• Introduction
  • H1B Category
  • L1 Category
  • O1A Category
  • Conclusion

Introduction

The primary nonimmigrant visa for investors and entrepreneurs is the E-2 (E2) Treaty Investors Classification.  However, an alien who is looking to invest or start a business in the United States may find that he or she cannot meet the rigorous requirements for E2 classification.  This is especially the case if the alien in question is not from a qualifying “treaty country” for E2 eligibility.  However, depending on the circumstance, such an alien may be able to use the H-1B (H1B), L-1 (L1A or L1B) or O-1A (O1A) visa categories to meet his or her business immigration objectives.  This article will provide a brief overview of the special considerations for investors and entrepreneurs who are seeking to use one of these three nonimmigrant visa categories.

H1B Category

The primary concern for an investor or entrepreneur who is considering applying for an H1B visa is that the H1B classification requires the existence of a valid employer-employee relationship.  In 2010, USCIS issued an important memorandum regarding the requisite employer-employee relationship in the H1B context [henceforth “the memorandum”].[1]  

The memorandum builds upon the regulatory requirement that the employer of an H1B employee must have the ability to “hire, pay, fire, supervise, or otherwise control the work” of the H1B employee.  Because of this definition, the memorandum stated explicitly that “self-employment” is not a valid employment arrangement for H1B status.

However, USCIS has subsequently provided guidance on how an investor or entrepreneur who would otherwise be self-employed may create an employment arrangement to satisfy the employer-employee relationship requirement for H1B classification.  USCIS stated that if the petitioning employer has a board of directors, preferred shareholders, investors, or other factors that demonstrate that the petitioning employer will exercise the requisite control over the H1B employee’s work, the petition may be approvable.[2] Thus, if an investor or entrepreneur with an ownership stake in the H1B petitioner is seeking H1B status, he or she will be required to demonstrate that the petitioner will exercise the requisite control over his or her work.

An investor or entrepreneur seeking H1B status will have to demonstrate that the petitioner has the ability to pay in order to have a labor condition application approved.  The Department of Labor (DOL) will generally apply higher scrutiny to smaller petitioners.

Finally, because H1B classification is only approvable for “specialty occupations,” an investor or entrepreneur who is seeking it will have to demonstrate that the specific job description in the application demonstrates that the job requires the attainment of a bachelor’s degree or higher.

L1 Category

While the L1 categories also require an “employer-employee” relationship, because the L1A category is for “intracompany managers and executives,” it is generally more amenable to applicants with an ownership stake in the petitioner than is the H1B category.  Nevertheless, it is important that neither the L1A nor L1B categories exist to facilitate self-employment or the relocation of the petitioning organization.[3]

If the investor or entrepreneur had an ownership stake in the foreign company with a qualifying relationship to the stateside petitioner, it is important that the evidence demonstrate that he or she was an “employed by” the foreign company for at least one year.  Evidence that his or her employment was controlled by a board of directors will generally satisfy this requirement.

If the application is to open a “new office” in the United States, the petition must demonstrate both that sufficient physical premises exist for the new office, and that the new office will support a managerial or executive petition within one year.  In investor or entrepreneur in this situation may consider instead applying for an L1B visa if he or she can satisfy the “specialized knowledge” requirements for L1B status.  This removes the requirement that the new office must support a managerial or executive position within one year, and an L1B employee may later apply to switch to L1A status when the new office can support a manager or executive.

O1A Category

The O1A category is for aliens who possess “extraordinary ability” in the “sciences, arts, education, business, or athletics.”[4] The O1A category requires that an employer-employee relationship exists and it is not available for self-employment.  Before considering an O1A visa, an investor or entrepreneur should consider the substantial evidentiary requirements for demonstrating “extraordinary ability,” and assess whether he or she has a realistic chance of meeting them.

In order to qualify as an O1A employer, the employer must be a U.S. employer, a foreign employer using a U.S. agent, or a U.S. agent in what would otherwise be a traditional self-employment situation.

If an investor or entrepreneur can demonstrate “extraordinary ability” in the area he intends to do business, the O1A visa may be a viable option.  The investor or entrepreneur must establish on the petition that the petitioner is legally distinct.[5] If an agent is acting as the employer in what would be a traditional self-employment situation, there must be a contract that specifies the terms of employment and the specific wage being offered to the O1A applicant.[6]

Conclusion

While it is possible in some cases for an investor or entrepreneur to use the H1B, L1, or O1A categories to meet his or her business immigration objectives, there are many complications that arise from the fact that the three categories do not allow for traditional self-employment and are not inherently designed for investors and entrepreneurs.  An investor or entrepreneur should always consult with an experienced immigration attorney who will be able to assess his or her situation and help determine the best immigration solution for his or her business immigration objectives.

Please visit the nyc immigration lawyers website for further information. The Law Offices of Grinberg & Segal, PLLC focuses vast segment of its practice on immigration law. This steadfast dedication has resulted in thousands of immigrants throughout the United States.

Please read our comprehensive articles to learn more:
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  1. Neufeld, Assoc. Director, Service Center Operations, USCIS, “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions,” HQ 70/6.2.8, AD 10-24 (Jan. 8, 2010)
  2. Questions & Answers: USCIS Issues Guidance Memorandum on Establishing the “Employee-Employer Relationship” in H-1B Petitions,” USCIS, Q12
  3. 9 FAM 41.54 N9.4
  4. 8 C.F.R. § 214.2(o)(ii)(1)
  5. 8 C.F.R. § 214.2(o)(2)(ii)
  6. 8 C.F.R. § 214.2(o)(2)(iv)(E); 8 C.F.R. § 214.2(o)(2)(iv)(E)(1)
Resources and Materials:

Coffman, Bill. “Special Issues in Using Nonimmigrant Classifications Other than E-2 for Investors and Entrepreneurs.” Immigration Options for Investors and Entrepreneurs. 2nd ed. Washington, D.C.: AILA, 2010. 5-11. Print. AILA's Occupational Guidebooks.