Recent Blog Posts

Obtaining the EB-1 Green Card from L-1 Visa is Not Possible for Most Small Businesses

Anthony Olson — Wed, 01 Feb 2012 23:49:00 GMT

Many businesspeople, who plan to maintain a business in their home country, have started a small business in the U.S. with the plan to obtain permanent residence through the EB-1 Multinational Manager and Executive category. However, the vast majority of such people fail to reach the goal of obtaining permanent residence in this category. Why? The general answer is that USCIS’s decision track record in the EB-1 permanent residence and L-1 visa categories indicates that it believes that only the employees of large corporations are worthy of the green card in the EB-1 category, and eligible for extensions in the L-1 visa category. Owners and managers in small businesses need not apply. The specific answer is that in order to qualify, a manager must be at the head of a large managerial hierarchy with several levels of management between him or her and the front-line employees, including having multiple departments. The larger the staff and more complex the hierarchy, the better the manager’s chances of L-1 renewal and permanent residence through the EB-1 permanent residence category.

The case depends primarily on the very subjective and arbitrary determination by the USCIS examiner about whether the immigrant is performing a job that is “truly executive or managerial in nature.” USCIS examines this in light of the job duties stated in the petition, but also in light of how many employees work under the immigrant in the company’s managerial hierarchy. There need to be at least 2-3 levels of management between the immigrant and the front-line workers. Best case, also with several departments, each with a head, multiple levels of management and then the front-line workers at the bottom. If the hierarchy is viewed like a tree, then the immigrant’s chances of success are greatest if their hierarchy is shaped like a broad live oak tree with many limbs, branches, and leaves, than like a palm tree with a narrow trunk and a couple of levels of branches between the top and bottom.

There is no magic threshold number of employees that will make or break the case. That being said, I would figure on having no less that 10 employees, since USCIS does not want to undermine the EB-5 category by making the EB-1 category a cheap alternative to the EB-5 category. It is a matter of numbers and structure: a manager with a complex, multi-departmental structure with 10 employees might qualify, while a manager with 20 employees, but only 1-2 managers between him and 1-19 front-line employees would likely not qualify.

Sophistication of the business is important, as well. A business with a more sophisticated business activity and higher-skilled and educated workers is also more likely to succeed than a business involving low or unskilled labor. For instance, a small technology firm (still preferably with more than 10 employees) filled with university graduates has much greater chances than a lawn care business with unskilled workers (and likely a very un-departmentalized structure).

Although the statutes and regulations for the L-1 and EB-1 categories provide for “functional managers,” in practice, USCIS does not accept the functional manager concept, and so a manager without subordinates and a whole hierarchy beneath him or her has very slim chances of success.

Another factor for an entrepreneur to consider are the hidden costs of what, at first glance, appears to be a cheaper alternative to an investment of $500,000 to qualify under the EB-5 category. Most business owners under the L-1/EB-1 scenario end up dragging down the foreign business from not being able to devote enough time and supervision to it, while trying to build up and maintain the U.S. business. At the same time, if the U.S. business does not meet with initial success, it can bleed the entrepreneur financially, particularly in light of the fact that high staffing levels must be maintained just in order to hold onto the L-1 visa while building up to the point when the immigrant entrepreneur can apply for permanent residence.

When an investor entrepreneur establishes a new business in the U.S., he can obtain the L-1 visa for only 1 year, and is not eligible to apply for permanent residence under the EB-1 category until the business has been in existence for at least 1 year. In order to extend the L-1 at the end of the first year, the entrepreneur must have created at least 5+ jobs in order to have a chance at extending the L-1 visa. If he or she succeeds in extending the L-1 visa, then the clock is still ticking because the L-1 can be extended only up to a maximum of 7 years for an L-1 manager. Seven years seem like a long time, but it is not a long time for building a business large enough to employ 10+ workers. This is particularly the case if the business owner encounters obstacles such as an economic downturn or a shift in demand in the market, given that many products have a life-cycle of just a few years, particularly if they involve rapidly evolving technology.

The L-1/EB-1 multinational manager route is advisable just for those entrepreneurs who have already planned to expand their existing business into the U.S. market, have conducted extensive market research on the feasibility of succeeding on the U.S. market, and have plenty of additional financial resources to see the project through to successful completion in spite of inevitable obstacles and setbacks. Many entrepreneurs come to the U.S. with unrealistic expectations of what they can accomplish. Often they underestimate how competitive the U.S. market is. Alternatively, they think that the lack of a certain good on the U.S. market means that people will immediately realize what they have been missing and buy it, rather than understanding that there are a lot of resourceful businesspeople in the U.S., and if consumers were interested in that good, then someone else would already be selling it to them.

The L-1/EB-1 path to permanent residence can be travelled successfully, but the entrepreneur must be realistic, well funded, persistent, and possibly just lucky to be offering the right good or service at the right time and location.

How Much Time Must a Permanent Resident or Conditional Permanent Resident Spend in the U.S.?

Anthony Olson — Fri, 06 Jan 2012 12:19:00 GMT

This is the question commonly asked by people who are considering whether to apply for permanent residence in the U.S. There is no one size fits all answer to this question. Moreover, the issue and question should be framed instead in terms of how much time can a legal permanent resident ("LPR") or a conditional legal permanent resident ("CLPR") spend outside the U.S. without losing the LPR or CLPR status.

It is standard procedure for Customs and Border Protection ("CBP") inspectors to ask LPR's and CLPR's returning from abroad how long they were away. This seemingly harmless question can snowball into the person losing his or her LPR or CLPR status in the U.S. based on the idea that the person has "abandoned" the LPR or CLPR status. If the LPR or CLPR has been away for more than 1 year, then that is irrefutably considered abandonment. If the LPR or CLPR has spent more than 1 month outside of the U.S. at one time, the CBP officer might inquire further as to whether the person ever established residence in the U.S., and if so, whether the person is maintaining the residence in the U.S. The more months that a person is away, the greater the likelihood of a challenge of this sort. If the CBP officer is not satisfied that the the LPR or CLPR has established and/or maintained residence in the U.S., then he or she would present the LPR or CLPR with the choice of renouncing the LPR or CLPR status and being admitted to the U.S. as a non-immigrant or facing a removal procedure and going before an immigration judge. In the event that the LPR or CLPR would be ordered removed by an immigration judge, or would depart from the U.S. after the commencement, but before the conclusion, of removal proceedings, then that person would be subject to a 5-year bar from returning to the U.S. This is, therefore, a serious matter.

What kind of evidence can the LPR or CLPR submit in order to counter such a challenge by the CBP officer?

Evidence of employment and/or business activity in the U.S.

Evidence that the spouse and children are living in the U.S., that the spouse is employed or engaging in business in the U.S., and that the children are attending school/university or working/engaging in business in the U.S.

Evidence of filing tax returns in the U.S. as a resident.

Evidence of maintaining a house, condominium, apartment, automobile(s), etc. in the U.S.

Evidence of maintaining bank accounts, credit card accounts, health insurance, automobile insurance, life insurance, membership in clubs or organizations in the U.S.

Personal, business, or government correspondence received at the U.S. address.

In case the LPR or CLPR does not have this evidence on hand at the time of admission and the CBP officer is not showing any indication of relenting in this challenge, then the LPR or CLPR should try to reason with the officer to allow for a deferred inspection, which would give the LPR or CLPR the opportunity to gather and present the above-mentioned evidence of establishing and maintaining residence in the U.S. at a follow-up interview at a designated CBP office in the area where the LPR or CLPR lives.

In the case of a married couple immigrating under the EB-5 program, if one of the spouses will still need to travel abroad frequently on business, it would be a good idea for the spouse, who will spend more time in the U.S., to be the investor, and as such the "anchor" for the family who would have less exposure and vulnerability to challenges by CBP officers. In general, if a EB-5 investor and his family are not ready to move to the U.S., then the investor and family should hold off on immigrating under the EB-5 program until they are ready to move to the U.S. However, one should also bear in mind that it currently takes around a year in order to obtain conditional permanent residence in the U.S. under the EB-5 program. Plus, if the investor and family are obtaining an immigrant visa through the consulate, the immigrant visa is valid for 6 months, and so it gives them additional time to rearrange their affairs in the country of origin prior to moving to the U.S.

The bottom line to remember is that LPR or CLPR status in the U.S. are a "use it or lose it" proposition.

Premium Processing for the EB-5

Anthony Olson — Mon, 22 Aug 2011 05:13:00 GMT

The Director of USCIS, Alejandro Mayorkas, announced on May 19, 2011, a proposal to implement premium processing of cases under the EB-5 program. The significance of premium processing is that it is a program under which USCIS, in return for an additional fee of $1,225, currently, commits itself to deciding the case, or taking further action on the case by requesting additional evidence, within 15 days. There was a public comment period for the proposal that ended on June 17, 2011. On August 2, 2011, Director Mayorkas announced that within 30 days, USCIS will take the first step to implement premium processing for the EB-5 program. This does not mean that the program will be available then, but rather that USCIS will finish the first of multiple steps directed toward implementing premium processing for the EB-5 program.

An EB-5 investor's ability to file the I-526 petition with premium processing will depend on the regional center, in which he or she invested, obtaining USCIS's approval of its project ahead of time under the application procedures for the I-924 application. The I-924 application is currently used for obtaining approval of a regional center designation or of an amendment to an existing regional center designation. However, under the new procedures, either an entity that is just applying for its designation as a regional center could also present a project for approval of its eligibility for premium processing, or an existing regional center could apply to have its latest project approved as eligible for premium processing. A crucial factor in determining whether a project would qualify as eligible for premium processing is the extent to which work under the project can begin right after approval of the EB-5 investors' I-526 petitions, at which point the investment funds are normally released to the regional center's project. If the project is ready to that extent, then the regional center can opt to pay the additional fee for premium processing for the I-924 application, which would result in a processing time of 15 days. Otherwise, for such projects, if the regional center does not opt for premium processing, USCIS would, nevertheless, commit itself to a processing time of no more than 2 months. If the project is not ready to this extent, or the project is still only hypothetical, then the processing of the I-924 application could take up to 5 months or longer.

Once USCIS gives EB-5 investors the option to use the premium processing service for their I-526 petition, this will be a tremendous benefit to EB-5 investors from multiple perspectives. First, this will constitute a considerable improvement over the current processing time of 6-8 months for a decision on the I-526 petition. Second, there will be greater certainty that the I-526 will not be denied due to the regional center's project, since it will have been approved under the I-924 application process. Third, the availability of premium processing will improve EB-5 investors' chances to complete the process to obtain conditional permanent residence prior to the sunset of the EB-5 Immigrant Investor Pilot Program, which is the EB-5 program for the regional centers, on September 30, 2012. Fourth, for those EB-5 investors with a specific need for faster processing, such as those who are already living in the U.S. under a visa that will soon expire, or those EB-5 investors living outside of the U.S. who have plans to get their kids into school or university by a certain starting date, have a job offer in the U.S. with a certain starting date, or have other urgent plans to move to the U.S., the premium processing option for the I-526 petition will be tremendously beneficial.

When will premium processing of the I-526 petition become available? In remarks during the USCIS EB-5 Stakeholder Meeting on June 30, 2011, Director Mayorkas explained that premium processing will be phased in after USCIS accomplishes several steps in preparation. He stated, then on August 2, 2011, that the first step in implementing premium processing of the I-526 petition, will occur within 30 days of August 2, 2011. The remaining steps will presumably be accomplished over the coming weeks and months. Even once premium processing becomes available, regional centers will have to go through the process of applying for approval of their project to make it eligible for premium processing. Therefore, it will take an additional 15 days to 2 months for regional centers to obtain approval of projects that they can offer them as eligible for premium processing. So, we are looking at several months, at least, before premium processing will become effectively available to the public.

Please keep checking back on our website for further updates on the progress toward implementation of premium processing for I-526 petitions.

Which immigrants can most benefit from the EB-5 program?

Anthony Olson — Sun, 20 Mar 2011 20:54:00 GMT

H-1B workers, L-1 workers, and F-1 students

The long employment-based green card backlog waiting time combined with increasing uncertainty in an existing job and in the prospect of obtaining a new job are causing tremendous anxiety among young professionals and students from abroad. This problem is particularly acute for those H-1B visa holders who are reaching the six-year limit on their H-1B visa. If the H-1B visa holder is one year into the process of applying for permanent residence, then he or she can apply for extensions beyond the six-year limit in one-year increments. If the H-1B visa holder has an approved labor certification and an approved I-140 petition, then he or she can obtain extensions in three-year increments. However, once the H-1B visa holder goes beyond the six-year limit, if he or she is laid off, then the ability to extend the H-1B visa is gone, and unless the person can qualify for a different visa such as an O-1, E-1, E-2, or TN visa, then it becomes necessary to leave the U.S. and wait outside for a year in order to restore H-1B visa eligibility.

Even if the H-1B visa holder manages to hold on to the job and the green card sponsorship, how many years will it take to get the green card after all of the years of waiting? 6, 8, 10 years perhaps? If you are an Indian or Chinese professional with an advanced degree, no matter that you have the advanced degree, due to your country-specific green card backlog in the EB-2 category, you are barely better off than your fellow countrymen with just a bachelor’s degree. Misery loves company in the “from now until forever” backlog waiting line.

For F-1 students, the current economy has created an unwelcoming job market, particularly at a time when there are many highly qualified U.S. citizens and permanent residents available for hire, who do not need H-1B visa sponsorship. In some cases, students are even having a difficult time to find an employer even just to maintain eligibility to remain in the U.S. for the 12- to 27-month Optional Practical Training period, let alone to find sponsorship for an H-1B visa or the green card.

With the help of the EB-5 program, people in these anxiety-filled situations can go to the head of the line for the green card. The EB-5 program has its own separate annual quota of 10,000 green cards that has not yet come close to being exhausted, and so there is no backlog waiting line. The only delay is the approximately one year that it takes to go through the EB-5 immigration process. Once the EB-5 investor obtains conditional residence, after that approximately one-year processing time, he or she has all of the rights and benefits of a permanent resident, which means he or she is no longer dependent on the existing U.S. employer, or on finding employment with a U.S. employer, and can even go into business for himself/herself. This means freedom, more career options, competing on equal terms with U.S. citizens and permanent residents in the labor market and business world, and security that one can stay in the U.S. As long as the EB-5 investor maintains his or her investment in a regional center that follows through with its business plan that has the effect of creating 10 jobs per investor, then the EB-5 investor will also receive permanent residence after the two-year conditional residence period.

E-2 investors, E-1 traders, L-1 transferees

Often people come to the U.S. under an E-2 investor visa, E-1 trader visa, or an L-1 transfer visa based on operating their own business in the U.S., or as a manager or specialist in such a business, but then get stuck on the “visa renewal merry-go-round.” In other words, they keep living their lives in fear of not getting their visa renewed the next time it comes up for renewal. Employees who have no ownership in the company have at least the possibility of being sponsored by the employer for the green card, albeit with a waiting period of 7-10 years through the green card quota backlog. The owners of such businesses, who are in the U.S. on a temporary visa, do not even have this option, at least not through their own company. Business owners, or their spouses with a work authorization, can find sponsorship with third-party businesses. The spouse with a work authorization can at least work for the sponsor, but the business owner does have to continue working for his or her own company until obtaining a work authorization in connection with the green card process before working for the sponsoring company; however, the work authorization in connection with the green card process comes only after the long green card backlog waiting period once it becomes possible to apply for adjustment of status.

Once again, all such sponsorship is subject to the 7-10 year backlog waiting period, unless the person has an advanced degree, and can qualify in the EB-2 category for advanced degree professionals (and is not from India or China, which have a backlog in this category, as well). Also, all such sponsorship is subject to the requirement of proving that there is no able, willing, qualified, and available U.S. worker for the job, which has become very difficult to accomplish in the current job market. Alternatively, if the person has extraordinary ability in the sciences, arts, education, business, or athletics, it is possible to skip the labor certification and there is no green card quota backlog.

Many or most people do not qualify for any of the above-mentioned green card options, and so they are stuck. For those who have the economic means to invest under the EB-5 immigrant investor program, that has become a welcome option for escaping the “visa renewal merry-go-round” and the green card quota backlog. The EB-5 green card category does not require any labor certification, does not require extraordinary ability, and it has an annual green card quota that has never been exhausted, and will not be exhausted for the foreseeable future.

P-1 Athletes and Performing Artists

USCIS can be very difficult and arbitrary in deciding who makes the cut in qualifying for a green card for extraordinary ability. There are many successful professional athletes and performing artists whom USCIS would not approve as having extraordinary ability, since USCIS has arbitrarily set the standard for extraordinary ability so high. Particularly if the athlete or performing artist has achieved sufficient financial success to make a $500,000 investment, then the EB-5 immigrant investor program can be the fallback plan if the person is not approved in the EB-1 extraordinary ability category.

For those of you who are wondering how you can come up with the money to make the necessary $500,000 investment, please see our blog posting on the different sources from which EB-5 investors can derive the investment funds.