Best Tips for Entrepreneur H-1B Petitions
Despite the well-documented success of foreign national entrepreneurs in the U.S., U.S. immigration law is often not particularly welcoming to foreign nationals who wish to start their own companies. Recently, USCIS has made some efforts to promote the use of the H-1B category in the entrepreneurial context.
Foreign national entrepreneurs have historically been an engine for the US economyI was an active entrepreneur during one phase of my career. I have first hand experience with job creation and building a thriving business. I fully appreciate the value foreign national entrepreneurs create and add to the U.S. economy. I enjoy assisting foreign national entrepreneurs with their immigration status options. Despite the well-documented success of foreign national entrepreneurs in the US, US immigration law is often not particularly welcoming to foreign nationals who wish to start their own companies. Recently, USCIS has made some efforts to promote the use of the H-1B category in the entrepreneurial context. Also, USCIS has a web portal for foreign national entrepreneurs (Entrepreneurial Pathways). The H-1B visa is the most common nonimmigrant temporary employment visa. The H1B visa is for professional occupations; and, generally, with at least as U.S. baccalaureate degree, or foreign equivalent. The H-1B visa is an employer-petition visa. Generally, USCIS has been rigid not approving H-1B petitions from employers where the beneficiary-employee is also the majority owner. As a result, it has long been difficult to secure approval of an H-1B petition for an employee who is also the company's majority owner. Recently, USCIS has provided better guidance for establishing a bona fide employer-employee relationship.
Neufield Memo & USCIS guidance on employer-employee relationships in H-1B petitionsIn 2010, USCIS issued the Neufield Memo Guidance on Employee-Employer Relationships in H-1B Petitions that addressed the employer-employee relationships in the H1B context. The Neufield memo required H-1B petitioning employers to establish a bona fide employer-employee relationship where the employer retains the right to control the employee. The employer-employee relationship was problematic in the IT consulting field. Under the Neufeld memo's guidance, it has been almost impossible to demonstrate an employer-employee relationship, if the H-1B petition beneficiary was also the company's majority owner. USCIS published a Question and Answer document on H1B Employer-Employee relationships in August 2011, indicating it is willing to accept the existence of an H-1B employer-employee relationship, even if the prospective H-1B employee owns a majority share of the company, as long as it can also be shown that there is some external check on the employee's authority.
Documenting A Bona Fide Employer-Employee Relationship When the H-1B Beneficiary Is Also the Majority Owner of the EmployerOne example of an acceptable "external check on the majority owner-employee's authority" is a bona fide board of directors that has the right to hire, fire and control the pay of the majority owner-employee. "... [I]f the petitioner provides evidence that there is a separate Board of Directors which has the ability to hire, fire, pay, supervise or otherwise control the beneficiary's employment, the petitioner may be able to establish an employer-employee relationship with the beneficiary." In its Entrepreneurial Pathways (web portal for entrepreneurs) USCIS provides additional discussion concerning documenting a separation between a company and its owner to establish an employer-employee relationship for H1B petitions: "If you own your company you may be able to demonstrate that an employer-employee relationship exists if the control of your work is exercised by others. For example, if your company has a board of directors, preferred shareholders, investors, or other factors that show your organization has the right to control the terms and conditions of your employment (namely the right to hire, fire, pay, supervise or otherwise control the terms and conditions of your employment), then you may be able to meet this requirement." Throughout 2014, USCIS has been more receptive of H-1B petitions submitted by company's where the majority owner is an employee, provided the petition documents the employer-employee relationship is bona fide, which, admittedly, requires a good deal of planning and documentation.