Articles Posted in Immigrant Visas: Eb-1, Eb-2, Eb-3, Eb-4, Eb-5, PERM, NIW, Extraordinary Ability

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On August 6, 2014, the American Immigration Lawyers Association sent a letter to President Obama recommending administrative fixes or executive action to tweak the business immigration system in light of Congressional failure to pass an immigration reform bill. The list of recommended actions are within the realm of administrative law and existing statutes. Only Congress can change or amend statutes, including underlying visa categories, requirements and numbers. However, within the confines of those statutes, the administration, charged with carrying out the law, can make regulatory or policy fixes so long as they are consistent with statute. All federal agencies routinely issue implementing regulations and policy memos interpreting statutes and regulations. However, there is only so much the executive branch can do short of Congressional action required to change statutes. This post focuses on AILA’s recommended administrative fixes for business immigration.

Create Better Nonimmigrant Pathways for Entrepreneurs.

It has become harder for entrepreneurs to use the current immigration categories. In particular, the H-1B category requires an “employer-employee relationship” that USCIS has interpreted in a January 2010 memorandum. Historically, immigration law has treated a corporation as an entity separate and apart from its shareholders, permitting an owner-entrepreneur to found a corporation and the corporation to petition for the owner as an employee. The 2010 memorandum interprets the term “employer-employee relationship” for H-1B purposes to require the entrepreneur to give up significant control to a corporate board or to some other management entity. This is not the modern way of forming and growing start-ups. It is especially difficult if the person with the big idea and a big dream for a business is the foreign national who is forced to give up control of his or her dream. This can be a turn off to foreign entrepreneurs wanting to grow a company in the United States. AILA advocates that USCIS abandon this interpretation and adopt more flexible factors that can establish an “employer-employee relationship” that exist elsewhere in the law. This is important nationally to attract entrepreneurs. For example, in Seattle, Washington State, 19% of businesses are owned by foreign nationals (and 15% statewide).

AILA also advocates that USCIS enable more entrepreneurs to use the O-1 “extraordinary ability” nonimmigrant category and EB-1 extraordinary ability category by formally recognizing entrepreneurship as a valid basis for the O-1 and EB-1. This should include providing better information on the types of evidence that are unique to entrepreneurs that may establish eligibility for O-1/EB-1 status. Further, AILA advocates that entrepreneurship, job creation and potential economic development be recognized as favorable factors in adjudicating EB-2 “National Interest Waiver” (NIW) petitions.

Amend the Definition of “Affiliated or Related” to Provide Greater Relief from the Restrictions of the H-1B Cap.

USCIS received approximately 172,500 cap-subject H-1B petitions during the one-week April 2014 filing period for FY2015. The annual cap is only 65,000 visas (plus 20,000 for those with US Masters degrees.). These numbers are set by statute, i.e., Congress. Thus, USCIS had to hold a lottery. The H-1B program is a game of chance when the economy is growing and employers are hiring, with no predictability for employers to plan staffing. Further, there is only a one week period in April in which to file with this type of demand. Even then, if your candidate is selected in the lottery, the job cannot begin in H-1B status until the October immediately following the April filing period. What if you found your candidate in June or August or December? You’ll have to wait until the following April to file for a job that can’t begin until October! It’s outrageous! It’s hard to keep a straight face as an immigration lawyer when trying to explain the ridiculousness of this situation to a baffled employer who has found the perfect candidate to work on a project NOW.

Thus, AILA argues, until Congress fixes the numbers, USCIS could ease the high demand for H-1Bs loosening up its interpretation of cap-exempt qualifying nonprofit entities. Currently, they must be deemed to be “affiliated or related” to institutions of higher education, “through shared ownership or control by the same board or federation operated by an institution of higher education, or attached to an institution of higher education as a member, branch, cooperative, or subsidiary.” This definition is very narrow and impacts teaching hospitals and other nonprofit entities. A broader definition is needed because more universities are spinning off private start-ups including, from incubators, that help grow, mentor and nurture new businesses in our communities.
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US Citizenship and Immigration Services (USCIS) is soliciting public feedback about the EB-5 immigrant investor program until May 8, 2014. USCIS established an “Idea Community” several months ago to broaden its outreach to stakeholders on a variety of topics. In a recent EB-5 stakeholder’s meeting held April 23, 2014, USCIS said it would solicit more input about the program overall as it contemplates forthcoming regulatory changes designed to address these issues: a) combating fraud, b) improving current regulations, c) substantive eligibility requirements and d) procedural filing requirements. This is a chance to be an advocate to help shape the future of this program. To participate in the Idea Community, however, one needs to set up an account with the online system. Once logged in, look for Active Campaigns on the left, which lists the EB-5 program. Participants can start an idea thread, vote in favor or against other ideas, and otherwise provide further commentary.

A quick review of the postings shows that many of the comments have to do with delays, both for the initial I-526 petition and the I-829 petition to remove conditions, both of which are running at about 11 months. Similarly, there are complaints about the lengthy time to adjudicate regional center project applications. Other issues include requiring more oversight about transfer of funds and authentication of documents, especially from China, use of SEC FINRA and Reg D rules, documentation of job creation, need for rules about transitioning between E-2 nonimmigrant treaty investor to EB-5 permanent investor status, and the need for premium processing.

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Here at the Seattle immigration Law Office of Bonnie Stern Wasser, we enjoy working with entrepreneurs. Whether owned by Americans who seek to hire global foreign talent, or foreign nationals seeking to open or expand a business in the U.S., it is important for entrepreneurs to understand the range of business immigration options and startup visas for employees, executives and investor entrepreneurs as well as the impact they have on the local and national economy.

The Kauffman Foundation just released two new reports on immigrant entrepreneurs. The first one is The Economic Case for Welcoming Immigrant Entrepreneurs. The report confirms that immigrants make up a disproportionately higher rate of entrepreneurs than U.S. born owners of startups. A statistic from 2010 shows that 40% of Fortune 500 companies were started by immigrants or first generation Americans. In 2012, there were twice as many immigrant entrepreneurs than native-born Americans, with 27.1% of them being immigrants in 2012, up from 13.7% in 1996. Among engineering and technology companies started in the U.S. between 2006 and 2012, 25% had at least one key founder who was an immigrant.

In terms of job creation and economic impact, the Kauffman study found that:

  • “Immigrant founded engineering and technology firms employed approximately 560,000 workers and generated $63 billion in sales in 2012.
  • 24 of the top 50 venture-backed companies in America in 2011 had at least one foreign-born founder.
  • Immigrant founders from top venture-backed firms have created an average of approximately 150 jobs per company in the United States.”

In the second Kauffman report, Lessons for U.S. Metro Areas: Characteristics and Clustering of High-Tech Immigrant Entrepreneurs, the authors found that 20% of the high-tech work force is made up of immigrants, while 17.3% of high-tech entrepreneurs were immigrants between 2007 and 2011, up 13.7% percent and 13.5% percent, respectively, from 2000.

In the last decade, there was a 64% increase in the number of self-employed immigrants in high-tech industries compared to a 22.6% increase of U.S.-born self-employed founders in high-tech. Of the immigrant entrepreneurs in the study, most were working in the fields of semiconductor, other electronic component, magnetic and optical media, communications, audio/video equipment, and computer science-related sectors, with these concentrations of high-tech primarily in 25 cities (including Seattle and Portland here in the Northwest).

Foreign Entrepreneurs in Washington State
Here in Washington, another report, Washington: Immigrant Entrepreneurs, Innovation and Welcoming Initiatives in the Evergreen State by the American Immigration Council Policy Center shows:
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I had the pleasure and honor to speak on a panel about EB-1 and EB-2 permanent residence categories at the annual Northwest American Immigration Lawyers Association Conference held in Portland on February 20-21, 2014. My co-panelist, Matthew McClellan from Oregon, covered the three main subcategories in the employment based First Preference (EB-1): “extraordinary ability” foreign nationals, outstanding researchers and professors, and multinational managers and executives. I covered EB-2 PERM-based advanced degree and exceptional ability categories, as well as National Interest Waivers for advanced degree professionals and those of “exceptional ability”, plus Schedule A, Group I physical therapists and Schedule A Group II exceptional ability immigrants in the arts and sciences.

Of particular interest and enjoyment to me is working on National Interest Waiver (NIW) cases. NIW means the government will waive the usual requirement that there be a US employer, job offer, and labor market test for “willing, able and qualified US workers”. (Note that for NIW cases, although a US employer and job offer is not required, the applicant must show he/she has offers of work in the US in the field of endeavor at issue. One cannot simply meet the criteria but not plan to work in the field of endeavor.)

Congress never specified what the requirements are to meet the NIW standard, and USCIS/legacy INS never implemented regulations to define NIW requirements. But, in a precedent decision, NY Dept. of Transportation (NYSDOT), 22 I&N Dec. 215 (Comm. 1998), the Administrative Appeals Office laid out a three-part test that has been used ever since:

1. The field of endeavor or proposed work must be of “intrinsic merit.” Note, NIW cases are for work in the sciences, business and arts, all of which can be construed rather broadly.

2. Second, the work must be national in scope. This can be tricky where the work to be performed is strictly local or will have just local impact.

3. The third and hardest prong of the NYSDOT test is to show that it is in the national interest to waive the labor market test (labor certification or “PERM”). Stated otherwise, it is not in the national interest to require PERM because the applicant provides a “significant benefit to the field of endeavor”; has a “past history of demonstrable achievement with some degree of influence on the field as a whole;” and is likely to “serve the national interest to a greater extent than others with the same level of education, training and/or experience.”

In sum, the applicant’s past impact on the field of endeavor should be proven such that it is highly predictive the applicant will continue to make a future impact on the field. Further, it is not enough to show a shortage of workers in the field because that is what PERM is for – to test the US labor market. Nor is it enough to show the applicant has a unique set of skills. Indeed, it is important to show through experts or peers in the field that the person has made some significant contributions to the field such that he or she is likely to do so again in the future. Keep in mind that PERM is about finding applicants who meet the MINIMUM qualifications listed in the job opportunity. Here, we are focused on major or significant contributions already achieved. (By contrast, extraordinary ability workers and outstanding professors and researchers must show a higher level of achievement: original contributions to the field or international achievements.)

If the NIW standards can be met, it applies to individuals in the professions with at least advanced degrees (masters or higher depending upon the field) OR to those who are of “exceptional ability.” A person is of exceptional ability if the applicant can prove “a degree of expertise significantly above that ordinarily encountered in the sciences, arts or business.” Further, persons of exceptional ability must show they will “substantially benefit prospectively the national economy, cultural or educational interests or welfare of the USA.”

This standard would be in addition to the third prong for the NIW noted above. To prove exceptional ability, the applicant must show at least three of the following criteria:

– Academic records related to the field of exceptional ability – At least 10 years of full time experience in the occupation for which the foreign national is being sought – License to practice the profession if required – Salary/remuneration demonstrating exceptional ability – Membership in professional associations – Recognition for achievements and significant contributions to the industry or field – Other comparable evidence

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USCIS recently issued a new final regulation that goes into effect on February 1, 2013 specifying that Immigrant Visa recipients must pay a new and additional “Immigrant Fee” of $165.00. Applicants who receive Immigrant Visas at US consulates and embassies abroad will be required to pay the new fee online before they travel to the US. See www.pay.gov. The $165.00 fee covers the cost of green card production and other visa related services by USCIS associated with State Department visa processing.

Once an Immigrant Visa is issued on or after February 1, 2013, the visa holder has six months to use the visa to enter the US. Upon admission with the visa, a plastic green card is received within a few days to a couple of weeks. The individual arrives at the border with a package from the State Department that will now include a notice about payment of the fees or a receipt for having previously paid the fees. Although failure to pay the fee will not stop a person from being admitted into the US as a new permanent resident, the actual green card production will be held up until the fee is paid. Fees must be paid out of a US bank account and are to be paid online.

Exempt from the Immigrant Fee are Hague Convention adoptees. Stay tuned for more details about how to make this payment.

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Today, USCIS held an engagement session about developments in its Entrepreneurs in Residence initiative (EIR). Director Alejandro Mayorkas, his senior counsel and others on his staff attended. The EIR initiative is an attempt by USCIS to have adjudicators better understand the entrepreneurial space.

Key developments thus far include the following:

1. The EIR Tactical Team has trained small groups at the various USCIS adjudications service centers.

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The US Department of Labor (DOL) recently released its FY2012 year to date statistics covering October 1, 2011 to June 30, 2012 concerning the use of H-1B visas and PERM, the labor certification program for permanent residence. Here are a few key stats from the report:

H-1B Use

The H-1B report shows that 278,737 applications were received YTD. 287,165 were processed. Of those, 243,098 were certified, and 16,346 were denied. The balance were withdrawn. These covered 577,298 positions. (A labor condition application can cover multiple people for the same position if all the requirements, duties and pay will be the same.) Keep in mind that despite the 65,000 annual cap and 20,000 additional spots for graduates with US masters degrees and higher, many positions are not subject to the cap, such as positions at nonprofit and government research institutions, affiliated positions at such sites, and at institutions of higher education.

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In a rare case of bipartisan action, Congress passed legislation to add E-2 visas to the list of Treaty Investor countries. Historically, Israelis have only been able to use the E-1 Treaty Trader visa, but not the E-2 Treaty Investor visa. E-1 visas require a primarily Israeli owned US company engaged in substantial trade in goods or services between the US and Israel. Otherwise, Israelis have had to use the EB-5 permanent residence investor program, L or H visas depending upon the scenario. On June 8, 2012, President Obama signed into law H.R. 3992. The House version of the bill was sponsored by Rep. Howard Berman (D) from Los Angeles. A similar bill passed the Senate (S-921). E-2 nonimmigrant visas are available for foreign investors and some of their employees (executives/managers and “essential skill employees”) who also have citizenship of the treaty country (but do not have US citizenship or green cards). The US company must be at least 50% owned by nationals of the treaty country. Israelis have invested $58.5 billion into the US between 2000 and 2010 and conducted $26.9 billion in trade between our two countries in 2011 alone.

The E-1 Treaty Trader/E-2 Investor visas require that Americans be treated similarly when investing or trading in counterpart countries. The E-2 visas are not yet in effect, as Israel and the US work out the details.

The E-2 visa differs from the permanent residence EB-5 entrepreneur investor program. Advantages of the E-2 visa are that there are no specific dollar amounts required for investment nor specific numbers of jobs to be created. The visa is available to the person(s) directing and developing the investment as well as to treaty nationals who are managers/executives or have “essential skills.” Investment amounts depend upon the nature and type of the business and the proportion being invested to the total amount needed to buy, start and/or operate the business. E-2 visa holders can come and go, which may be advantageous for tax purposes compared to needing to stay in the US permanently in EB-5 status. The visa can be renewed indefinitely so long as the company and investors/employees continue to qualify. By contrast, the EB-5 program is for permanent residence and requires either a minimum $500,000 or $1,000,000 investment by the actual investor needing the green card. The investment must create at least 10 jobs over a two-year conditional residence period, with a lot of rules governing job creation. However, there is no requirement that the EB-5 enterprise be owned by a certain nationality. Depending upon the facts of the case, in theory, an E-2 investor could transition over a period of time to qualify for EB-5 permanent residence down the road. There are many other features of both visa types not mentioned here. More information about E-2s for Israelis can be found on the website for the US Embassy in Tel Aviv.

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So sorry to my readers for not posting lately. As Chair of the Washington Chapter of the American Immigration Lawyers Association (AILAWA), I have been very busy the last few weeks writing letters, testifying and attending meetings before the Washington State legislature on several immigration related bills since our fair state decided to get into the immigration business this year. I was also in Washington, D.C. where together with AILA colleagues, we visited the members of the Washington Congressional Delegation to advocate for immigration reform. While in D.C., I also attended the AILA quarterly Board of Governors and AILA Chapter Chairs meetings. Meanwhile, our chapter held its annual Northwest continuing education conference in Portland, Oregon, hosted by the Oregon AILA chapter where I spoke on a panel about the fall-out of the Kazarian case dealing with the evidentiary standards for Employment Based Extraordinary Ability workers, and the new Request For Evidence templates and policy memorandum concerning visas for crème de la crème workers. Now I’m getting ready for our annual AILA national conference coming up in June in San Diego where I will be speaking on consular processing of family based visas. In between all of this, I have had to focus on client work. So, with that as background, I’m going to catch up with some more articles on a variety of topics, as there is never a shortage of news on immigration and citizenship issues.

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In a December 3, 2010 letter to Senator Patrick Leahy, U.S. Citizenship and Immigration Services (USCIS) Director, Alejandro Mayorkas, stated that indirect jobs created by individual investors in an EB-5 regional center may in fact be created outside the geographical boundaries of the certified regional center. The letter sets out USCIS’s interpretation from earlier case law that the job-creating businesses themselves must be located within the regional center’s geographic limits, and that recent amendments to the EB-5 program require that “each regional center …provide a proposal that ‘clearly describes how the regional center focuses on a geographic region of the United States.'” USCIS interprets this to mean that the regional center must focus its “EB-5 capital investment activities on a single, contiguous area within the defined geographic jurisdiction requested by the regional center.” Director Mayorkas concludes that “we agree that the law does not further mandate that all indirect job creation attributable to a regional center take place within that jurisdiction.”

The business plan for the EB-5 regional center seeking initial approval or certification is critical, however. It lays the road map for how the center plans to proceed including the economic analysis to determine how the new jobs will be created. USCIS will adjudicate EB-5 regional center applications, amendments and annual reports as well as individual investor applications on the basis of that business plan. Therefore, it is essential that if the economic model being used anticipates job creation outside the geographic limits of the regional center, that this be reflected in the business plan for the center.

Two recent changes effective November 23, 2010 concerning regional centers include the release of a new form I-924 used for regional center designation applications. A new form I-924A was also introduced for annual reporting of the regional center activities. This form has to be filed annually between October 1 and December 29. There is also a new filing fee of $6230.00 for initial regional center applications. The I-924 should also be used for amendments to 1) the geographic region, 2) the business plan, 3) organizational structure, 4) affiliated entities, 5) changes in the economic analysis to predict job creation, 6) or changes to capital investment instruments or offering memoranda. When providing an exemplar of future individual EB-5 I-526 applications, the I-924 should also be submitted.