Five Questions That Determine Whether Your U.S. Expansion Has a Visa Problem

As the next step in your company’s growth trajectory, you have proudly spearheaded plans for expansion into the U.S. After years of careful planning, funding has been secured, with profit benchmarks firmly outlined for the next several quarters.

Precisely the right executive has been selected to head the new entity, and the individual’s spouse and family have begun to plan their transition overseas.

With these project ‘pillar’ in place, you feel ready to hand off the administrative details to HR, who will be tasked with researching and executing the steps needed for the transfer.

How do you know if your U.S. expansion has a visa problem? A visa problem often appears when the person you plan to send cannot legally perform the intended work, the company’s ownership or corporate structure does not support the expected visa route, or the immigration timeline does not fit the commercial plan. Checking who will run the U.S. operation, their employment history, the ownership and relationship between the entities, and the required start date can reveal those risks before the expansion plan is finalised.

Five Questions to Answer Before Your U.S. Expansion Plan Is Final

Question 1. Who will run your U.S. operation, and can they legally work there from day one?

A successful launch depends on having an individual with the right to do the job when they land in the U.S. A business trip is not the same as real work.

Travel under the Visa Waiver Program using ESTA, or in B-1 visitor status, may permit temporary business activities such as meetings, negotiations and consultations, as well as certain preparatory activities connected with establishing a U.S. business. It does not normally authorise productive employment for the U.S. business or the day-to-day running of the U.S. operation. The proposed activities, not simply the length of the trip, determine whether business-visitor status is appropriate.

Question 2. Where does your company’s ownership sit?

Where you’re incorporated does not determine eligibility. The route you were counting on may not be open given your ownership structure.

1. The treaty routes (E-2 treaty investor, E-1 treaty trader) turn on the nationality of ownership, not the country of incorporation. For E-1 and E-2 purposes, the U.S. treaty enterprise generally must be at least 50% owned by nationals of the relevant treaty country. Where companies sit in the ownership chain, treaty nationality usually has to be traced through that structure to the qualifying owners; different evidentiary rules can apply to publicly traded companies.
2. UK: E-1 and E-2 eligibility derives from the 1815 Convention of Commerce and Navigation. British nationals relying on the UK treaty basis must also meet the applicable UK residence requirement.
3. Ireland: E-1 Treaty Trader eligibility derives from the 1950 Treaty of Friendship, Commerce and Navigation. E-2 Treaty Investor eligibility was added by the Protocol signed on 24 June 1992, which entered into force on 18 November 1992.
4. Why a CEO should care: private-equity backing, a foreign parent, or mixed ownership can knock out treaty eligibility even for a company that looks unmistakably British or Irish on the letterhead.

Question 3. How long has your key person worked for you?

For an L-1 intracompany transfer, the employee generally must have completed one continuous year of qualifying employment abroad with a qualifying organisation within the relevant three-year period. That employment may be with another qualifying entity in the corporate group; it does not necessarily have to be with the exact foreign company that will appear in the U.S. transfer structure. A recent hire, or someone engaged as an independent contractor rather than as an employee, may therefore not qualify for L-1.

Question 4. Have you set up the U.S. entity, and how is it connected to the parent?

The L-1 requires a qualifying relationship between the foreign and U.S. entities, such as a parent, subsidiary, affiliate or branch relationship based on qualifying ownership and control. For an established U.S. operation, the qualifying organisations must be doing business as required by the L-1 rules.

A different evidentiary framework applies where the U.S. operation is a new office. The U.S. entity can qualify before it has a full operating history, but the petition must establish the corporate relationship and show that the new operation is properly established and supported. A new-office L-1 is generally granted initially for up to one year, after which an extension depends on evidence that the U.S. business is operating and can support the qualifying position.

The E-2 requires a qualifying treaty enterprise supported by a substantial investment in a real, active and non-marginal U.S. business. A principal E-2 investor must come to develop and direct the enterprise, normally through at least 50% ownership or another form of operational control. A qualifying E-2 employee does not have to invest personally but generally must share the treaty nationality of the enterprise and come to the U.S. in an executive, supervisory or qualifying essential-skills role.

Question 5. What is your real timeline, and does your chosen route match it?

A route mismatched to the timeline is the reason many launches slip. It is a mistake to assume that the visa is a formality to be handled at the end of the process.

1. An E-2 applicant applying through the consular route applies directly through the relevant U.S. Embassy or Consulate, using the DS-160 and the E-visa documentation required by that post. There is no preceding USCIS petition on this consular route, so timing depends heavily on the procedures and appointment availability at the relevant post.
2. Premium processing is available for eligible L-1 petitions and requires USCIS to take qualifying adjudicative action within 15 business days. It accelerates the USCIS petition stage; it does not guarantee approval within that period or eliminate the subsequent consular visa process where one is required.
3. A Request for Evidence (RFE) can materially extend the timeline because USCIS pauses the straightforward adjudication process while additional evidence is gathered, submitted and reviewed.

What all five questions have in common: your next step:

Remember: none of the points listed in this article are legal technicalities for their own sake, meant to be delegated and forgotten.

As a leader, you have the ability to find the answers to each one of the five diagnostic questions listed above in just minutes. Yet, answered the wrong way, each question exposes a specific, avoidable problem.

Prior to that initial call with legal counsel, it is you, the leader, who can bridge the gap between all the commercial planning that has been done and immigration reality…

This post is for informational purposes only and is not intended as legal advice. If you require further assistance or advice relating to the above, please contact janice@flynnhodkinson.com.