IMMIGRATION OPTIONS FOR STARTUP COMPANIES

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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 Due to 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 Visa2. 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

U.S. EMPLOYER SPONSORPhase 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 Certification1. 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 CERTIFICATION4. 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’t have 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.

Use a 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.

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

QUESTIONS?????MOMAL IQBAL

Miqbal@rroyselaw.comOffice: (415) 421-9700Direct: (213) 290-4529

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