Articles Posted in Small Businesses

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If you are a foreign entrepreneur, you have probably discovered that the United States immigration system is very limited in that there are very few visa options available to entrepreneurs that do not tie down the entrepreneur to a foreign employer, as is the case for the L and H visas. To make matters worse, if your ultimate goal is to obtain a green card to live and work in the United States permanently, you must work for an American employer willing to sponsor your adjustment of status. Although there are few exceptions, the main avenue through which entrepreneurs can gain permanent residence is either through family-sponsorship or employment-based sponsorship.

To obtain permanent residence through an employer you must either a) be a professional employed by a U.S. employer willing to sponsor your green card b) demonstrate extraordinary ability in your industry (science, arts, education, business, or athletics, c) work in a management or executive position abroad requiring international transfer to the United States or d) qualify as an EB-5 investor. In either of these cases, the U.S. employer must submit the I-140 Immigrant Petition for Alien Worker for you, before you can apply for permanent residence. If your ultimate goal is not to obtain a green card, then you have more options available to you.

We decided to write about this topic because we have found that many entrepreneurs that visit our office are not well-informed on other visa types that put them on a more direct path to permanent residence. Often times the topic of conversation leads to the E-2 Treaty trader visa, by far the most discussed visa type among entrepreneurs. Few entrepreneurs however have heard about the L-1 visa classification, that may in some ways be more beneficial to foreign entrepreneurs wishing to live and work in the United States permanently. Below we discuss both visa types and the advantages and disadvantages of both visas.

The E-2 visa, the most talked about visa:

Without a doubt, the most popular visa option entrepreneurs ask about is the E-2 visa. Many entrepreneurs however do not know that the E-2 visa is not available to everyone, and it is not a path to permanent residence. The E-2 visa is a non-immigrant treaty investor visa that is only available to foreign nationals from specific treaty countries. The E-2 visa allows foreign nationals to carry out investment and trade activities, after making a substantial investment in a U.S. business that the foreign national will control and direct. E-2 visa investors can either purchase an existing U.S. business or start a new business.

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A recent working paper published by Harvard economist, William R. Kerr, and Wellesley economist, Sari Pekkala Kerr, is making waves on the subject of immigrant entrepreneurship. The study asks: just how important are foreign-born entrepreneurs to our economy? Are their contributions truly significant?

The study’s abstract reads as follows:

We examine immigrant entrepreneurship and the survival and growth of immigrant-founded businesses over time relative to native-founded companies. Our work quantifies immigrant contributions to new firm creation in a wide variety of fields and using multiple definitions. While significant research effort has gone into understanding the economic impact of immigration into the United States, comprehensive data for quantifying immigrant entrepreneurship are difficult to assemble. We combine several restricted-access U.S. Census Bureau data sets to create a unique longitudinal data platform that covers 1992-2008 and many states. We describe differences in the types of businesses initially formed by immigrants and their medium-term growth patterns. We also consider the relationship of these outcomes to the immigrants’ age at arrival to the United States.

The study is important because it forces members of Congress to conduct a cost-benefit analysis, in order to determine whether or not it is beneficial for the United States to create more opportunities for highly-skilled entrepreneurs and professionals. Regrettably, the immigration debate has largely centered around illegal immigration to the United States, ignoring calls to create more flexibility for highly-skilled immigrants and immigrant entrepreneurs. As it stands today, immigrant entrepreneurs can only obtain a green card via sponsorship from a United States employer. The majority of entrepreneurs are forced to remain in the United States on a temporary ‘dual intent’ nonimmigrant visa, until a U.S. employer agrees to sponsor their green card. Visa options are very limited for highly-skilled immigrants. Even for the most brilliant of entrepreneurs, this process requires time and patience. Our current immigration laws are doing us a disservice since they are keeping out some of the most talented entrepreneurs in the world. Immigrant entrepreneurs are increasingly important because the number of businesses and American jobs they create is on the rise.

Here are some of the study’s findings:

  • As of 2008, at least one in four entrepreneurs among start-up companies are foreign-born. Similarly, at least one in four employees among new firms are foreign-born
  • 37% of new firms had at least one immigrant entrepreneur working for the company
  • At least 1 in 3 start-up firms were founded by an immigrant entrepreneur, with an increasing rate from 1995-2008
  • The share of immigrants among all employees working for start-up companies is on the rise
  • Immigrant employees in low-tech positions comprise about 22.2% of start-up companies, while 21.2% of immigrants work in high-tech positions in start-up companies
  • Among new start-ups backed by venture capitalists, 60% had at least one immigrant entrepreneur
  • Immigrant employees working for a start-up company backed by venture capitalists have higher mean average quarterly earnings

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Presently, the Employment and Training Administration’s (ETA) Office of Foreign Labor Certification (OFLC) is experiencing significant delays in processing employer H-2B certification applications.  These delays are owed to various factors. The most important includes a mandatory 17-day certification pause that took place at the Chicago National Processing Center, for the purpose of implementing revisions of the H-2B prevailing wage and other standards required by law. Additionally, the OFLC announced that the amount of H-2B certification applications received has doubled in comparison to the previous year. Lastly, the electronic filing system iCERT, experienced significant technical problems, slowing the certification process down significantly for employers of H-2B workers. Unfortunately, these delays have diminished an employer’s ability to hire foreign workers during a time of need, and have had an adverse affect on small businesses who depend on these temporary and seasonal workers to perform work that cannot be readily filled by American workers.

To alleviate the certification backlogs, the Chicago National Processing Center has announced that employers may file an emergency request for expeditious handling of their applications under 20 CFR 655.17.

Expeditious Requests for Emergency Procedures under 20 CFR 655.17:

  • Based on the factors causing the backlogs, the OFLC has determined that employers are entitled to request expeditious emergency procedures for their currently pending applications for certification, under 20 CFR 655.17, on the basis of good and substantial cause. Emergency requests are warranted given that the backlogs caused by the delays in the application process are considered outside of the employers’ control, that employers have suffered unforeseen changes in market conditions because of the delays, amid a climate of uncertainty.

Employers with pending H-2B applications for certification must submit their expedite requests for emergency procedure, by email to the Chicago NPC at ER.H2B.Chicago@dol.gov beginning Monday February 22, 2016 (12:01 AM) through Friday April 1, 2016 (at 12:00 midnight). Requests may also be made by fax (312) 886-1688 or by US mail to:

ATTN: H-2B Request for Emergency Handling

U.S. Department of Labor ETA OFLC

Chicago NPC

11 West Quincy Court

Chicago, IL 60604-2105

The NPC may extend this emergency request period beyond April 1, however at this time no such extension has been announced.  Filing a new H-2B application is not necessary for an expedite request.

Employers filing for emergency treatment under 20 CFR 655.17 must request that the pending application for certification and proposed job order be “incorporated by reference” into the request made under 20 CFR 655.17, and state the withdrawal of the prior application. The procedure for submitting an expedite requested will be listed below.

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