Visas for Entrepreneurs
U.S. immigration policies make it notoriously difficult for foreign nationals to start new businesses in the United States. There are very few traditional visa options that allow individuals to begin a new business in the United States, regardless of how much merit the new business idea has. The options discussed below are an introduction but are no means exhaustive of the opportunities available. The appropriate course of action for any entrepreneur is fact specific.
The EB-5 is a two-year conditional green card granted to investors who will invest or have invested $1,000,000 in a new business. There is a $500,000 threshold for businesses invested in rural areas and cities that have unemployment rates 150% of the national unemployment rate. In addition, this investment must create 10 jobs in the United States. Two years after the initial application, if the business has 10 full time employees, the investor will be granted a permanent green card.
The investment must be from the investor’s personal assets. The investment cannot come from outside loans. Moreover, the investment must be completely at risk, which means that if the business does not last, the investment will be lost. However, there is no problem if the $1,000,000 investment is part of a larger investment in the new business, including investments by other investors.
This is a great option if you have an existing business or if you have the funds to invest in a new business with a group of other investors. It is admittedly difficult to create 10 jobs within 2 years on just $1,000,000, which is why it is best to partake of a larger investment or transition an existing business for EB-5 purposes.
The U.S. maintains treaties with numerous countries (but not all countries, notably India and China are not subject to this visa type) that allow investors to enter the United States to run their own businesses. In order to pursue an E-2 visa, the entrepreneur must start the business before the visa is granted. Like the EB-5, the money must be truly at risk and the money must be the investor’s personal assets.
However, the monetary threshold for approval is much lower than for the EB-5. While no official numbers are published regarding how much money an investor must put into a U.S. business for an E-2, the amount must be “substantial”. We generally advise that an amount of at least $200,000 must be invested but I have successfully assisted clients investing as little as $15,000. The necessary sum is relative to the type of business being run or started. If it will take significantly more than $200,000 to make the business viable, than $200,000 may not be a large enough investment. For example, to open a McDonald’s franchise may require an investment of several hundred thousand dollars or even $1,000,000. On the other hand, to open a new software consulting company may require only $50,000 to open.
Begin a new business while employed or studying on another visa type inside the U.S.
There is no prohibition on starting businesses while in the United States for students on F or J visas or employees on visas such as H, L, E, or TN. Corporations are creatures of state law and there is rarely anything preventing foreign nationals from opening new businesses in a particular state. A particular visa status may make it challenging to get a loan, but not to legally own or invest in a business.
It is admittedly difficult to operate a new business when preoccupied with full time employment or studies. However, this option does allow the foreign national to invest money over time, and even invest enough money to hire others to run certain elements of a new business in the meantime. If this route is taken, once $1,000,000 or $500,000 is invested, the foreign national could apply for an EB-5 and then take over the business full time.
Begin a new business abroad
While many individuals want to begin businesses in the United States due to the availability of outside investors and the qualifications of the labor force, it may actually be best to begin a company abroad with the goal of eventually entering the U.S. with a new branch of the foreign corporation. By starting a business in your home country you are not constrained to any time limits and you can get your business up and running. If you are running a tech company, this is an especially attractive option, as you can enter the U.S. market easily from abroad.
Once your company is solidified in a foreign country, you can then begin a U.S. subsidiary. With this U.S. subsidiary, you can file an L-1A application to come over to manage the new U.S. office. This is a 1 year visa that is renewable if the company continues to succeed in the U.S. The L-1A will give you up to 7 years of status inside the U.S. Once this is expiring, depending on the nature of the company, an EB-5 may be an option, or an EB-1 which is a green card for a manager or executive.
- Franchises Are a Great Option for E-2 Entrepreneurs
- Can Foreign Students and Other Immigrants Start Businesses in the United States?
- Can Entrepreneurs Qualify for H-1B Visas?
- Can I Start a US Company Without a Social Security Number?