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- Series A Preferred Stock Investment in 7AC Technologies, Inc.
USCIS Announces Initiatives To Increase And Ease Foreign Investment And Entrepreneurship In The U.S.
August 18, 2011
On August 2, 2011, the U.S. Citizenship & Immigration Service (USCIS) announced a series of initiatives designed to make it easier for foreign investors to obtain temporary and permanent immigration status in the U.S. in an effort to attract foreign nationals to invest their capital here, stimulate economic activity, and increase jobs. A recent study showed that publicly-traded immigrant-founded, venture-backed companies in the U.S. exceed $500 billion and employ over 220,000 people in the U.S. And, the value and benefits of private immigrant-founded companies is substantial as well. Accordingly, to continue to grow foreign investment in the U.S., the USCIS has changed and clarified various immigration benefits, which are explained below.
H-1B TEMPORARY WORK VISA
The USCIS has clarified that a sole, foreign owner of a U.S. business can apply for an H-1B visa (even if there are no other employees) as long as s/he can show that s/he is a true employee of the U.S. company, meaning, in essence, that there is some other entity, Board or person who has control over the terms and conditions of the foreign national’s employment. Until recently, generally, foreign owners of start-ups or new U.S. offices could not petition for an H-1B visa where they were the sole owner because it was viewed as a self-petition, which is prohibited. But the USCIS has now clarified that these foreign nationals can petition for H-1B visas as long as they can show that some other “person”, like a Board of Directors, has the right to control them, such as the right to make decisions regarding hiring, firing, and paying them. The H-1B is generally a temporary work visa for foreign professionals and is the most common business visa. The petitioning process is relatively straight-forward and can be completed in a few weeks. So, opening the H-1B doors to foreign investors could be significant.
EB-2 GREENCARD CATEGORY
Generally, EB-2 greencards are for those who will fill a job requiring at least an advanced degree (and the foreign national has the relevant advanced degree) or those whose exceptional ability in the sciences, arts, or business will substantially benefit the national economy, cultural or educational interests, or welfare of the United States. Generally, EB-2’s cannot be self-employed. But the new USCIS initiative clarifies that foreign entrepreneurs can be self-employed and qualify for an exemption from the most burdensome part of the general greencard process, the PERM process (where extensive recruiting is done to show that there is no qualified US worker for the job), if they can show that their business endeavors will be in the interest of the U.S., by applying for a National Interest Waiver. Although there is no regulation defining what is in the “national interest,” caselaw has established that the foreign entrepreneur must show that its business serves the national interest to a substantially higher degree than others in the same field (ex: creating jobs in the field on a scale that would benefit the U.S.), that the business is in a field with substantial intrinsic merit (ex: highways, bridges, infrastructure, etc.), and that the benefit provided by the business is national in scope (ex: geographically spread-out job creation, local jobs creating national impact, etc.).
EB-5 GREENCARD CATEGORY
EB-5 is a greencard category which generally allows those who invest $1 million (or $500,000 in a rural area or a targeted employment area), either individually or through a Regional Center, to apply for a greencard, if they can show that their investment created 10 U.S. jobs. The USCIS will soon allow Premium Processing for some EB-5 petitions filed through Regional Centers, requiring them to be processed in 15 days instead of the typical 4-9 months. In addition, the USCIS will soon establish direct lines of communication between the USCIS adjudicators and the petitioners and will soon provide applicants with an opportunity for an interview before a USCIS panel of business experts, allowing petitioners to clarify often thick and complicated petitions and paperwork, thereby speeding up adjudications and increasing the success rate of petitions.
EB-1 MULTINATIONAL EXECUTIVES & MANAGER PETITIONS
The USCIS has expanded the scope of Premium Processing Service to allow multi-national managers and executives (often here in L-1 temporary work visa status) to apply for EB-1 greencards, requiring processing of the greencard petition in 15 days instead of the typical 6 months. Generally EB-1 multi-national managers and executives are those who worked abroad as a manager or executive for 1 year out of the last 3 years abroad for a parent, subsidiary, branch, or affiliate of the U.S. entity which now employs them as a manager or executive. This category can be used by foreign businesses and business owners to start U.S. businesses related to their foreign businesses, without any investment amount criteria as in the EB-5 greencard category, and without having to worry about showing that their business is in the national interest of the U.S., as in the National Interest Waiver for the EB-2 greencard category.
In sum, the USCIS initiatives are an effort to increase foreign entrepreneurship in the U.S. and to streamline and speed-up the process for them.
For additional information on this topic, please contact Berin S. Romagnolo.
This Alert is provided for information purposes only, and does not constitute legal advice. According to Mass. SJC Rule 3:07, this material may be considered advertising. ©2011 Posternak Blankstein & Lund LLP. All rights reserved.