Camera di Commercio Industria Artigianto e Agricoltura di Torino

U.S. Business Forum

Business Immigration Overview

November 16, 2015

Clara DeMatteis Mager

James C. BrunoButzel Long

a Professional Corporation

150 West Jefferson Avenue, Suite 100

Detroit, Michigan 48226

313-225-7000

mager@butzel.com

Bruno@ butzel.com

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Labor Issues on Transfers

• Maintain Employment Duties in Italy• Maintain an Employment Agreement with current Employer

• Execute Secondment Agreement between Entities

• Execute Employment Agreement with U.S. Entity

Local CountryEmployment Agreement

Secondment AgreementA. Establishes relationship between

companies.B. Responsibility and control of employee

(important for Permanent Establishment issue).

C. Intercompany payment liability.D. Responsibility for withholding and

paying taxes.

Expatriate Structures

Secondment Agreement

Host Company and Home Company Employment Agreements

A.Identity of “Employer” and reporting relationship – there will be by law a dual employment relationship.B.Dates of employment – match Visa dates.C.Title and duties – match Visa.D.Restrict Powers in home country on behalf of foreign entity top avoid P.E.E.Compensation – salary and bonus (based on U.S., home country, worldwide, or other performance metrics). (Where paid?)F.Benefits – list available on request.

Home Country Employment Agreement

Home Company Employee

U.S. Company

Contractual Relationships

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Immigration Issues in M&A

1. Existing visas or pending visa applications can be affected

a) Transfer petitions prior to closing?

b) Amend application?

c) Beneficiary no longer eligible.

2. Show all current employees authorized to work.

a) Due Diligence on current employees (Forms I-9).

b) Possibly new paper work required as of closing.

3. Must Determine

a) Structure of the deal.

b) Timing of closing affecting pending applications.

c) Risks of assuming liability for past immigration violation’s.

4. Including Immigration matters in the Due Diligence Requests and as representations to Stock of Asset Purchase Agreements

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Background Information

Basic Division of U.S. Business Immigration Law:

• Nonimmigrant Status - All temporary classifications

(Visitors for business/tourism (B-1/B-2), students/trainees (F-1, J-1, H-3), and work authorized statuses (E-1/E-2, H-1B, L-1A/L-1B, O-1, TN))

• Immigrant Status - Lawful Permanent Resident (“LPR”), also referred to as Green Card Holder

- Employment-Based Immigration

(Multinational Executive/Manager (EB-1), Outstanding Researcher (EB-1), PERM – Alien Labor Certification (EB-2 and EB-3))

• U.S. Citizenship – Also referred to as Naturalization

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Background Information

Common Terms:• Visa

– Issued by DOS / U.S. Embassy or Consulate abroad

– Generally requires sponsorship by employer

– Time period in U.S. is limited

– Generally requires intent to return abroad

Note: The Visa does not control FN’s status in U.S.; allows for application for entry to U.S. and supports admission to specific nonimmigrant classification upon arrival

*A Visa may expire, but FN may still be “legal” in U.S.

*If Visa expires and international travel required, FN will need new Visa to return to U.S. (with limited exceptions – e.g. Automatic Visa Revalidation)

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Background Information

Common Terms:

• I-94 “Card”

– Previously Issued by U.S. Customs and Border Protection (“CBP”) at U.S. Port of Entry (“POE”), via land, air or sea travel

– Generally now available after entry on-line and printable

– Generally correlates with Visa expiration (depends on type)

– Time period in U.S. is limited on I-94 record

– Expiration date controls FN’s authorized stay in the U.S.

Note: The expiration date of the I-94 can be restricted to the earlier expiration of FN’s passport – if passport close to expiring, recommend renewal/extension prior to arrival in U.S.

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Common Nonimmigrant Business Classifications

• B-1 Visitor for Business

• TN Trade NAFTA

• L-1 Intracompany Transferees

• H-1B Workers in Specialty Occupations

• H-2 Temporary Workers

• H-3 Temporary Trainees

• E-1 Treaty Trader

• E-2 Treaty Investor

• O Aliens of Extraordinary Ability in Science, Arts, Education, Business or Athletics

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B-1 Visitor for Business

• Nonimmigrant intent• Cannot abandon foreign residence• Specific plans and duration in U.S.• Adequate funds for duration of stay in U.S.• Documentation of ties to home country• Activities must qualify under B-1 criteria for “business purpose” other business visas permit productive labor

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B-1 Visitor for Business

• Business purposes examples– Business meetings, negotiate contracts, litigation

– Conferences, conventions, seminars

– Soliciting orders

– Observe U.S. company/culture

– Exposure to U.S. business/English language

– No productive labor (including substantial management) is permitted

– Possible B-1 can be issued in lieu (substitute) of H-1B and other non-immigrant business visas if all compensation is from abroad and all other requirements of the other visa satisfied. Limited to six months. Must be noted on visa. Fraud issues.

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B-1 Visitor for Business

Note:

• If foreign national is eligible for Visa waiver program or already has valid B-1/B-2 visa, then an “invitation letter” from U.S. company articulating reason for trip, duration and other items required by B-1 business status can be drafted for foreign national to present at Port of Entry to support entry

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U.S. Visa Waiver Program

• There are 38 countries (e.g., Italy) that participate in the Visa Waiver Program (VWP)

• WB (similar to B-1) or WT (similar to B-2) Status

• All visitors traveling to the U.S. under the VWP, must have a machine-readable passport or e-passport

• ESTA Registration Required

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B-1/B2 Visa WaiverCurrently, 38 countries participate in the Visa Waiver Program,

as shown below:

ESTA (Electronic System for Travel Authorization) registration required prior to travel.

Andorra United Kingdom New Zealand

Australia Hungary Norway

Austria Iceland Portugal

Belgium Ireland San Marino

Brunei Italy Singapore

Czech Republic Japan Slovakia

Chile Latvia Slovenia

Denmark Liechtenstein South Korea

Estonia Lithuania Spain

Finland Luxembourg Sweden

Switzerland

France Malta Taiwan

Germany Monaco U.K. (Excluding Territories)

Greece Netherlands

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L-1 Nonimmigrant Visas

• Qualifying Organization (Enterprise Entity) – Type of entity irrelevant

– Parent, affiliate, branch, or subsidiary of U.S. petitioner

– Doing business as an employer in the U.S. and abroad for the duration of the foreign national’s stay in U.S.

– Joint Ventures – less than 50% but control may qualify for entity JV

– New U.S. company - for less than one year - heavily scrutinized by USCIS; 5 Year Business Plan, one year visa

– Employment with an acquired Enterprise Entity is counted

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L-1 Nonimmigrant Visas

• Employees who qualify:– Executives (L-1A)– Managers (L-1A) (of employees or “function”) but not “front line” of non-professionals

– Employees with Specialized Knowledge of Employer (L-1B) (currently difficult)

• Conflicting court decisions• Generally more than 50% of time as executive or manager• Employee must have been continuously employed abroad full time for

one year within last three years prior to entry to U.S. Temporary travel to the U.S. during the one year does not interrupt the one year

• Employment with U.S. does not need to be compensated (e.g., Board Member) and can be part time

• Restrictions on “job shop” L-1B assignments (e.g., engineers working at customer locations not primarily under employer control and supervision

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L-1 Nonimmigrant Visas

• Validity:– L-1A – maximum stay is 7 years– L-1B – maximum stay is 5 years– L-1 visas are generally issued for 5 year period– Extensions of stay are granted in two year increments

– L-2 spouse can obtain permission to work /EAD

• Blanket L authorization if $25,000,000 in U.S. sales after one year

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Overcoming Common Obstacles

• L-1 Intracompany Transferee

– L-1A Multinational Manager:

• Burden of proof requires employer to establish proposed positionin U.S. will be performed in a managerial or executive capacity.

• Can be a “traditional” or “functional” manager position:

– Traditional manager position requires employer to provide evidence the employee will directly supervise and control the work of supervisory or managerial employees or members of a profession (e.g., architects, engineers, lawyers).

» Can qualify as “professionals” if meets definition used for H-1B purposes, i.e., if employees supervised have bachelor’s degrees or equivalent, and their positions require the degree awarded.

– Functional manager position requires employer to provide evidence the employee will manage an essential function of a department, company or organization as a whole (e.g., IT, accounting, legal).

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Overcoming Common Obstacles

• L-1 Intracompany Transferee (continued)– L-1B Specialized Knowledge:

• Burden of proof requires employer to establish the employee possesses specialized knowledge under a totality of the circumstances test.

• Documentation to establish the employee possesses specialized knowledge may include:

– Training records or certificates– Performance reviews or appraisals– Curricula or training manuals– Knowledge of company-specific product, processes or procedures

• Often difficult to meet burden of proof.

– Preparing a business plan for a new office L-1:• Not required, but would be helpful to provide.• Business plan should include a timetable for each proposed action for the first year of business.

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A Recent Request for Evidence forL-1(B) on Petition Filed by other Counsel

• Inadequate proof of relationship between entities

• Inadequate proof in layman's terms duties request “special knowledge” of petitioners product, reviews, etc. [or advanced level of knowledge]

• Inadequate proof beneficiary has the required knowledge

• Inadequate proof of one year employment abroad

• Inadequate proof of qualification or use of special or advanced knowledge abroad

• Inadequate proof of management or specialized knowledge position abroad

• Inadequate proof of control by U.S. petitioner of employee at customer’s location

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E Nonimmigrant Visas

• E-1/E-2: Treaty Trader/Investor • Common Features:

– Treaty /Agreement exists btw U.S. & foreign country (includes Italy)

– At least 50% ownership and control nationality requirement except publically held

• Establish components of Trade (E-1) or Investment (E-2)

• Cannot be a marginal enterprise (more than support of owner)

• Requires 5 year business plan

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E Nonimmigrant Visas

• Benefits of E-Visa

– Application may be made at consulate

– Prior USCIS authorization not necessary and not binding on consulate

– Employee not required to have prior experience with treaty company

– Visa issued for up to five years, renewable indefinitely, Admissions in 2-year increments

– Extensions can be granted upon re-entry

– E-2 Spouse is permitted to work/EAD

– E-2 Children can attend school

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E-1/E-2 Treaty Trader/Investor

• E-1 Treaty Trader to support existing international trade of goods and services, 50% or more between the two countries

• E-2 Investment or process of investment of “at risk” of “substantial” investment (adequate to fund cash flow requirements)

• Foreign National Employee– Investor, supervisors, executive, possesses skills essential to the efficient operations of the enterprise, professional in a specialty occupation

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Overcoming Common Obstacles

• E-2 Treaty Investor– Nationality requirement for U.S. entities:

• Privately held entities:– Determined by nationality of individual owners of entity.

– Nationals of treaty country must own at least 50% (with control) of the U.S. entity.

» If an entity in turn owns another entity, nationality must be traced to point of establishing at least 50% ownership with respect to the parent entity.

» Evidence should include passport ID pages and entity ownership documents.

• Publicly traded entities:– Country of formation is irrelevant.

– An entity where shares or interests are sold exclusively on a stock exchange is presumed to have nationality in the country where the exchange is located.

» Burden of proof requires U.S. entity to provide “best available evidence” to overcome this presumption where there is more than one stock exchange or a majority is held privately.

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Overcoming Common Obstacles

• E-2 Treaty Investor (continued)– Essential skills requirement for foreign nationals:

• Burden of proof requires U.S. employer to show:1) The employee possess specialized skills; and 2) Such skills are needed by the U.S. entity.

• To assess the foreign national’s essentiality and specialized skills, U.S. employer should consider:1) Degree of proven expertise of the foreign national in the area of specialization;

2) The uniqueness of the specific skills; 3) The function of the job to which the alien is destined; and 4) The salary such special expertise can command.

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Overcoming Common Obstacles

• E-2 Treaty Investor (continued)– Preparing a 5 year business plan:

• Requirements are consulate-specific, and not all consulates require a business plan.

• Check consulate website for guidance:– U.S. Consulate in Rome website:

» Not listed as a required exhibit: “Do not include brochures, photographs, or business plans that contribute littleor nothing to the value of your case.”

– U.S. Consulate in Frankfurt website: » Listed as a required exhibit: “Business plan including a five-year forecast in a Profit/Loss format (one page), tax returns for the past 2 years (if an existing company) and a year-to-date profit/loss statement. The plan must verify the capacity of the enterprise to realize a profit within a maximum of five years.”

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H-1B Nonimmigrant Status

• Specialty Occupation• Position requires minimum of Bachelor’s Degree or equivalent

• Foreign national has (relevant) Bachelor’s Degree or equivalent

• 6 Years total period of stay (with exceptions)• H-4 Spouse may be permitted to work/EAD

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H-1B Nonimmigrant Status

• H-1B Quota or Cap is exhausted for Fiscal Year 2016 (October 1, 2015 to September 30, 2016)

• Fiscal Year 2017 (October 1, 2016 to September 30, 2017) 65,000 new H-1Bs available for foreign nationals

• 65,000 number does not include 20,000 H-1Bs for foreign nationals with Master’s Degrees or higher from U.S. institutions (“Masters Cap”)

• H-1B Petitions can be filed on April 1, 2016 for Fiscal Year 2017 beginning October 1, 2016

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Overcoming Common Obstacles

• H-1B Specialty Occupation– Position offered to the employee must qualify as a “specialty occupation” position.

• Burden of proof requires employer to establish by a preponderance of the evidence that the position offered requires: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 foreign equivalent) as a minimum for entry into the occupation.

– To qualify as a specialty occupation, the position must require a precise and specific course of study, which relates directly and closely to the position in question.

– Experience may substitute and/or supplement formal education requirement to meet burden of proof.

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Nonimmigrant Visa Application

• Home country issuance– First visa usually obtained at U.S. Consulate in home country

– U.S. Consulate procedures differ

– Appointment and personal appearance required

• Third country issuance– Only certain nationals eligible

– Mostly in Canada or Mexico

– A visa may be required to enter Mexico or Canada (or the 3rd country)

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Immigrant Classifications

• Three routes to the green card– Employment– Family– Government

Note: If possibility exists for family-based LPR process (i.e., marriage to U.S. Citizen), generally a quicker & smoother process than employment-based

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1. Government 2. Family 3. Employment

Immigrant Visa Immigrant Visa Immigrant Visa

*Diversity Visa (DV) *Form I-130 (Filed with USCIS) * Labor Certification

*Asylum *Establish Familial Relationship, *Form I-140 (Filed with USCIS)

(e.g., spouse, child, parent, sibling) *Establish

Employer/Employee

Relationship

* Employer can pay

employee’s wages

* Employee Qualifies

for position

Green Card Application

- Adjustment with USCIS if in U.S.

- Consular processing with Consulate if outside U.S.

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Employment-Based Green Cards

• Three steps generally required:

– Alien Labor Certification (“PERM”) * Employer files application with DOL, after recruiting, to show no U.S. workers able, willing, available and qualified for position offered to foreign national

– I-140 Immigrant Petition for Alien Worker* Employer Files with USCIS based on DOL certification

– Adjustment of Status or Consular Processing of Immigrant Visa (“Green Card”)

* Foreign National files with USCIS based on I-140 petition approval, or concurrently with employer’s I-140 petition

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Employment-Based Green Cards

• Important factors to determine processing time for green card:

– Nationality of foreign national– Employment-Based Preference– Priority date

• Date Labor Certification is filed or• Date I-140 Immigrant Petition is filed

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Employment-Based Green Cards

• Important factors to determine processing time for green card:

– Nonimmigrant status approaching end of maximum period of stay

– FN has dependant children who may turn 21 before approval (“Age-Out”)

– General Long term plans for FNNote: Plan at least two years ahead to avoid losing work authorization for employee

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Employment-Based Green Cards

• Five Preferences listed in the monthly Department of State (“DOS”) Visa Bulletin

STATUS ITALY INDIA

First Preference (EB-1) Current Current

Second Preference (EB-2)Current 1/1/12

Third Preference (EB-3) Current 10/15/11

Fourth Preference (EB-4) Current

Fifth Preference (EB-5) Current

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First Preference (EB-1)

• Persons of extraordinary ability in the sciences, arts, education, business or athletics

• Outstanding professors and researchers• Multi-national executives and managers* No Labor Certification required for EB-1

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Extraordinary Ability (EB-1)

• Evidence of a one-time achievement or major award OR

• Evidence of at least three of the following criteria:– Nationally or internationally recognized prizes/awards – Memberships in associations requiring outstanding achievement in field

– Published material about foreign national in professional or major trade publication or other media

– Participation as judge of the work of others in the field– Original contributions of major significance in field– Authorship of scholarly articles in professional or major trade publications

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Extraordinary Ability (EB-1)

Extraordinary Ability criteria continued…

– Artistic exhibitions or showcases – Performance of a leading or critical role for organizations or establishments with distinguished reputation

– High salary or other high remuneration for services in relation to others in the field

– Commercial success in the performing arts– Other comparable evidence

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First Preference (EB-1)

• Persons of extraordinary ability in the sciences, arts, education, business or athletics

• Outstanding professors and researchers• Multi-national executives and managers* No Labor Certification required for EB-1

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Multi National Managers and Executives (EB-1)

• Qualifying relationship between U.S. and foreign employer

• Foreign national employed in a managerial or executive capacity abroad one out of the three years prior to transfer

• Position in U.S. is managerial or executive

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Multi National Managers and Executives (EB-1)

Executive criteria:

• Directs the management of the organization or major component or function;

• Establishes goals and policies;• Exercises wide latitude in discretionary decision making; and

• Receives only general supervision or direction from higher level executives, board of directors or shareholders

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Second Preference (EB-2)

• Advanced degrees (PhD, Master’s Degree or Bachelor’s Degree plus five years of post baccalaureate progressively responsible experience)

• Aliens of Exceptional Ability* Labor Certification required

* National Interest Waiver is possible

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Third Preference (EB-3)

• Professional Workers: Position requires U.S. Bachelor’s Degree or foreign degree equivalent

• Skilled Workers: Position requires at least two years of training or experience

• Other Workers: Position requires less than two years of training or experience

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PERM Labor Certification

• Position requirements determine if position qualifies for EB-2 or EB-3

– Education: Bachelor’s, Master’s, PhD Degree– Number of years of experience– Employer’s specific skills and/or experience requirements

• Job Zone• Specific Vocation Preparation (SVP)

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Immigration Not Easy• Every detail of the Application must be supported. See Petition Table of Contents.

• The law is complex. The “Cliff Notes” or guida allo studio is over 2,000 pages of fine print.

• Causes for delay is preparation of application package:

– Tracing capital contribution

– Business Plan – Get help if you need

– Changes in business planning

• A Request for Evidence (“RFE”) is sometimes issued by government instead of a denial

• The government officials reviewing a matter may be new or the petitioner may have done a poor job

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Table of Contents for an E Visa Petition(not a new business)

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Immigration Issues in U.S. Expansion by Acquisition

• Key Employees may have visas or be beneficiaries of U.S. visas

• Changes in beneficiary employment (Asset Purchase Agreement) can affect visas

• Changes in ownership (Stock Purchase Agreement) can affect visas

• Alternative to a current visa to a new visa status (e.g., from L-1A to E-2) can have long rate effects

• There may be undisclosed immigration violations (potential fines)

• Perform due diligence

• Obtain a representation and warranty in the APA or SPA

• Prepare and file notice amendments and new petitions at or before closing

Questions?

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