Camera di Commercio Industria Artigianto e Agricoltura di Torino U.S. Business Forum Business Immigration Overview November 16, 2015 Clara DeMatteis Mager James C. Bruno Butzel Long a Professional Corporation 150 West Jefferson Avenue, Suite 100 Detroit, Michigan 48226 313-225-7000 mager@butzel.com Bruno@ butzel.com
Labor Issues on Transfers Maintain Employment Duties in Italy Maintain an Employment Agreement with current Employer Execute Secondment Agreement between Entities Execute Employment Agreement with U.S. Entity 2
Expatriate Structures Contractual Relationships Secondment Agreement U.S. Company Home Country Employment Agreement Home Company Local Country Employment Agreement Employee Secondment Agreement A. Establishes relationship between companies. B. Responsibility and control of employee (important for Permanent Establishment issue). C. Intercompany payment liability. D. Responsibility for withholding and paying taxes. Host Company and Home Company Employment Agreements A.Identity of Employer and reporting relationship there will be by law a dual employment relationship. B.Dates of employment match Visa dates. C.Title and duties match Visa. D.Restrict Powers in home country on behalf of foreign entity top avoid P.E. E.Compensation salary and bonus (based on U.S., home country, worldwide, or other performance metrics). (Where paid?) F.Benefits list available on request. 3
Immigration Issues in M&A 1. Existing visas or pending visa applications can be affected a) Transfer petitions prior to closing? b) Amend application? c) Beneficiary no longer eligible. 2. Show all current employees authorized to work. a) Due Diligence on current employees (Forms I-9). b) Possibly new paper work required as of closing. 3. Must Determine a) Structure of the deal. b) Timing of closing affecting pending applications. c) Risks of assuming liability for past immigration violation s. 4. Including Immigration matters in the Due Diligence Requests and as representations to Stock of Asset Purchase Agreements 4
Background Information Basic Division of U.S. Business Immigration Law: Nonimmigrant Status - All temporary classifications (Visitors for business/tourism (B-1/B-2), students/trainees (F-1, J-1, H-3), and work authorized statuses (E-1/E-2, H-1B, L-1A/L-1B, O-1, TN)) Immigrant Status - Lawful Permanent Resident ( LPR ), also referred to as Green Card Holder - Employment-Based Immigration (Multinational Executive/Manager (EB-1), Outstanding Researcher (EB-1), PERM Alien Labor Certification (EB-2 and EB-3)) U.S. Citizenship Also referred to as Naturalization 5
Background Information Common Terms: Visa Issued by DOS / U.S. Embassy or Consulate abroad Generally requires sponsorship by employer Time period in U.S. is limited Generally requires intent to return abroad Note: The Visa does not control FN s status in U.S.; allows for application for entry to U.S. and supports admission to specific nonimmigrant classification upon arrival *A Visa may expire, but FN may still be legal in U.S. *If Visa expires and international travel required, FN will need new Visa to return to U.S. (with limited exceptions e.g. Automatic Visa Revalidation) 6
Background Information Common Terms: I-94 Card Previously Issued by U.S. Customs and Border Protection ( CBP ) at U.S. Port of Entry ( POE ), via land, air or sea travel Generally now available after entry on-line and printable Generally correlates with Visa expiration (depends on type) Time period in U.S. is limited on I-94 record Expiration date controls FN s authorized stay in the U.S. Note: The expiration date of the I-94 can be restricted to the earlier expiration of FN s passport if passport close to expiring, recommend renewal/extension prior to arrival in U.S. 7
Common Nonimmigrant Business Classifications B-1 Visitor for Business TN Trade NAFTA L-1 Intracompany Transferees H-1B Workers in Specialty Occupations H-2 Temporary Workers H-3 Temporary Trainees E-1 Treaty Trader E-2 Treaty Investor O Aliens of Extraordinary Ability in Science, Arts, Education, Business or Athletics 8
B-1 Visitor for Business Nonimmigrant intent Cannot abandon foreign residence Specific plans and duration in U.S. Adequate funds for duration of stay in U.S. Documentation of ties to home country Activities must qualify under B-1 criteria for business purpose other business visas permit productive labor 9
B-1 Visitor for Business Business purposes examples Business meetings, negotiate contracts, litigation Conferences, conventions, seminars Soliciting orders Observe U.S. company/culture Exposure to U.S. business/english language No productive labor (including substantial management) is permitted Possible B-1 can be issued in lieu (substitute) of H-1B and other nonimmigrant business visas if all compensation is from abroad and all other requirements of the other visa satisfied. Limited to six months. Must be noted on visa. Fraud issues. 10
B-1 Visitor for Business Note: If foreign national is eligible for Visa waiver program or already has valid B-1/B-2 visa, then an invitation letter from U.S. company articulating reason for trip, duration and other items required by B-1 business status can be drafted for foreign national to present at Port of Entry to support entry 11
U.S. Visa Waiver Program There are 38 countries (e.g., Italy) that participate in the Visa Waiver Program (VWP) WB (similar to B-1) or WT (similar to B-2) Status All visitors traveling to the U.S. under the VWP, must have a machine-readable passport or e-passport ESTA Registration Required 12
B-1/B2 Visa Waiver Currently, 38 countries participate in the Visa Waiver Program, as shown below: Andorra United Kingdom New Zealand Australia Hungary Norway Austria Iceland Portugal Belgium Ireland San Marino Brunei Italy Singapore Czech Republic Japan Slovakia Chile Latvia Slovenia Denmark Liechtenstein South Korea Estonia Lithuania Spain Finland Luxembourg Sweden Switzerland France Malta Taiwan Germany Monaco U.K. (Excluding Territories) Greece Netherlands ESTA (Electronic System for Travel Authorization) registration required prior to travel. 13
L-1 Nonimmigrant Visas Qualifying Organization (Enterprise Entity) Type of entity irrelevant Parent, affiliate, branch, or subsidiary of U.S. petitioner Doing business as an employer in the U.S. and abroad for the duration of the foreign national s stay in U.S. Joint Ventures less than 50% but control may qualify for entity JV New U.S. company - for less than one year - heavily scrutinized by USCIS; 5 Year Business Plan, one year visa Employment with an acquired Enterprise Entity is counted 14
L-1 Nonimmigrant Visas Employees who qualify: Executives (L-1A) Managers (L-1A) (of employees or function ) but not front line of nonprofessionals Employees with Specialized Knowledge of Employer (L-1B) (currently difficult) Conflicting court decisions Generally more than 50% of time as executive or manager Employee must have been continuously employed abroad full time for one year within last three years prior to entry to U.S. Temporary travel to the U.S. during the one year does not interrupt the one year Employment with U.S. does not need to be compensated (e.g., Board Member) and can be part time Restrictions on job shop L-1B assignments (e.g., engineers working at customer locations not primarily under employer control and supervision 15
L-1 Nonimmigrant Visas Validity: L-1A maximum stay is 7 years L-1B maximum stay is 5 years L-1 visas are generally issued for 5 year period Extensions of stay are granted in two year increments L-2 spouse can obtain permission to work /EAD Blanket L authorization if $25,000,000 in U.S. sales after one year 16
Overcoming Common Obstacles L-1 Intracompany Transferee L-1A Multinational Manager: Burden of proof requires employer to establish proposed position in U.S. will be performed in a managerial or executive capacity. Can be a traditional or functional manager position: Traditional manager position requires employer to provide evidence the employee will directly supervise and control the work of supervisory or managerial employees or members of a profession (e.g., architects, engineers, lawyers).» Can qualify as professionals if meets definition used for H-1B purposes, i.e., if employees supervised have bachelor s degrees or equivalent, and their positions require the degree awarded. Functional manager position requires employer to provide evidence the employee will manage an essential function of a department, company or organization as a whole (e.g., IT, accounting, legal). 17
Overcoming Common Obstacles L-1 Intracompany Transferee (continued) L-1B Specialized Knowledge: Burden of proof requires employer to establish the employee possesses specialized knowledge under a totality of the circumstances test. Documentation to establish the employee possesses specialized knowledge may include: Training records or certificates Performance reviews or appraisals Curricula or training manuals Knowledge of company-specific product, processes or procedures Often difficult to meet burden of proof. Preparing a business plan for a new office L-1: Not required, but would be helpful to provide. Business plan should include a timetable for each proposed action for the first year of business. 18
A Recent Request for Evidence for L-1(B) on Petition Filed by other Counsel Inadequate proof of relationship between entities Inadequate proof in layman's terms duties request special knowledge of petitioners product, reviews, etc. [or advanced level of knowledge] Inadequate proof beneficiary has the required knowledge Inadequate proof of one year employment abroad Inadequate proof of qualification or use of special or advanced knowledge abroad Inadequate proof of management or specialized knowledge position abroad Inadequate proof of control by U.S. petitioner of employee at customer s location 19
E Nonimmigrant Visas E-1/E-2: Treaty Trader/Investor Common Features: Treaty /Agreement exists btw U.S. & foreign country (includes Italy) At least 50% ownership and control nationality requirement except publically held Establish components of Trade (E-1) or Investment (E-2) Cannot be a marginal enterprise (more than support of owner) Requires 5 year business plan 20
E Nonimmigrant Visas Benefits of E-Visa Application may be made at consulate Prior USCIS authorization not necessary and not binding on consulate Employee not required to have prior experience with treaty company Visa issued for up to five years, renewable indefinitely, Admissions in 2-year increments Extensions can be granted upon re-entry E-2 Spouse is permitted to work/ead E-2 Children can attend school 21
E-1/E-2 Treaty Trader/Investor E-1 Treaty Trader to support existing international trade of goods and services, 50% or more between the two countries E-2 Investment or process of investment of at risk of substantial investment (adequate to fund cash flow requirements) Foreign National Employee Investor, supervisors, executive, possesses skills essential to the efficient operations of the enterprise, professional in a specialty occupation 22
Overcoming Common Obstacles E-2 Treaty Investor Nationality requirement for U.S. entities: Privately held entities: Determined by nationality of individual owners of entity. Nationals of treaty country must own at least 50% (with control)of the U.S. entity.» If an entity in turn owns another entity, nationality must be traced to point of establishing at least 50% ownership with respect to the parent entity.» Evidence should include passport ID pages and entity ownership documents. Publicly traded entities: Country of formation is irrelevant. An entity where shares or interests are sold exclusively on a stock exchange is presumed to have nationality in the country where the exchange is located.» Burden of proof requires U.S. entity to provide best available evidence to overcome this presumption where there is more than one stock exchange or a majority is held privately. 23
Overcoming Common Obstacles E-2 Treaty Investor (continued) Essential skills requirement for foreign nationals: Burden of proof requires U.S. employer to show: 1) The employee possess specialized skills; and 2) Such skills are needed by the U.S. entity. To assess the foreign national s essentiality and specialized skills, U.S. employer should consider: 1) Degree of proven expertise of the foreign national in the area of specialization; 2) The uniqueness of the specific skills; 3) The function of the job to which the alien is destined; and 4) The salary such special expertise can command. 24
Overcoming Common Obstacles E-2 Treaty Investor (continued) Preparing a 5 year business plan: Requirements are consulate-specific, and not all consulates require a business plan. Check consulate website for guidance: U.S. Consulate in Rome website:» Not listed as a required exhibit: Do not include brochures, photographs, or business plans that contribute little or nothing to the value of your case. U.S. Consulate in Frankfurt website:» Listed as a required exhibit: Business plan including a five-year forecast in a Profit/Loss format (one page), tax returns for the past 2 years (if an existing company) and a yearto-date profit/loss statement. The plan must verify the capacity of the enterprise to realize a profit within a maximum of five years. 25
H-1B Nonimmigrant Status Specialty Occupation Position requires minimum of Bachelor s Degree or equivalent Foreign national has (relevant) Bachelor s Degree or equivalent 6 Years total period of stay (with exceptions) H-4 Spouse may be permitted to work/ead 26
H-1B Nonimmigrant Status H-1B Quota or Cap is exhausted for Fiscal Year 2016 (October 1, 2015 to September 30, 2016) Fiscal Year 2017 (October 1, 2016 to September 30, 2017) 65,000 new H-1Bs available for foreign nationals 65,000 number does not include 20,000 H-1Bs for foreign nationals with Master s Degrees or higher from U.S. institutions ( Masters Cap ) H-1B Petitions can be filed on April 1, 2016 for Fiscal Year 2017 beginning October 1, 2016 27
Overcoming Common Obstacles H-1B Specialty Occupation Position offered to the employee must qualify as a specialty occupation position. Burden of proof requires employer to establish by a preponderance of the evidence that the position offered requires: 1) Theoretical and practical application of a body of highly specialized knowledge; and 2) Attainment of a bachelor's or higher degree in the specific specialty (or its foreign equivalent) as a minimum for entry into the occupation. To qualify as a specialty occupation, the position must require a precise and specific course of study, which relates directly and closely to the position in question. Experience may substitute and/or supplement formal education requirement to meet burden of proof. 28
Nonimmigrant Visa Application Home country issuance First visa usually obtained at U.S. Consulate in home country U.S. Consulate procedures differ Appointment and personal appearance required Third country issuance Only certain nationals eligible Mostly in Canada or Mexico A visa may be required to enter Mexico or Canada (or the 3 rd country) 29
Immigrant Classifications Three routes to the green card Employment Family Government Note: If possibility exists for family-based LPR process (i.e., marriage to U.S. Citizen), generally a quicker & smoother process than employmentbased 30
1. Government 2. Family 3. Employment Immigrant Visa Immigrant Visa Immigrant Visa *Diversity Visa (DV) *Form I-130 (Filed with USCIS) *Asylum *Establish Familial Relationship, (e.g., spouse, child, parent, sibling) * Labor Certification *Form I-140 (Filed with USCIS) *Establish Employer/Employee Relationship * Employer can pay employee s wages * Employee Qualifies for position Green Card Application -Adjustment with USCIS if in U.S. - Consular processing with Consulate if outside U.S. 31
Employment-Based Green Cards Three steps generally required: Alien Labor Certification ( PERM ) * Employer files application with DOL, after recruiting, to show no U.S. workers able, willing, available and qualified for position offered to foreign national I-140 Immigrant Petition for Alien Worker * Employer Files with USCIS based on DOL certification Adjustment of Status or Consular Processing of Immigrant Visa ( Green Card ) * Foreign National files with USCIS based on I-140 petition approval, or concurrently with employer s I-140 petition 32
Employment-Based Green Cards Important factors to determine processing time for green card: Nationality of foreign national Employment-Based Preference Priority date Date Labor Certification is filed or Date I-140 Immigrant Petition is filed 33
Employment-Based Green Cards Important factors to determine processing time for green card: Nonimmigrant status approaching end of maximum period of stay FN has dependant children who may turn 21 before approval ( Age-Out ) General Long term plans for FN Note: Plan at least two years ahead to avoid losing work authorization for employee 34
Employment-Based Green Cards Five Preferences listed in the monthly Department of State ( DOS ) Visa Bulletin STATUS ITALY INDIA First Preference (EB-1) Current Current Second Preference (EB-2) Current 1/1/12 Third Preference (EB-3) Current 10/15/11 Fourth Preference (EB-4) Current Fifth Preference (EB-5) Current 35
First Preference (EB-1) Persons of extraordinary ability in the sciences, arts, education, business or athletics Outstanding professors and researchers Multi-national executives and managers * No Labor Certification required for EB-1 36
Extraordinary Ability (EB-1) Evidence of a one-time achievement or major award OR Evidence of at least three of the following criteria: Nationally or internationally recognized prizes/awards Memberships in associations requiring outstanding achievement in field Published material about foreign national in professional or major trade publication or other media Participation as judge of the work of others in the field Original contributions of major significance in field Authorship of scholarly articles in professional or major trade publications 37
Extraordinary Ability (EB-1) Extraordinary Ability criteria continued Artistic exhibitions or showcases Performance of a leading or critical role for organizations or establishments with distinguished reputation High salary or other high remuneration for services in relation to others in the field Commercial success in the performing arts Other comparable evidence 38
First Preference (EB-1) Persons of extraordinary ability in the sciences, arts, education, business or athletics Outstanding professors and researchers Multi-national executives and managers * No Labor Certification required for EB-1 39
Multi National Managers and Executives (EB-1) Qualifying relationship between U.S. and foreign employer Foreign national employed in a managerial or executive capacity abroad one out of the three years prior to transfer Position in U.S. is managerial or executive 40
Multi National Managers and Executives (EB-1) Executive criteria: Directs the management of the organization or major component or function; Establishes goals and policies; Exercises wide latitude in discretionary decision making; and Receives only general supervision or direction from higher level executives, board of directors or shareholders 41
Second Preference (EB-2) Advanced degrees (PhD, Master s Degree or Bachelor s Degree plus five years of post baccalaureate progressively responsible experience) Aliens of Exceptional Ability * Labor Certification required * National Interest Waiver is possible 42
Third Preference (EB-3) Professional Workers: Position requires U.S. Bachelor s Degree or foreign degree equivalent Skilled Workers: Position requires at least two years of training or experience Other Workers: Position requires less than two years of training or experience 43
PERM Labor Certification Position requirements determine if position qualifies for EB-2 or EB-3 Education: Bachelor s, Master s, PhD Degree Number of years of experience Employer s specific skills and/or experience requirements Job Zone Specific Vocation Preparation (SVP) 44
Immigration Not Easy Every detail of the Application must be supported. See Petition Table of Contents. The law is complex. The Cliff Notes or guida allo studio is over 2,000 pages of fine print. Causes for delay is preparation of application package: Tracing capital contribution Business Plan Get help if you need Changes in business planning A Request for Evidence ( RFE ) is sometimes issued by government instead of a denial The government officials reviewing a matter may be new or the petitioner may have done a poor job 45
Table of Contents for an E Visa Petition (not a new business) 46
Immigration Issues in U.S. Expansion by Acquisition Key Employees may have visas or be beneficiaries of U.S. visas Changes in beneficiary employment (Asset Purchase Agreement) can affect visas Changes in ownership (Stock Purchase Agreement) can affect visas Alternative to a current visa to a new visa status (e.g., from L-1A to E-2) can have long rate effects There may be undisclosed immigration violations (potential fines) Perform due diligence Obtain a representation and warranty in the APA or SPA Prepare and file notice amendments and new petitions at or before closing 47
Questions? 1554970