There is no arguing that new technology is changing the way that business operates throughout the world. The continued improvement of internet speed and capabilities combined with a growing number of tech-savvy entrepreneurs has led to an unprecedented number of start-up companies around the globe. Virtual companies are forming in every location that can be reached by an Ethernet cable.
As a result of this global transformation, there are now many entrepreneurs who wish to utilize their new business venture to obtain a United States work visa. And while the internet itself may not have any problems crossing borders, many of these entrepreneurs are learning that the establishment of a company, even if its services reach United States consumers, does not guarantee receipt of a US work visa. How can one own a business that sells to US consumers but not be able to work and live in the United States? The answer to this question lies in the United States Immigration Laws.
Firstly, in order to receive an H1B visa (which is the typical non-immigrant work visa), the visa applicant must have a job offer from a “United States” corporation. However, for the entrepreneur with a start-up company, the requirement of having a US corporation is quite easily overcome. In fact, a US corporation can be formed in a matter of days as the filing of incorporation documents and the obtainment of a US Tax Identification Number can all be accomplished in less than one week thanks to the internet and minimal incorporation requirements.
Once officially a “US corporation,” such corporation may then “sponsor” the visa applicant for a work visa by offering the applicant a job and submitting an H1B petition on behalf of the applicant (who is in fact the owner of the company under these circumstances). It seems like a reasonable way to obtain a US work visa and overcome the requirement mentioned above, and it is happening more and more frequently these days. However, the US Government is aware of this approach, and they recently issued their response.
The United States Citizen and Immigration Services (“USCIS”) recently released a memorandum (“Memo”) which amended the current law and clarified the United States’ stance on self-employed business owners who use their US incorporation to petition for their own H1B work visa. The Memo states that even if the company incorporated in the US, has a US tax identification number, and is willing to submit a petition for the employee, the corporation must also demonstrate that there is an “employer-employee relationship” between the petitioning corporation (employer) and the visa recipient (employee).
The relevant statutory definition of the employer-employee relationship is found at 8 CFR 214.2(h)(4)(ii), which states that the “employer” must be able to “hire, pay, fire, supervise, or otherwise control the work” of the “employee.”
The Memo further clarifies this statutory definition in regards to a self-petitioning employer/employee by stating that a self-employed petitioner does not meet the employer-employee requirement because the employee “cannot be fired by the [employer]. There is no outside entity that can exercise control over the [employee]. The [employer] has not provided evidence that that the corporation, and not the [employee] herself, will be controlling her work.” Essentially, the employee cannot also be the employer.
Consequently, USCIS clarified via the Memo that a self-employed petitioner will fail to meet the requirements for an H1B work visa due to the employer-employee relationship requirement.
So what can those who are self-employed do in order to obtain a work visa in the US? Other possibilities exist to obtain other types of work visas (i.e. E-1. E-2, L-1, etc.), but the visa application must be carefully prepared in order to meet today’s legal requirements, and the corporation will likely need to be strategically operated to align itself with the amended immigration rules.
Overall, the self-employed entrepreneur can still find potential avenues into the United States, but the H1B visa is no longer one of them.
All said and explained in this article does not constitute a legal opinion and does not replace legal advice. Responsibility for using the wordings and opinions conveyed in this article relies solely and entirely on the reader.
This article was written by Dotan Cohen Law Offices, working in the field of immigration law in the United States, Canada, Australia and England.
