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Here’s another edition of “Ask Sophie™,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
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Dear Sophie:
I’m a startup founder in Israel looking to expand into the U.S. market. What is the best visa option for me and a key member of my executive team to come to the U.S. to establish a sales and marketing office there? I would like my spouse and children to join me if my spouse can also work in the U.S. Is that possible?
— Tenacious in Tel Aviv
Dear Tenacious:
Thanks for reaching out. Based on your situation, the E-2 visa for treaty investors and employees may offer the best option.
An underutilized option, the E-2 visa is ideal for startup founders and employees whose home country has a treaty of commerce and navigation with the U.S. Israelis became eligible for E-2 visas just last year, joining the citizens of 80 other treaty countries. For more details on E-2 visas for founders and employees, check out Episode 16 of my “Immigration Law for Tech Startups” podcast.
While China (with the exception of Taiwan, which is a treaty country) and India are not on that list, a solution exists for citizens of non-treaty countries, which I’ll discuss later.
Unlike most other nonimmigrant visas, the E-2 visa enables the spouse to get a work permit in the U.S. under a dependent E-2 visa. Other benefits of the E-2 include:
- The ability to extend that status indefinitely as long as the conditions under which the visa was originally granted remain in place
- No cap exists on the number of visas issued each year
- The application process does not involve a lottery
- An application can be submitted at any time
In addition to the investor seeking a visa being a citizen of a treaty country, the U.S. company must be at least half-owned by citizens of the same country. For employees seeking an E-2, the business must be majority-owned by an individual or individuals who are citizens of the same treaty country as the E-2 candidate. That means you, as an investor, and your key executive, as an employee, may both be eligible for an E-2 as long as you both are Israeli citizens. E-2 visa holders need to remember that equity financing rounds, or a co-founder getting a green card, will dilute the ownership of the business by a national of a treaty country and potentially jeopardize E-2 visa status down the road, so you need to plan carefully in advance if you’re raising funding or there are multiple owners who may later decide to stay.
Another requirement of the E-2 visa is that the founder or business needs to have already invested or be currently investing a “substantial amount of capital” in its U.S. operation. While no minimum investment is required, the capital invested should be commensurate with what it would take for a business in its sector and of its size and stage of development to succeed. In addition to cash, the investment can include goods, equipment or intellectual property. So if you’re broke but you have a brilliant idea and other people are willing to validate its worth, you may have an option, as well.
The only requirements are that the funds must come from a legal source and any funds invested in the U.S. venture must be at risk, which means that you cannot invest money from a loan secured by the assets of the business. Moreover, you must show that the investment in the U.S. venture can generate not only enough income for E-2 visa holders and their families, but also profits to create well-paying jobs and reinvest in further growth. Startups seeking hockey-stick growth curves typically don’t have an issue with that part.
Keep in mind that immigration officials currently evaluate applications with an eye toward protecting the economic interests of American workers when positioning yourself or your key employees for this or any other visa or green card, for that matter. That means a strong E-2 visa petition should demonstrate how your business will contribute to higher employment rates and wages in the U.S. by creating a lot of well-paying jobs for Americans. It can also be beneficial if the company will be buying American goods and services.
For your employee to qualify for an E-2, your startup company would need to show that she or he has essential skills to help direct the U.S. operation.
The E-2 is a temporary, nonimmigrant visa. Most immigrant visas require their holders to show that they intend to eventually return to their home country and maintain a residence in their home country. However, under E-2 visas, unless you’re basing it off U.K. citizenship, you and your family can sell your residence in your home country and move all of your belongings to the U.S. if you intend to stay in the U.S. for a long period of time. But, you must still intend to leave the U.S. when your work is done here. There are some exceptions to this. For instance, individuals from the U.K. are required to maintain their residence in their home country.
U.S. embassies and consulates have been closed to routine visa and green card processing due to the coronavirus pandemic. You can either have the first application be an E-2, or if you want to come visit the U.S. to scope things out first and get things set up, you might be able to come first on B-1/B-2. If your company will be working in medical services or technology or will somehow support the U.S. response to COVID-19, it may be possible to get an emergency visa appointment.
If you or your key executive don’t already have a valid B-1 visitor visa for business, you can apply for one to begin the process of setting up your business once U.S. consular offices reopen. Under a B-1 visa, you can negotiate contracts and incorporate a new business. However, be aware that no hands-on work is allowed. This is really important: Make sure immigration officials know you select the option at entry that you are visiting for business. We had a founder come to us after he had been denied an E-2 visa at a European consulate. His first visit to the U.S. was under a B-2 visitor visa for pleasure. He visited friends and the beach, but he also signed an office lease for his business. After already investing $200,000 in the U.S. and preparing for the visa application several years later, immigration officials in Europe ultimately denied his E-2 petition, citing that he had committed fraud by leasing the office, which was considered “conducting business,” under the B-2 tourist visa.
What to do if you’re not a citizen of one of the countries on the list? There’s a legal workaround. Some countries have citizenship through investment programs, such as Grenada and Turkey, and also have a treaty of commerce and navigation with the U.S. So, you can fulfill the requirements to become a citizen of a third country, live there for a little while and establish a residence, and from there, apply for a U.S. E-2 visa.
Best wishes!
Sophie
Have a question? Ask it here; we reserve the right to edit your submission for clarity and or space. The information provided in “Ask Sophie™” is general information and not legal advice. For more information on the limitations of “Ask Sophie™,” please view our full disclaimer here. You can contact Sophie directly at Alcorn Immigration Law.
Sophie’s podcast, Immigration Law for Tech Startups, is available on all major podcast platforms; if you’d like to be a guest, she’s accepting applications!
