INVESTMENT ARTICLE and TERMS USED IN PETITIONS

SMALL BIZ -- COVER STORY Taken from JUNE 18, 2001 Business Week


Online Extra: Coming to America

For aspiring entrepreneurs the world over, America is the land of opportunity. But first, there are visa requirements to be satisfied

ENTREPRENEURS: Coming to America By Naween Mangi

Of the 1 million immigrants who settle in the U.S. every year, many  will start businesses at a greater rate than native-born residents. First of all, they have uprooted themselves from their native land for a myriad of reasons, perhaps for family unity, the most common reason, perhaps to flee oppression, or perhaps to find opportunity in the land of the free. 

It is understood that these adventurous new immigrants have greater entrepreneurial tendencies in part because they are young and they are willing to takes risks.  They are highly motivated to make something of their lives and are ambitious to taste the joy of freedom and a new land.  These are the same traits that typify successful entrepreneurs.

Initially, most immigrant start up traditional mom-and-pop retail establishments, which demand long hours and little capital. But more immigrant entrepreneurs are starting “New Economy” businesses in high-technology and service industries. To make their companies succeed, they often tap into networks of their fellow countrymen or employ workers back in their homeland.

Immigrants also bring investment capital with them. The number of intra-company transfer visas, the L-1 visa, issued to investor-entrepreneurs since 1970, has more than tripled over the past decade, from 14,342 in 1990 to 54,963 last year, according to State Department figures.

The L-1, however, is just one avenue for would-be immigrant entrepreneurs dreaming of an American business experience. There are many other special visas.

Figuring out which might apply to an individual's situation, however, is to wade through an alphabet soup. BusinessWeek Small Biz asked immigration lawyer William Z. Reich, of Buffalo , (N.Y.)-based Serotte, Reich & Seipp, to explain some of the more popular visa options for immigrant entrepreneurs. Each has its own unique qualifications, and their duration varies. Only two of the nonimmigrant visas explained below, the L-1 and the H1b visa, are convertible to a green card.

B-1 -- VISITOR FOR BUSINESS:
Who Can Use It: People who are coming to the U.S. to investigate business opportunities.
To qualify: You must demonstrate that you have strong commitments in your home country and do not intend to settle here. Such criteria include an existing business in your home country, employment there, ownership of property, and family ties back home. You should also have documentation to prove you have an itinerary of meetings with businesses or brokers here in the U.S.
Duration: The B-1 grants admission for up to one year with a six-month extension.

E-1 -- TRADER'S VISA:
Who Can Use It: Businessmen and women intending to engage in trade between their home countries and the U.S. in accordance with a treaty involving bilateral commerce.
To qualify: Your home country must have such a treaty with the U.S. and your company must do more than 50 percent of its trading with a U.S. Corporation.
Duration: It varies by treaty, but is typically granted for periods of between two and five years.

E-2 -- INVESTOR'S VISA:
Who Can Use It: Investors who have invested substantially in a U.S. corporation - meaning that they now control and direct that concern. The investment can be for the purchase an existing business or start a new one. This visa is also based upon treaties between the U.S. and other countries.
Duration: typically two to five years.

L-1 -- INTRA-COMPANY TRANSFER VISA:
Who Can Use It: This is best for entrepreneurs who have an existing business abroad and want to set up a U.S. operation. Unlike the E-1 or E-2, the L-1 can be converted to the green card after one year of successful business in the U.S.
How To qualify: The applicant must form an active company, acquire office premises in the U.S,. and use financial documentation to prove affiliation.
Duration: a maximum of seven years.

H1-B -- SPECIALTY OCCUPATION (PROFESSIONAL) VISA:
Who can Use It: immigrants who want to get work experience in their industry before starting up their own businesses, or entrepreneurs who want to hire skilled workers from their home country.
To Qualify: must be skilled ,specialized employees who are going to work at a specific company.
Duration: Three years, plus a three-year extension.

TERMS USED - DEFINITIONS

 Trade -- definitions. For purposes of this paragraph: Items of trade include but are not limited to goods, services, international banking, insurance, monies, transportation, communications, data processing, advertising, accounting, design and engineering, management consulting, tourism, technology and its transfer, and some news-gathering activities. For purposes of this paragraph, goods are tangible commodities or merchandise having extrinsic value. Further, as used in this paragraph, services are legitimate economic activities which provide other than tangible goods.

Trade is the existing international exchange of items of trade for consideration between the United States and the treaty country. Existing trade includes successfully negotiated contracts binding upon the parties which call for the immediate exchange of items of trade. Domestic trade or the development of domestic markets without international exchange does not constitute trade for purposes of section 101(a)(15)(E) of the Act. This exchange must be traceable and identifiable. Title to the trade item must pass from one treaty party to the other.

Substantial trade is an amount of trade sufficient to ensure a continuous flow of international trade items between the United States and the treaty country. This continuous flow contemplates numerous transactions over time. Treaty trader status may not be established or maintained on the basis of a single transaction, regardless of how protracted or monetarily valuable the transaction. Although the monetary value of the trade item being exchanged is a relevant consideration, greater weight will be given to more numerous exchanges of larger value. There is no minimum requirement with respect to the monetary value or volume of each individual transaction. In the case of smaller businesses, an income derived from the value of numerous transactions which is sufficient to support the treaty trader and his or her family constitutes a favorable factor in assessing the existence of substantial trade.

 Principal trade between the United States and the treaty country exists when over 50 percent of the volume of international trade of the treaty trader is conducted between the United States and the treaty country of the treaty trader's nationality.

Investment. An investment is the treaty investor's placing of capital, including funds and other assets (which have not been obtained, directly or indirectly, through criminal activity), at risk in the commercial sense with the objective of generating a profit. The treaty investor must be in possession of and have control over the capital invested or being invested. The capital must be subject to partial or total loss if investment fortunes reverse. Such investment capital must be the investor's unsecured personal business capital or capital secured by personal assets. Capital in the process of being invested or that has been invested must be irrevocably committed to the enterprise. The alien has the burden of establishing such irrevocable commitment. The alien may use any legal mechanism available, such as the placement of invested funds in escrow pending admission in, or approval of, E classification, that would not only irrevocably commit funds to the enterprise, but might also extend personal liability protection to the treaty investor in the event the application for E classification is denied.

 Bona fide enterprise. The enterprise must be a real, active, and operating commercial or entrepreneurial undertaking which produces services or goods for profit. The enterprise must meet applicable legal requirements for doing business in the particular jurisdiction in the United States .

Substantial amount of capital. A substantial amount of capital constitutes an amount which is:

     Substantial in relationship to the total cost of either purchasing an established enterprise or creating the type of enterprise under consideration;

     Sufficient to ensure the treaty investor's financial commitment to the successful operation of the enterprise; and

     Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise. Generally, the lower the cost of the enterprise, the higher, proportionately, the investment must be to be considered a substantial amount of capital.

Marginal enterprise. For purposes of this section, an enterprise may not be marginal. A marginal enterprise is an enterprise that does not have the present or future capacity to generate more than enough income to provide a minimal living for the treaty investor and his or her family. An enterprise that does not have the capacity to generate such income, but that has a present or future capacity to make a significant economic contribution is not a marginal enterprise. The projected future income-generating capacity should generally be realizable within 5 years from the date the alien commences the normal business activity of the enterprise.

 Solely to develop and direct. An alien seeking classification as a treaty investor (or, in the case of an employee of a treaty investor, the owner of the treaty enterprise) must demonstrate that he or she does or will develop and direct the investment enterprise. Such an applicant must establish that he or she controls the enterprise by demonstrating ownership of at least 50 percent of the enterprise, by possessing operational control through a managerial position or other corporate device, or by other means.

Executive and supervisory character. The applicant's position must be principally and primarily, as opposed to incidentally or collaterally, executive or supervisory in nature. Executive and supervisory duties are those which provide the employee ultimate control and responsibility for the enterprise's overall operation or a major component thereof. In determining whether the applicant has established possession of the requisite control and responsibility, a Service officer shall consider, where applicable:

(i) That an executive position is one which provides the employee with great authority to determine the policy of, and the direction for, the enterprise;

(ii) That a position primarily of supervisory character provides the employee supervisory responsibility for a significant proportion of an enterprise's operations and does not generally involve the direct supervision of low-level employees, and;

(iii) Whether the applicant possesses executive and supervisory skills and experience; a salary and position title commensurate with executive or supervisory employment; recognition or indicia of the position as one of authority and responsibility in the overall organizational structure; responsibility for making discretionary decisions, setting policies, directing and managing business operations, supervising other professional and supervisory personnel; and that, if the position requires some routine work usually performed by a staff employee, such functions may only be of an incidental nature.

 Special qualifications. Special qualifications are those skills and/or aptitudes that an employee in a lesser capacity brings to a position or role that are essential to the successful or efficient operation of the treaty enterprise. In determining whether the skills possessed by the alien are essential to the operation of the employing treaty enterprise, a Service officer must consider, where applicable:

(i) The degree of proven expertise of the alien in the area of operations involved; whether others possess the applicant's specific skill or aptitude; the length of the applicant's experience and/or training with the treaty enterprise; the period of training or other experience necessary to perform effectively the projected duties; the relationship of the skill or knowledge to the enterprise's specific processes or applications, and the salary the special qualifications can command; that knowledge of a foreign language and culture does not, by itself, meet the special qualifications requirement, and;

(ii) Whether the skills and qualifications are readily available in the United States. In all cases, in determining whether the applicant possesses special qualifications which are essential to the treaty enterprise, a Service officer must take into account all the particular facts presented. A skill that is essential at one point in time may become commonplace at a later date. Skills that are needed to start up an enterprise may no longer be essential after initial operations are complete and running smoothly. Some skills are essential only in the short-term for the training of locally hired employees. Under certain circumstances, an applicant may be able to establish his or her essentiality to the treaty enterprise for a longer period of time, such as, in connection with activities in the areas of product improvement, quality control, or the provision of a service not yet generally available in the United States . Where the treaty enterprise's need for the applicant's special qualifications, and therefore, the applicant's essentiality, is time-limited, Service officers may request that the applicant provide evidence of the period for which skills will be needed and a reasonable projected date for completion of start-up or replacement of the essential skilled workers.
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