Treaty Investor and Trader Temporary Work Visas
Foreign-owned companies doing business in the United States may benefit from the E visa category reserved for trade and investment. This category provides flexibility and green card convertibility for foreign executives and managers. As well, it serves as a powerful alternative to the H-1B visa category for high tech and other specialty occupation employers.
Treaties between the United States and some countries allow foreign nationals to come to the United States temporarily to conduct trade or to manage investments. Long-term business objectives can be reached using these visas, as they are generally valid for five years and are renewable. Importantly, an E-1 employee (unlike an L-1 employee) can be a "new hire" who has not previously worked abroad for the company.
E-1 Treaty Trader Visa Criteria
The employer must have the nationality of the treaty country. In other words, nationals of the treaty country must own at least half of the foreign parent company and half of the United States subsidiary.
Company trade between the United States and the treaty country must be substantial. At least 50 percent of the company's international trade must be between these two countries. Trade includes the exchange, purchase or sale of goods or services or the transfer of technology.
The employee must be a national of the treaty country. He or she may be either the principal trader, who is coming to the United States to engage in substantial trade, or an executive, supervisory, or essential skills employee of the trading company.
E-2 Treaty Investor Visa Criteria
The investing individual or firm must have the nationality of the treaty country. Nationals of the treaty country must own at least half of the foreign parent company and half of the United States subsidiary.
A "substantial" investment in business in the United States must be made. (There is no fixed dollar amount, which may range from as little as $50,000 to $1 million or more. The business must be active and ongoing. It cannot be passive, such as the purchase of undeveloped land.)
The employee must be a national of the treaty country. He or she may be either the principal investor, who will direct and develop the enterprise, or an executive, supervisory, or an essential skills employee of the investment enterprise. The investment must not be the primary income source for the investor.
E visas are generally issued for five years and can be renewed an unlimited number of times in five year blocks by the State Department Visa Office in Washington, D.C. without requiring the employee to return home. Each entry into the U.S. provides a two-year stay, even if the visa expires prior to the two-year mark.
An essential skills employee possesses skills or aptitudes essential to the successful or efficient operation of the U.S. enterprise. (Such skills, for example, can consist of highly technical knowledge or familiarity with overseas operations.) Essentiality is determined by assessing the employee's proven expertise in the field, the uniqueness of the skill or aptitude, the length of experience or training required to obtain the expertise, and salary level.
The Big PictureGrowing Demand, Shrinking Supply For H-1B Visas | ||
| 1990-97 | Quota Not Exhausted | 65,000 |
| 1998 | Quota Exhausted May 8 | 65,000 |
| 1999 | Quota Exhausted June 15 | 115,000 |
| 2000 | ? | 115,000 |
| 2001 | ? | 107,500 |
| 2002 | ? | 65,000 |
| No quota on H-1B visas existed before 1990. When fiscal year 2000 began for the INS on October 1, 1999, an estimated 40,000 visas were already in the processing pipeline. Without congressional intervention, the quota will return to 65,000 visas in fiscal year 2002. | ||
E-1/2 or H-1B: Which Is Best For Your Company? | |||||
| Category | "Immigrant Intent" Allowed? | Time Limits | Processing | Eligibility | Other Criteria |
| E-1 Treaty Trader E-2 Treaty Investor | Yes. Can file an immigrant petition yet remain in valid E nonimigrant status ("dual intent"). | E visa generally valid for 5 years. Eligible for renewals in 5-year increments. Each entry valid for two years. | Can skip INS and go straight to embassy abroad for visa. | Only certain nationalities eligible. (Unlike L visa, need not have been employed abroad by a related company for one year prior to application.) Degree not required. | U.S. company at least 50% owned by treaty nationals. Substantial trade or investment. Majority of international trade with treaty country. |
| H-1B | Yes. Can file an immigrant petition yet remain in valid H-1B nonimmigrant status ("dual intent"). | Initial stay of 3 years; eligible for one 3-year renewal. (Maximum aggregate stay of 6 years, even if there is a change in employers.) | Must file at INS Service Center after clearance from Department of Labor | All nationalities eligible. Must be "Specialty Occupation." Bachelor's degree or equivalent required. | CAn be U.S. or foreign owned. No international trade required. |
"Top Ten" I-9 Compliance Mistakes
I-9 compliance requires consistency, calendaring, and, of course, familiarity with the basic federal requirements for employment authorization verification. Copying, however, is optional. If you choose to copy supporting I-9 documents, be consistent. Copy all documents or none, in order to reduce discrimination claims, as well as the appearance of noncompliance as to those documents that you "forgot" to copy. Copied documents become a part of the I-9 and must be retained with the I-9 form for the required retention period. As a general rule, you must maintain the I-9 records for the full period of employment, plus one year. At a minimum, each I-9 form must be kept for three years from the date of hire.
Several levels of federal fines apply to I-9 violations. In fact, the INS has just increased several I-9 fine amounts. We list below the "Top Ten" I-9 violations. How do you rate?
10 Not Segregating INS I-9 Records from Other Personnel Records
9 Failing to Monitor Expiration of Temporary Work Authorization
8 Mishandling Photocopies of Verification Documents
7 Accepting Documents That Do Not Appear to Be Genuine
6 Not Requiring Originals of Employee Documents
5 Failing to Complete the Section 2 Employer Certification Block
4 "Overdocumenting" the Employee (i.e., Requiring More Than the Acceptable Minimum)
3 Failing to Sign and Date Form I-9
2 Allowing the Employee to Leave The Section 1 "Status" Block Empty
1 Not Completing The I-9 Form in a Timely Manner
An employee must complete section 1 of the I-9 form no later than the first day of work. The employer must complete section 2 by the end of the third business day of work. We recommend that, before seeing the employee's original documents, the employer show the list of acceptable documents to the employee and then ask the employee to provide documents of his or her choice that comply with the list. In this way, the employer can reduce overdocumentation and national origin discrimination claims. The reasonableness standard applies when determining whether the employee's original documents appear on their face to be genuine.
If an employee is unable to present the required I-9 documents by the end of the third business day of work, termination must occur unless the employee at that time provides a receipt for replacement of a lost, stolen, or destroyed document. Contrary to common belief, a receipt is not adequate if it is, instead, for the extension of an expired document--even if the expired document is an INS work authorization card.
Choosing The Best Entry Category | ||
| Is Your Company..? | Is The Worker..? | Consider This Visa |
| 50% Or More Foreign Owned? | From That Country? | E Category |
| Legally Related To A Company Abroad? | Employed Abroad By That Company For At Least One Year? | L Category |
| Neither Of The Above, But Trying To Fill A Position In An Industry That, At A Minimum, Requires A Bachelor's Degree? | The Holder Of A U.S. Bachelor's Degree Or Its Equivalent? | H Category |
How Long Will It Take?1 | ||||
| Where the work will be performed? | E Visas | L Visas | H Visas 2 | Business Green Cards 3-4 |
| AK, CO, ID, IL, IN, IA, KS, MI, MN, MO, MT, NE, ND, OH, OR, SD, UT, WA, WI, WY | 30 | 30 | 30 | 680-740 |
| AZ, CA, HI, NV | 30 | 45 | 45 | 900-1100 |
| AL, AR, FL, GA, KY, LA, MI, NM, NC, OK, SC, TN, TX | 45 | 45 | 45 | 700-950 |
| CT, DE, DC, ME, MD, MA, NH, NJ, NY, PA, PR, RI, VT, VA, WV | 30 | 21 | 21 | 270-540 |
Notes: "How Long Will It Take?"
1. All of the following processing times run from the date an application is received by the government. Preparation time prior to filing the application depends heavily on client responsiveness in providing documents and information and generally ranges from 2 to 30 days in addition to the time shown.
2. H data includes average time required to obtain labor department and related pre-filing clearances. These times may vary widely from region to region.
3. Processing times include both the I-140 stage and the subsequent I-485 stage. Generally, travel and work permission may be obtained, respectively, on or before the 45th and 91st days after the filing of the I-485.
4. For business green cards, find the state where the employee will perform the work. You will see the total number of days required to complete a business green card. If labor certification is involved, add an average 500 days. For example, processing in Vermont requires up to 540 days, but if a labor certification is involved, add the average 500 days for a total time of 1,040 days to complete a business green card.
What If Our Employee's Dependent Is Not Eligible For A Social Security Number?
In 1996, the Internal Revenue Service ("IRS") began assigning individual taxpayer identification numbers ("ITINs") to aliens who are not eligible for social security numbers ("SSNs") but nevertheless need identification numbers for tax purposes. An ITIN is a tax processing number for certain nonresident and resident aliens, their spouses, and dependents. It should be used only for income tax purposes.
ITINs do not entitle aliens to social security benefits or the earned income tax credit. They do not create any immigration status nor any right to work in the United States. An ITIN is only available to individuals who cannot obtain a SSN. All work-authorized aliens are entitled to a SSN and should file Form SS-5 or otherwise apply for a SSN as part of the visa process. An alien should apply for an ITIN on IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. The W-7 Form may be obtained from an IRS office, a U.S. consular office abroad, or the IRS website: http://www.irs.gov/.
It generally takes five to six weeks to receive an ITIN.
Aliens who must file a U.S. tax return or are listed on a tax return as a spouse or dependent and who cannot obtain a valid SSN must apply for an ITIN. The ITIN must be furnished on all tax returns, tax statements, and other tax-related documents. If a dependent SSN/ITIN is missing, any tax exemption will be denied.
An increasing number of U.S. and foreign companies are expanding into global operations, requiring the transfer of foreign employees to and from U.S. facilities. And, with ever-increasing competition, businesses seek the very best talent available--regardless of nationality.