E-Visas Help Foreign Brands Build U.S. Business

January 24, 2017 | Corporate

The combination of globalization and the trend toward clean living has revolutionized the natural products industry, creating opportunities and presenting challenges. Opportunities include the availability of products and human capital from around the world. Bringing those resources into the United States, however, presents challenges. Companies that meet those challenges will have a competitive advantage.

NatureCare, a Japanese company, sells an anti-aging moisturizer made from traditional Japanese herbs. NatureCare has consistently sold products to U.S. retailers, but wishes to release a new product made in Japan to the U.S. market and has entered into several contracts with U.S. retailers. NatureCare needs someone with knowledge of its product to train a U.S. sales force and oversee the sale of the new product line to U.S. retailers. NatureCare’s principals have heard of the H-1B program—a non-immigrant visa in the United States under the Immigration and Nationality Act—but are unwilling to take the risk that their application will not be selected in the lottery. They also know of the EB-5 program, which allows entrepreneurs to apply for permanent residence if they invest in a U.S. business, but do not wish to invest the $500,000 and are unsure that they will create jobs for 10 U.S. workers.

Two investors from Denmark find themselves in a similar predicament. They wish to invest equal amounts to purchase a new U.S. company, ABC Corp., that will sell supplements made from fish oil to U.S. consumers. One of the investors is willing to come to the United States to direct and oversee the day-to-day operations of the new U.S. company. Like the NatureCare principals, the investors are uncomfortable with the risks associated with the H-1B and EB-5 programs. In addition, the investors do not have an existing business in Denmark from which to transfer an employee to the new U.S. company through an L-visa.

An E-visa could be the solution to both problems.

Congress created the E-visa classification to allow a company’s principal or its employees to enter the United States and work in specified roles for an indefinite period. The United States issues E-visas for two-year increments, but they can be renewed indefinitely, as long as the foreign national affirms his or her intention to leave the United States when the period of stay, including authorized extensions, ends. E-visa holders are not required to maintain a foreign residence, and dependents are permitted to enter to the United States along with the E-visa holder.

Every E-visa falls into one of two categories: E-1 visas promote international trade and E-2 visas oversee an investment in the United States. To qualify for either category, the applicant and the individuals who own the applicant’s employer must be citizens of a country that has a treaty with the United States (see charts for eligible countries). In addition to these requirements, each category has its own set of eligibility requirements.

To be eligible for an E-1 treaty-trader visa, the applicant must establish he or she intends to enter the United States solely to perform continuous, substantial trade principally between U.S. companies and a foreign company that is at least 50 percent owned by foreign nationals of a country that has a treaty with the United States. The applicant must perform supervisory or executive duties, or have skills essential to the successful operation of the enterprise. Based on the nature of these requirements, the E-1 visa is ideally suited for foreign companies who already sell goods to U.S. companies, but wish to increase their share of the U.S. market by sending the company’s principal or a specialized employee to open a branch of the foreign company in the United States or conduct sales operations.

An E-1 visa would be ideal for NatureCare. NatureCare could secure an E-1 visa for its principal or a high-level sales executive to train a sales force and oversee the sale of the new product line to U.S. retailers if the profits were repatriated to NatureCare. The company could repatriate profits, for example, by establishing a new U.S. company wholly owned by NatureCare.

An E-2 visa for treaty investors, on the other hand, might be appropriate for the investors in Denmark. To be eligible for an E-2 visa, the applicant must establish he or she has made a substantial, active investment in a real and operating commercial enterprise. The law does not establish a minimum dollar amount for an investment to qualify as “substantial.”  To determine whether an investment in an existing business is substantial, the consular post will consider the proportion of the investment compared to the total value of the enterprise.

The investment must be at risk and irrevocably committed to the U.S. enterprise, which must generate more than enough income to provide a minimal living for the treaty investor and his or her family. Foreign nationals from a treaty country must also have a controlling interest in the enterprise. The applicant must intend come to the United State to fill a key role.

After the investors from Denmark purchase ABC Corp., one of the investors could obtain an E-2 visa to enter the United States to manage the start up and run the day-to-day operations of the new business.

Although the E-visa classification is not as well-known as some other visa classifications, it offers the flexibility to accommodate the ever-changing natural products industry. Natural product companies seeking to enter or expand their share of the U.S. market are ideally suited for an E-visa.

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