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Immigration Options for Foreign Investors: Relief During Troubling Economic Times
By: Russell Lawson. This was posted Wednesday, May 20th, 2009
Loading ...During these challenging economic times, how can the United States benefit from immigrant entrepreneurs? Immigrant-operated small businesses accounted for $19.5 billion in sales and 72,839 jobs by the end of the 1990s (See A. Saxenian, “Brain Circulation: How High-Skill Immigration Makes Everyone Better Off,” 20 Brookings Rev. No. 1, 28-31, Winter 2002). The number of immigrant self-employed business owners increased by 384,000 from 2000 to 2003 (See R. Fairlie, “Self-Employed Business Ownership Rates in the United Statesw: 1979-2003,” 6 SBA Office of Advocacy, Dec. 2004). This influx of immigrant entrepreneurs not only brings capital investments to the United States but leads to job creation in the primary company and associated suppliers and service providers.
Immigrant entrepreneurs have several immigration options in the United States. Temporary work visas are often used by investors and entrepreneurs. Most often, the following temporary (nonimmigrant) visas are utilized:
1. L-1A Multinational Executive/Manager Intracompany Transferee & L-1B Specialized Knowledge Intracompany Transferee
The L-1 intracompany transferee visas are available to employees who have been employed by a multi-national company abroad in an executive, managerial, or specialized knowledge position. The L-1 visa is also available to foreign entrepreneurs and investors who have been employed by a multinational company abroad and seek to open new business operations in the United States.
Pros &endash; The L-1 visas allows the foreign national to work in the United States for 5-7 years depending on the specific L category. There are also several advantageous paths to Permanent Residency from L-1 status.
Cons &endash; The eligibility requirements are quite strict, both for the multinational company and the foreign national employee.
2. E-2 Treaty Investors
The E-2 Treat Investor visa is available investors from countries that have commerce and navigation treaties or bi-lateral investment treaties with the United States who have invested substantial capital in a U.S. company.
Pros &endash; The E-2 visa is issued for a 2 year period with unlimited extensions available.
Cons &endash; The E-2 visa usually requires a greater investment of capital in the U.S. entity.
Once in one of the aforementioned nonimmigrant visa categories, the investor and other foreign nationals have several options for attaining “permanent residency” (also known as “green card”). However, a special “straight to permanent residency” option is available to certain immigrant investors. Permanent resident status based on EB-5 eligibility is available to investors, either alone or coming with their spouse and unmarried children. Eligible aliens are those who have invested &endash; or are actively in the process of investing &endash; the required amount of capital into a new commercial enterprise that they have established. They must further demonstrate that this investment will benefit the United States economy and create the requisite number of full-time jobs for qualified persons within the United States.
Pros &endash; The EB-5 immigrant visa is a greatly expedited path to permanent residency by greatly decreasing the average 3-6 year wait in other employment-based permanent residency strategies.
Cons &endash; The EB-5 requires an investment of $1,000,000 (or $500,000 in specific geographic locations) and the creation of create full-time employment for not fewer than 10 qualified individuals. However, if the capital investment is in a “troubled business,” which is a business that has been in existence for at least two years and that has lost 20 percent of its net worth over the past 12 to 24 months, the investor must maintain the number of existing employees at no less than the pre-investment level for a period of at least two years.
Foreign investors are an incredible asset during these troubling economic times. They bring with them capital investments, an understanding of international business, and an entrepreneurial spirit so vital to the make-up of small businesses in the United States. In times such as these, foreign investors might also save jobs and create jobs for many U.S. citizens.
