be used to inform employees about certain rights they have under state and local laws, such as paid sick leave or other leave-related rights that may apply to even very small employers. Startup companies should consult with legal counsel to develop the handbook and ensure the handbook includes the appropriate provisions, considering the appropriate state and local ordinances in addition to federal law.

Employees and Independent Contractors

When a business retains someone as an employee, it has a certain amount of responsibility for that individual’s conduct, it is required to provide the employee with workers’ compensation, it must deduct pay for taxes, it must comply with employment-related laws, and it may be required to provide certain benefits. On the other hand, when a company retains an independent contractor, it is not obligated to provide that person with workers’ compensation, does not have tax withholding obligations, and generally is not required to comply with employment-related laws or provide benefits. For these and other reasons, startup businesses often prefer to use independent contractors when they can, but in doing so may misclassify a worker as an independent contractor.

There is no single clear objective test to determine whether someone is an employee or an independent contractor. The distinction depends upon multiple factors, including, among other things, the level of supervision the business exercises over the individual and what the individual does with his or her time when not providing services to the business. It is very important to get the classification right. If a business improperly classifies someone as an independent contractor when they should have been classified as an employee, then the business may have an exposure to that individual for unpaid benefits and overtime pay as well as an exposure to the government for unpaid taxes. The company also may be exposed to claims for workers’ compensation and unemployment insurance, claims that would not apply if the worker was properly classified as an independent contractor. Startups obviously should want to avoid these liabilities under any circumstances, but these problems can be particularly significant if uncovered during due diligence at the sale of the business. Therefore, taking care to properly classify individuals as independent contractors or employees is very important.

A similar type of issue arises with regard to classifying employees as exempt or non-exempt for purposes of federal and state wage and hour laws. Employers will sometimes assume that because they pay an employee on a salaried basis, that the employee is exempt and not entitled to overtime pay. In fact, exempt status typically depends on satisfying both a “salary basis test” (paying the employee the same salary each week – a salary that meets the minimum amount required by federal and applicable state law – regardless of how many hours the employee works) and at least one applicable “duties test.” Therefore, paying someone a salary alone does not make the employee exempt from overtime and other protections under applicable wage and hour laws. In addition, if a business has failed to keep required records regarding hours worked by employees who should have been classified as non-exempt because it mistakenly thought that its employees were exempt, then this can expose the company to claims by the employees and federal and state regulatory agencies. Moreover, when an employer fails to pay required overtime, it is very hard to address the problem without employees realizing that there was an error and perhaps seeking additional damages, including statutory penalties and attorneys’ fees. For these and other reasons, it is extremely important that startups carefully consider any classification of workers as independent contractors and appropriately classify employees as exempt or non-exempt, complying with the legal requirements applicable to each category of employee.

Hiring-Related Compliance Considerations for New U.S. Businesses

From a business owner’s perspective, hiring the most qualified employees is critical to growing the business and sustaining that growth. During interviews, employers may be eager to identify key skills and attributes to ascertain “fit.” Interviewing, though, can present a minefield of employment discrimination challenges. In addition to questions that run afoul of various federal and state anti-discrimination provisions, or questions that may violate the growing number of state and local laws prohibiting asking applicants about their criminal or pay histories, questions that focus on nationality or immigration status are similarly fraught.

According to the Department of Justice’s Immigrant and Employee Rights section, employers may ask the following two questions on job applications and during interviews (and should ask these questions uniformly of all applicants, regardless of citizenship):

  1. Are you legally authorized to work in the United States?
  2. Will you now or in the future require sponsorship for employment visa status (e.g., H-1B visa status)?

Work authorization and immigration questions beyond these two questions run the risk of violating the anti-discrimination provisions of the Immigration and Nationality Act. Employers should seek experienced counsel if sponsorship or other work authorization issues arise during the course of an interview or other hiring conversation.

Work Authorization and I-9 Compliance

The two questions mentioned above are applicable in the interviewing context. Once an individual has accepted an offer of employment, their identity and U.S. work authorization must be verified. All U.S. employers have the obligation to confirm the work authorization and identity of all employees hired after November 6, 1986, by properly completing and retaining Form I-9. For startups and new businesses, it is important to note that even the founders must complete a Form I-9 (although board members, contractors and vendors do not). If an employee is working for pay in the U.S. and was hired after November 6, 1986, employers are required by law to retain a Form I-9 on file for that employee.

All U.S. employers have three primary obligations when completing a Form I-9 (for any employee, not just employees who are not U.S. citizens or permanent residents):

  1. Ensure that the I-9 is completed accurately and thoroughly, including ensuring that the employee properly completed Section 1.
  2. Ensure that the documents presented by the employee relate to that employee.
  3. Ensure that the documents look reasonably genuine on their face.

In many cases, the Form I-9 is a straightforward process. Employers often get tripped up, however, when employees have expiring work authorization documents or documents that have unique auto-extension rules (like some Employment Authorization Cards for beneficiaries of Temporary Protected Status (TPS), discussed below, and others). Failure to have an accurate, up-to-date and verified I-9 on file for every employee can get very costly in the event of an audit, even for a small new business. Since January 2018, ICE has issued more than 5,200 Notices of Inspection to employers to audit their I-9s.

New businesses, especially those with hourly employees or employees with temporary work authorization, can face steep fines for failure to follow I-9 regulations. Ensuring that the person responsible for completing I-9s in the new business has regular I-9 training and has access to outside counsel support is critical to I-9 compliance.

Organizations of all sizes need to be aware of the compliance issues affecting the entire workforce, particularly hourly workers. The government grants some employees work authorization because of their status as refugees or asylees or Temporary Protected Status (TPS) because their home countries have experienced a devastating natural disaster or civil war. Employers do not need to file applications or petitions in order for these individuals to work for them. It is often at the onboarding stage when employees are presenting identity documents in connection with Form I-9 that their status comes to light.

Recently, the Trump administration has announced that TPS will end for beneficiaries from El Salvador, Haiti, Nicaragua, Nepal, Honduras and Sudan. People who have been working with TPS work authorization for years in the U.S. will need to find another status to remain in the U.S. and continue working legally. For employers with many TPS beneficiaries (including many startup businesses), the end of TPS will have a noticeable impact on their workforces. Employers need to be vigilant regarding work authorization expiration dates for TPS beneficiaries.

Employers with new businesses may also need to consider employment-based immigration options for candidates who are not already U.S. workers. Although business immigration can get complicated, employers should not be deterred from exploring visa categories that require the business to sponsor workers for visas. Flexibility on sponsorship will allow employers to hire the best employees for the job, including new graduates from U.S. universities who are international students, researchers, professionals and others.

Relevant Employment-Based Visa Categories

H-1B – Specialty Occupation

The H-1B visa is one of the most common professional visas for businesses that need to hire professional, qualified non-U.S. citizen talent, and this visa program can be particularly intimidating to startups. The H-1B visa classification is for specialty occupations, which means occupations that require: (1) theoretical and practical application of a body of highly specialized knowledge; and, (2) attainment of a bachelor’s or higher degree in the specific specialty (or its equivalent) as a minimum requirement for entry into the occupation in the United States. The foreign national must meet the requirements for the position, including having a bachelor's degree or higher. The employer must also demonstrate that it is offering the prevailing wage for the occupation in the proposed labor market.

IT professionals, engineers, business analysts, financial specialists, executives and other professional positions typically qualify as “specialty occupations” under the H-1B rules. Often, startups are looking to hire new graduates. If a recent graduate was studying in the U.S. on a student visa, she will often have a period of work authorization after she graduates, but eventually, she will need to secure a longer-term work visa, and the H-1B is a popular choice for these employees.

One main challenge for employers seeking to apply for H-1B visas for their employees is timing. A limited number of visas are available each year, and because more H-1B petitions are filed than are available, employers must file petitions for new H-1B visas in the first five business days in April for an individual to begin working in H-1B status in October. In recent years, U.S. Citizenship and Immigration Services (USCIS) has imposed a random lottery on all the new petitions submitted in April as a method to fairly determine which petitions get reviewed since the agency receives many more submissions than there are spots available under the H-1B “cap.”

A key question for startup organizations considering hiring an employee who requires an H-1B visa is whether the organization is subject to the H-1B “cap.” The cap is a limit of 65,000 new H-1B visas per fiscal year and an additional 20,000 new H-1B visas per fiscal year for individuals who have graduated with a master’s degree or above from a U.S. university (for a total of 85,000). Some types of organizations and applicants are exempt from this cap, meaning they may submit new H-1B petitions at any time during the year, without concern for whether the H-1B cap limit has been reached. Cap-exempt categories include:

  1. Employees offered positions at institutions of higher education (i.e., colleges and universities).
  2. Employees offered positions at nonprofit entities related to or affiliated with institutions of higher education.
  3. Employees offered positions at nonprofit research organizations.
  4. Employees offered positions at governmental research organizations (which include state and local government research entities in addition to federal ones).

A startup organization or business that may be considered a nonprofit entity related to or affiliated with an institution of higher education needs to show either that it is connected to or associated with an institution of higher education through shared ownership or control by the same board or federation; that it is operated by an institution of higher education; that it is attached to an institution of higher education as a member, branch, cooperative or subsidiary; or that is has entered into a formal written affiliation agreement with an institution of higher education that establishes an active working relationship between the nonprofit entity and the institution of higher education for the purposes of research or education, and a fundamental activity of the nonprofit entity is to directly contribute to the research or education mission of the institution of higher education.

The definitions above have been updated and effective as of January 17, 2017, with the implementation of the skilled worker rule, which changed the definition of H-1B cap-exempt employers.

Note that if an individual is employed by both a cap-exempt entity (such as a university) and a cap-subject entity (such as a private company) at the same time, that individual is considered cap-exempt for purposes of a concurrent H-1B employment petition for the cap-subject entity. However, if the cap-subject entity wants the H-1B worker to work full time, an H-1B cap-subject petition must be filed under the lottery system so that it can be selected and then approved with an available H-1B cap number. Once approved, the full-time employment with the cap-subject entity can then start on October 1 as any other cap-subject case selected in the H-1B lottery.

Therefore, new entities or startups that have emerged from or are connected to institutes of higher education should seek to determine whether or not they may be considered cap-exempt per the options above. Those entities recognized as cap-exempt in prior years may need to submit additional information to prove ongoing eligibility for cap-exemption under the new regulations. The ability to submit H-1B petitions for professionals at any point during the fiscal year is a huge advantage in the hunt for talent and the ability to onboard employees in a timely fashion.

Scrutiny on all H-1B petitions – both cap-subject and cap-exempt – has increased dramatically in the past two years. Requests for Evidence (RFEs) and even denials have been issued by the immigration service at an unprecedented rate, causing processing delays and headaches for new businesses that require H-1B visas for professional staff.

TN – Mexican and Canadian Professionals

The TN is a visa option for Mexican and Canadian professionals in certain occupational categories that allows for U.S. work authorization on a fairly straightforward basis. There is no limit on the number of years one can work in TN status, and there are no limits on the number of new TNs in a given fiscal year.

To qualify in many of the professional TN categories, a Canadian or Mexican national must meet the following requirements:

  • Be a citizen of Mexico or Canada
  • Hold a related baccalaureate degree
  • Have a job offer from a U.S. employer

Canadian citizens may apply for TN status at the U.S.-Canada border or airport pre-clearance/pre-flight station and are admitted in TN status without the need for a visa stamp in their passport. Alternatively, a U.S. employer may choose to file a TN visa petition on behalf of a Canadian citizen who is outside the U.S. with USCIS. Once the petition is approved, the Canadian citizen will present the approval notice and supporting documentation at a designated U.S. port of entry or pre-clearance/pre-flight inspection.

Mexican nationals apply for a TN visa at a U.S. embassy or consulate in Mexico, where a TN visa stamp is issued. Once the TN visa is issued, application for admission to the U.S. in TN status is made at the port of entry.

The initial period of stay in the U.S. in TN status is up to three years. Individuals who wish to remain in the U.S. beyond the initial three-year period must either file for an extension of stay with USCIS or depart from the U.S. and reapply for TN status using the same application procedures outlined above. TN extensions of stay are usually granted in three-year increments.

O-1 – Extraordinary Ability

For companies launching innovative products or in R&D or otherwise highly specialized industry, some non-U.S. citizen candidates may qualify for an O-1 visa, which is reserved for individuals of “Extraordinary Ability or Achievement.” This visa requires evidence that the candidate meets three of the 10 categories below to be eligible:

  • Receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor
  • Membership in associations in the field for which classification is sought which require outstanding achievements, as judged by recognized national or international experts in the field
  • Published material in professional or major trade publications, newspapers or other major media about the beneficiary and the beneficiary’s work in the field for which classification is sought
  • Original scientific, scholarly, or business-related contributions of major significance in the field
  • Authorship of scholarly articles in professional journals or other major media in the field for which classification is sought
  • A high salary or other remuneration for services as evidenced by contracts or other reliable evidence
  • Participation on a panel, or individually, as a judge of the work of others in the same or in a field of specialization allied to that field for which classification is sought
  • Employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation

E-3 – Australian Professional

Australian citizen professionals who otherwise qualify under the H-1B standards described above may seek E-3 status. Although infrequently used, employers should keep the E-3 nonimmigrant visa category in mind for potential Australian hires.

B-1 Visa - Business Travel

The B-1 visa is available to foreign nationals for temporary business visits to the U.S. The B-1 visa is available for business travel for a specific and limited period of time. Permissible business activities include, but are not limited to consulting with business associates, participating in short-term training, attending professional conventions or conferences, or negotiating a contract. The maximum amount of time permitted in B-1 status on any one trip is one year. The B-1 visitor is prohibited from engaging in any hands-on, productive work. Individuals from certain countries may be eligible to enter the U.S. without a visa.

U.S. Businesses Established by Foreign Nationals

Much of what is discussed above applies to any new U.S. business. There are several additional visa considerations worth discussing for entrepreneurs who are not U.S. citizens, including the entrepreneur’s own work authorization, and whether the U.S. business is brand new or is a new U.S. office of an entity located abroad.

F-1 Students

It is not uncommon that international students studying in U.S. graduate schools want to launch new businesses during or just after graduation. Students in F-1 visa status must tread carefully – certain startup activities will lead to a student visa status violation, which will jeopardize future immigration options. The rules for maintaining F-1 status indicate that students are generally prohibited from “engaging in business” without prior authorization from the school related to Curricular Practical Training (CPT) or Optional Practical Training (OPT). If an F-1 student does not wish to use CPT or OPT to establish the business, he or she must have a defensible position as to actual day-to-day duties steering clear of productive work. Registering an LLC, negotiating leases, opening bank accounts, hiring employees, serving on the Board of Directors for the organization, and attending meetings with investors are generally permissible activities for F-1 visa holders. Note that the primary test is whether or not the F-1 student and the startup have an employer/employee relationship, even if the F-1 student takes no income from the business. Keeping clear records, documenting everything and seeking legal advice will mitigate the risk to some extent, but this endeavor in not completely risk free. The best option is to utilize CPT or OPT to run the business, ensuring clear communication with school authorities to ensure the work is approved.

In U.S. in Other Visa Categories

Similarly, individuals who are in the U.S. in visa categories other than F-1 (i.e., H-1B, TN, L-1, etc.) are not permitted to engage in employment outside of the terms of their visa-authorized employment. For an H-1B employee, the framework for permissible work activity is outlined in the H-1B petition prepared by the employer and filed with USCIS. H-1B visa holders may hold concurrent H-1B visas, however, so if the H-1B visa holder creates a business entity, he or she may be eligible for a second H-1B visa in order to work for the startup company. Note, however, that there are complex rules as to when this eligibility is created. Not all H-1B visa holders may self-petition for the startup H-1B, so consulting with an experienced immigration attorney is necessary to secure proper work authorization for starting a new business while already in the U.S. working for another employer in H-1B status.

For TN visa holders, depending on the nature of the startup and the nature of the individual’s work within that startup, it may be possible to petition for a concurrent TN with the startup entity as the employer. Self-employment is prohibited, but if the TN holder will be performing work for a U.S. company and is employed by the Canadian or Mexican company contracted to perform the work for the U.S. company, then it is possible. Again, there is no opportunity to self-petition for a TN, but with a proper management/board structure in place, a business owner could obtain TN status to perform work for that entity, being careful to comply with all relevant TN rules.

Outside of U.S., Looking to Establish Office in U.S.

As companies based in other countries expand markets and establish international sales and distribution, there may be a business need to establish an office in the U.S. In addition to the typical business registration requirements, foreign entities sending employees to the U.S. to set up or support the new office need appropriate visas and work authorization.

L-1 Visa – Intracompany Transfer

The L-1 visa category is intended for individuals working in either a specialized knowledge or managerial/executive capacity abroad for at least 12 months in the previous three years to come to the U.S. to work for an affiliated entity in either a specialized knowledge or managerial/executive capacity. The L-1 worker must have an employer-employee relationship with the U.S. entity and cannot be self-employed (but can be the sole shareholder of the U.S. entity). USCIS has issued specific guidance on how a new U.S. affiliate office that has not yet established proof of extensive business activity can employ an L-1 manager or executive, which includes establishing sufficient office space, proving the employee’s one-year employment abroad, and demonstrating that, within a year, the U.S. business could support an executive or managerial position.

There are no numerical limits on L-1 visas. For L-1A managers and executives, the total period of authorized employment is seven years (three years of initial validity plus two two-year extensions). For L-1B workers, that total period of authorized employment is five years (three years of initial validity plus one two-year extension). Note that a “new office” petition only gives one year of validity, at the end of which the U.S. business must exhibit sufficient evidence that it is active and operating.

E-1/E-2 – Treaty Trader/Investor

For certain countries that have valid treaties of commerce or navigation with the U.S. (a list of which is available here), a new U.S. entity can be established through preparing an E-1 or E-2 petition, submitting it to the relevant U.S. embassy, and securing a visa for an individual employee to establish a U.S. entity, develop U.S. business ties, and otherwise work in the U.S. The E-1/E-2 employee must be coming to the U.S. to engage in substantial trade, principally between the U.S. and the treaty country, or to develop and direct the operations of a U.S. enterprise in which the employee has invested a substantial amount of capital.

For an E-1 (Treaty Trader) visa, the employee must be a citizen of the treaty country, the company abroad must be majority owned by nationals of the treaty country, there must be substantial trade (the volume of which depends on the type of industry/business), and the employee must be an essential employee, employed as a supervisor/executive, or possess highly specialized skills necessary to the efficient operation of the U.S. entity.

For an E-2 (Treaty Investor) visa, the employee must be a citizen of the treaty country, the company abroad must be majority owned by nationals of the treaty country, the investment must be substantial, with investment funds committed and irrevocable and must be sufficient to ensure the successful operation of the enterprise. For startups, the business plan is a critical piece of the petition, and must forecast the expected growth of U.S. enterprise. The E-2 visa holder must have possession and control of the funds (i.e., loans are not allowed), and the enterprise must result in more income than just to provide a living to the employee and his/her family. Finally, the E-2 visa holder must be coming to the U.S. to develop and direct the enterprise or must be considered an essential employee, employed in a supervisory, executive or highly specialized skill capacity. Ordinary skilled and unskilled workers do not qualify.

Other Immigration Considerations for New U.S. Businesses

Finally, it is important for new businesses to stay on top of changing rules in international travel, including travel restrictions for individuals from certain countries, delays in visa issuance for employees obtaining new visas at embassies outside the U.S., and extreme vetting and scrutiny for all travelers into the U.S., regardless of citizenship. Business owners and employees are globally mobile, professionals travel to conferences around the world, and employees may have family members affected by changing immigration rules and policies.

The immigration landscape is shifting quickly, and new U.S. businesses – startups and U.S. field offices alike – need to be able to discern which shifts can impact their workforces to prepare, be compliant, and continue identifying, attracting and retaining highly qualified talent.

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