Articles Posted in Entrepreneurship

The Startup Visa Act

The Startup Visa Act of 2011 was introduced in Congress in 2011 but did not pass. The goal of this visa was to provide a visa to entrepreneurs who have generated outside funding from investors to start a business in the United States. The proposed visa would have been an amendment to the Immigration and Nationality Act and carried two requirements. First, the entrepreneur must demonstrate a certain amount of financial backing and show that their commercial activities will generate certain levels of employment, capital or investment. While the startup visa could have been a good option for entrepreneurs looking to start a business in the US, the bill was never enacted. The Startup Visa was introduced in Congress again in 2013 and the bill is still currently under review.

business-people-1237604Many have been advocating for immigration reform and many are in support of a startup visa. Some hope appeared to be on the horizon with Obama’s executive action on immigration reform. While the executive action proposed significant changes to immigration reform and specifically to entrepreneurs, a startup visa could further benefit the US economy. A startup visa would encourage entrepreneurs to build companies on US soil and promote growth of the economy. Continue Reading

Occasionally, a company requires an intermittent employee to complete a certain project or goal.  A foreign national on an H-1B or L-1 visa may be employed in the US for a short period of time.  . Regardless of how long a particular employee stays or how often they come in and out of the United States, an employee in the United States must comply with I-9 requirements, , even if they are paid by a foreign employer.  More details on the I-9 process can be found here

An employer must ensure, at a minimum, that Section 2 of Form I-9 is completed within three days of the employee commencing employment.  Sometimes an overseas employee may enter the US for the limited duration of a project and leave US without completing the I-9 Form. In such a situation, the employee must complete the Form I-9 upon their next arrival in the United States.  However, this does not always cure the violation; the employer may find themselves in trouble with E-Verify standards.

A common misconception by employers is that rules/laws regarding worksite compliance do not apply to foreign employees. This is not true. Although for an employee  on a foreign payroll the missing Form I-9 may not come up in an I-9 audit, the Immigration and Customs Enforcement may find it in their own audit; or if company tax records are scrutinized.

On a separate note, complying with the IRS tax requirements for both the employer and employee can be a very complicated process, requiring an analysis of the employee’s primary residence, the days spent in the United States, current income tax guidelines, the employee’s income, and other factors.  It is imperative to check with a CPA.

Having a foreign employee work in the US requires the assistance of an expert immigration attorney, irrespective of the duration of employment in the US. Contact our office if you need assistance with hiring a foreign employee, I-9 compliance, or any other immigration issues.

Tax consequences on one’s income are bound to arise regardless of the way a  person has immigrated to the US- – through investment, employment, or family relationships.  This article will explore some of the common tax issues faced by  noncitizens , whether here temporarily or permanently

Taxes from Employment

As a threshold matter, only those with employment authorization from the Department of Homeland Security can work legally in the United States.  Legal permanent residents (green card holders) are free to work for any employer, or even for multiple employers, either full time or part time.  However, foreign nationals on nonimmigrant visas (J-1, H1-B, etc.) have to f first obtaining employment authorization and must ensure that they work within the limits of their nonimmigrant visas.


The IRS has its own classification system for tax purposes. Although the immigration system makes the distinction between immigrants and nonimmigrant, the IRS makes the distinction between resident and nonresident aliens. The IRS has its own way of calculating who is considered   a resident versus a nonresident alien, and it has the most implications for those who are on nonimmigrant visas for extended periods of time or for those who derive income from both foreign and domestic sources.

Furthermore, a resident alien (i.e. most if not all green card holders) is taxed at a graduated or scaled rate on all income from both domestic and international sources just like a United States citizen. A nonresident alien, however, is taxed on certain types of income that has United States sources. Furthermore, nonresident aliens may be taxed at a flat rate on “passive” income with United States sources or at a scaled rate if the income is effectively connected with a U.S. trade or business.

And always, special rules may apply for certain types of occupations, such as teachers, medical professionals, athletes, and employees of foreign governments and international agencies.

If you have questions about your income, employment authorization, or other tax issues and how they may be affected by your immigration status, contact our office so that we may help with your issues.

When people talk about overhauling the immigration system, they are really talking about overhauling a complex network of various agencies that may wear different hats for different audiences. This article will explore a general overview of the agencies involved so that readers may understand just how broad the immigration system can be.

Department of Homeland Security



Perhaps the main “trunk” of immigration is the Department of Homeland Security, or more specifically the three agencies highlighted above in the picture: Customs & Border Protection (“CBP”), Citizenship & Immigration Services (“CIS”), and Immigration & Customs Enforcement (“ICE”). CBP is responsible for the enforcement of the borders and you will see them at airports and at the northern and southern borders.

CIS is responsible for the processing of most immigrant and nonimmigrant petitions, and citizenship applications. As further explained below, although the Secretary of State is often known for issuing visas in foreign countries, it is CIS that is responsible for adjudicating petitions and reviewing evidence. They may also, for employment-related immigration matters, conduct site visits and inspect businesses to ensure compliance with immigration laws. Finally, ICE is the enforcement arm of the immigration system. ICE is the department responsible for going after those who have committed immigration violations as well as exercising prosecutorial discretion when appropriate.

Department of Justice



The Department of Justice houses the Executive Offices for Immigration Review, which holds many of the agencies responsible for the many courts involved in the immigration system. There are the Immigration Courts where people who have committed immigration violations are processed as well as adverse decisions on immigration adjudications by USCIS, as well as the various appellate levels beyond that.

Department of Labor



The Department of Labor is an expansive agency, as one could tell by the chart. The Department of Labor’s role in immigration may seem small relative to the other immigration agencies, but the Department of Labor is the one who manages the lengthy labor certification application process, which may be required for a number of visas.

Secretary of State



Finally, the Secretary of State is responsible for the consular offices abroad and embassies. For many, if not all, immigrants, the consular offices will be the first contact they have with the immigration system. They are primarily responsible for screening individuals for visa eligibility. If a visa was denied, they will also guide the individual with the waiver process.

The discussion and debate around the proposed Immigration Reform bill continues. One of the positive talking points, especially in Silicon Valley, is around the possibility of a startup visa. Titled “Investing in New Venture, Entrepreneurial startups and Technologies,” it provides path(s) for those seeking both temporary (nonimmigrant visa) and permanent (immigrant visa) residence in the United States.

Regardless of the path taken, the foreign national must be a “qualified entrepreneur,” which means a person must:

1. Have a significant ownership in a U.S. business
2. be employed in a senior executive position
3. Submit a business plan to USCIS; and
4. Have a substantial role in the founding or early stage growth and development of the US business entity.

Nonimmigrant Visa

For those seeking the nonimmigrant/temporary visa, there is an initial admission period for three years. The nonimmigrant visa can be renewed every three years as long as the business owned by the foreign national:

1. Created at least 3 full-time jobs AND received a $250,000 qualified investment; OR
2. Created at least 3 full-time jobs AND during the 2 year period ending on the date of the extension applied for generated at least $200,000 in annual revenue.

One of the above two requirements may be waived and a renewal for a up to 2 one-year period (instead of 3) may be granted if the foreign national has made substantial progress in his business and that granting a renewal is economically beneficial to the United States.

Immigrant Visa

There are two types of immigrant visas. Both require that the foreign national be a qualified entrepreneur, as defined above, and both require that the foreign national maintain a non-immigrant status in the US for a period of time. This is a welcome move as it may finally open the door for F- 1/ student visa and H-1B temporary visa holders to start their own businesses and get green cards. Beyond that, however, there are many differences.

Under the first kind of immigrant visa, the foreign national must maintain a valid non-immigrant status (F-1, H-1B, etc.) in the US for at least 2 years. To obtain an extension, the foreign national (1) must have a significant ownership in a US business entity that has created at least 5 full-time jobs AND has received $500,000 qualified investment in his business; OR (2) must have a significant ownership in a US business entity that has created at least 5 full-time jobs AND generated at least $750,000 annual revenue during the last 2 year period AND no more than 2 other aliens have received non-immigrant investment visas on the basis of the foreign national’s ownership of such business.

Under the second type of the entrepreneurial immigrant visa, the foreign national must maintain a valid non-immigrant status (F-1, H-1B, etc.) in the US for at least 3 (not 2) years prior to filing for such status AND hold an advanced science, technology, engineering, or mathematics degree. To obtain an extension, the foreign national must have a significant ownership interest in a US business that created at least 4 full-time jobs AND received qualified investment of at least $500,000. Alternatively, an extension can be obtained if the foreign national’s business created at least 3 full time jobs AND during the 2-year period generated at least $500,000.

These provisions, if passed, will generate more options for foreigners to contribute to the American economy while realizing their own version of the American dream. Although this is ideal for many people who want legal permanent residence through this route, the provisions are complex and will require a combination of knowledge in immigration, corporate, and securities law. Contact our office if you would like to discuss these provisions or if you want to discuss any of the current entrepreneurial options in effect today.

Just as we and many other sites have predicted, the H1-B visa hit its cap on Friday, April 5th, just a mere four days since the opening date on April 1st.

Even before this year’s H1-B visa application season opened, there was talk of a possible lottery. USCIS, the government branch in charge of handling a large proportion of visa petitions, has done a lottery for H1-B visas in the past – most notably in 2008 when the H1-B visa cap was reached on the very first day. This year’s lottery involves a computer-generated random selection process, starting first with the advanced degree petitions. USCIS  announced today (Monday April 8th) that it received  approximately 124,000 H-1B petitions during the filing period, including petitions filed for the advanced degree exemption.

The speed at which the H1-B visa cap was exhausted bolsters our blog posts and other media outlets’ reports on the need for Comprehensive Immigration Reform. In particular, there has been numerous pushes to raise the H1-B visa cap to allow foreign talent to work for the benefit of American companies and spur productivity. John Feinblatt, Chief Policy Advisor to New York City Mayor Michael Bloomberg and Chairman of the Partnership for a New American Economy, reflected similar sentiments when he stated, “The fact that our supply of H-1B visas was exhausted so quickly is not only emblematic of our broken immigration system – it represents yet another missed opportunity to attract the world’s best and brightest to our shores.”

As we’ve stated before, some H1-B related Comprehensive Immigration Reform proposals include allowing H1-B visa holders to get green cards by investing $100,000 to start a business and hire two full-time employees. The proposed Immigration Innovation Act 3.0 will also almost double the current visa cap from 65,000 to 115,000 and allow for unlimited H1-B visas for those who have a Master’s Degree from a United States University.

If you have any questions about the H1-B visa or any of your immigration issues, contact our office!

The H1-B Entrepreneur

It is very much possible to hold a managerial position of a company you helped establish with a H1-B visa. On August 2, 2011, Secretary of Homeland Security Janet Napolitano and USCIS announced many immigration initiatives designed to boost the economy. The most notable one included a policy shift to allow a H1-B visa holder to have a majority or even 100% stake in his or her own company, including as a sole employee, as long as he or she can demonstrate that the company has the right to control the entrepreneur’s employment. Some examples include preferred shareholders or a separate Board of Directors that control the terms and conditions of the entrepreneur’s employment.

E-1 Treaty Trader and E-2 Treat Investor

Both the E-1 Treaty Trader and E-2 Treaty Investor applicant must be a national of one of the qualifying treaty countries, found here on the Department of State’s website. Noticeably, major countries such as India do not make it onto this list. Both visas have no limit on their issuance, are valid for two years and can be extended in two-year increments indefinitely. Both the E-1 Treaty Trader and E-2 Treaty Investor must be employed in a supervisory or executive role or have specialized skills are essential to the efficient operation of the business.

For an E-1 Treaty Investor, both the applicant and the trading firm must be of the same nationality of a qualifying treaty county (for a full list, see below). The company must be at least 50% owned by nationals of the treaty company. The international trade must be a sizable and continuing volume of trade between the countries and more than 50% of the total volume of the company’s international trade must be between the two countries. The applicant him/herself must be employed in a supervisory or executive capacity or possess highly specialized skills essential to the efficient operation of the company. “Ordinary” skilled or unskilled workers do not qualify.

For an E-2 Treaty Investor, the investment must be sufficient to ensure the successful operation of the enterprise, and “at risk,” meaning that there is a risk of loss (i.e. not a guaranteed loan). The investment must be in a functioning, real enterprise and do more than just provide passive income to the investor. E-1 Treaty Trader, the E-2 Treaty Investor

L-1 Intra-Company Transferee

The L-1 visa is a nonimmigrant visa that allows for established foreign companies to send managers, executives, and “key knowledge” employees to work in American branches, subsidiaries, or affiliates. The L-1 visa is split into two types: the L-1A visa for managers or executives, and L-1B visa for employees with “key knowledge” of the business’s products or processes. For both types of L-1 visas, they must be employed on a full-time basis. Conveniently, there is no numerical cap on L-1 visa issuances. It is possible to eventually petition for an immigrant visa (i.e. a green card) under either the EB-1 Multinational Manager and Executives option or the one of the EB-2 options, depending on the circumstances.

O-1 Individuals with Extraordinary Ability or Achievement

Individuals with extraordinary talents in the sciences, arts, education, business, or athletics may have the ability to continue in those fields while residing in the United States.  While the eligibility criteria appears daunting – USCIS describes it as “a level of expertise indicating that the person is one of the small percentage who has risen to the very top of the field of endeavor.” , many entrepreneurs  are successfully using the O visa to work for their own start-up companies.  An entrepreneur could demonstrate that 1) there are published articles about their business/skill in major media; 2) a high salary evidenced by contracts; and 3) employment in a critical or essential capacity for organizations with distinguished reputations. The full list is on the same page linked immediately above. O Visa beneficiaries can stay for 3 years initially and then must apply for one year extensions after.

EB-5 Immigrant Investor

The EB-5 immigrant visa is the only option that provides a “green card” directly. Applicants can choose to directly invest in a business or pool their funds through a Regional Center; a Regional Center is a specially designated investment vehicle company that’s meant to manage and pool EB-5 funds. Some examples of popular investment projects include commercial and residential real estate, hotel development, and green energy production. Although the investment minimum requirement can vary from $500,000 to $1,000,000, the basic requirement is that each investment must create 10 full-time jobs in 2 years from the full infusion of the EB-5 investment.


Although these may seem like there are many different options for someone to start up their own business, as we noted in our last post there are many hurdles and issues that require an experienced business immigration attorney. These issues include basic financial milestones such as coordinating with professional consultants, drafting a business plan, incorporating your company, and of course navigating through the confusing immigration system’s own requirements. Contact our office to learn more and for assistance in starting up your own venture!

Stanford University hosted an event as part of their Entrepreneurship Week on Sunday, March 3 that was packed with 200 students looking for ways to get visas and green cards in order to jumpstart their ventures. As an immigration expert, Ms. Khandelwal shared her knowledge on the dos and don’ts of visas, and lamented the fact that H1-B visa holders, which some of the attendees were, cannot start up their own companies.  “It does not allow you to work for anybody else,” including your own business, she stated.

However, with the talk of legislation such as the Startup Visa Act 3.0, which we’ve previously blogged about, that may soon change. In the meantime, temporary visa holders and other noncitizens looking to get into the United States have other means of starting up an American business. The H1-B, E-1, E-2, and L-1 visas are all nonimmigrant visas options, but only allows a person to stay in the United States for a particular purpose for a limited period of time. The only immigrant visa with an entrepreneurial option is the EB-5 visa, which provides the “green card” that leads to a path to citizenship directly.

Despite what may seem like many options, these visas are often subject to cumbersome and prohibitive requirements. Most notably, there is only a single visa – the EB-5 visa – that allows for a “green card” directly. The nonimmigrant visas (H1-B, E-1, E-2, and L-1) only allow for temporary residence and must be tied to the specific purpose the visa was approved upon. This is hardly the way to reward entrepreneurial immigrants who contribute heavily to the American economy, create jobs, and spur innovation.

Furthermore, the EB-5 option may be cost prohibitive and is limited in number. Currently, the bare minimum investment threshold is $500,000 USD, which is quite a hefty sum and difficult to accumulate for those looking to immigrate quickly. Furthermore, the large majority of these projects are done through pooled investments with Regional Centers, and involve a variety of different construction projects, meaning it could take years before a person can immigrate into the United States. The large majority of these visas also came from Chinese applicants, and most recently China nearly hit their visa cap under the Regional Center pilot program.

The nonimmigrant visas are seemingly flexible, but there are still many issues. On top of the fact that they do not directly provide for a path to citizenship, each nonimmigrant visa ties the noncitizen to a specific position or purpose. For example, the L-1 intracompany visa is only available to managers, executives, and “key knowledge” employees that are coming to the United States to work at an American subsidiary, affiliate, or branch office. The E-1 or E-2 Treaty Visa beneficiaries must be nationals of an exclusive list of countries; Most notably, major countries like India are missing from this list. And even with the more flexible approach adopted by USCIS in 2011 for H1-B visa holders looking to start their own business, they must still demonstrate that their employment is under the control of preferred shareholders, other investors, or a board of directors that have the power to hire, fire, pay, supervise or otherwise control the H1-B visa holder.

Because of these issues, a successful case requires the expertise of an experienced attorney that can navigate the intricacies of immigration law and understands the realities of start-up businesses. Contact Ms. Sweta Khandelwal if you have exploring these entrepreneurial visa options or have any other immigration questions.

In the midst of all of the CIR, yet another piece of legislation has entered the fray. The Startup Act of 3.0 is finally getting some traction in Congress, with its recent introduction in the House of Representatives and Senate.

Introduced by a group of legislators led by Senator Jerry Moran (R-Kan.), the Act would allow for 75,000 individuals who are already in the United States on either H-1B visas or F-1 student visas to gain a path to citizenship. To do this, they would have to invest at least $100,000 and start a business that employs at least two full-time employees. The entrepreneurs would have then three more years to get to at least five employees and then receive permanent legal permanent residence (a “green card”).

“The Kauffman Foundation shows data that nearly all net new jobs created over the last 3 decades – nearly 40 million jobs – were created by these high-growth entrepreneurial businesses,” Senator Moran says. “In fact, 40% of Fortune 500 companies were started by first- or second-generation immigrants. The businesses high-skilled immigrants create are the source of jobs for Americans, the source of innovation and economic growth.”

The Act also benefits STEM (Science, Technology, Engineering, and Math) Masters and PhD students who are on visas to conditionally receive a green card if they remain in their fields for at least five years. Afterwards, they could get permanent green card status.

This bill has been introduced twice before, once in 2010 and once in 2011. With the recent buzz about CIR this year, hopefully this Act will do better than its two predecessors.

A path to citizenship for entrepreneurs already exists through the EB-5 category. However, the investment threshold can be prohibitive for most start-ups. Most H1-B and F-1 student visa holders do not have the $1,000,000 or $500,000 needed to immediately invest and gain green cards through the EB-5 program, especially when typically it only takes $20,000 to $30,000 to build a high tech business. Furthermore, there must be at least 10 jobs created for each EB-5 investment.

Our office is enthusiastic about the Startup Act 3.0. H1-B  and F-1 visa holders contribute enormously to the American economy, through their minds, technical skills, and entrepreneurial spirit. It is only fair to offer them a chance to stay in the United States and further contribute to our economy while also creating jobs for local communities.

Contact us if you have any questions about this article or about your own immigration situation!