CANADIAN REAL ESTATE INVESTORS & U.S. IMMIGRATION: Make Sure You Can Cross That Border!
Intent is KeyIf you're stopped at the border for not having the correct "intention", immigration authorities do not have to let you enter the U.S. as a tourist. This could devastate a construction project!
To avoid this, prove your Canadian ties. The authorities are watching for business or tourist travelers who "intend to immigrate without a green card." In lay terms, they are looking for individuals who want to live in the US (not tourists) and have abandoned their residences in Canada.
To overcome the "wrong intent presumption", show as many links to Canada as possible. I tell my clients to take the "wallet test." If immigration were to go through your wallet or purse (or car or briefcase) at the border, what would they find? How many things would say "Canada" or have a "Canadian address"? How many indicate U.S. links?
As well, time in the US must be consistent with business/pleasure plans & jibe with temporary addresses. Get return transportation tickets with refund penalties.
B-1 VisitorsImmigration divides people into three categories: non-immigrants, immigrants and citizens. Non-immigrants are in the country temporarily, albeit some can stay for years. Immigrants intend to remain in the country permanently. Immigration rules only absolve immigrants and citizens of "fatal permanent intent." Almost 75% of the non-citizen U.S. population is non-immigrant and that includes millions of Canadian retirees and business people. Most Canadians entering the U.S. on temporary permission are typically visiting for business (B-1) or pleasure (B-2), available right at the border. Immigration inspectors allow Canadians up to six months per trip on temporary visitor status. Under the North American Free Trade Agreement (NAFTA), some Canadians can get B-1s for a full year.
Dramatic and Pernicious B-1 MisconceptionSome Canadians think B rules force them go back to Canada for six months before they can return to the U.S. Others think they must stay less than a total 180 days per year. In reality, there is no prohibition against leaving the country and entering again soon after. However, Canadians without a green card or citizenship cannot intend to reside permanently in the US and authorities will question the immigration intentions of those who return repeatedly without staying in Canada.
(Of course you must leave the US when your business ends, so entry must be temporary. Be prepared to show the absence of US links, that your employment is of definite duration, that the trip is a short as possible in duration and the work is intermittent. There should always be a fixed point in time where the need for services ends.)
By the way, always tell the truth at the border. Misrepresentation can bar you from the U.S. totally and forever!
B-1 Visitor RequirementsIn addition to the "temporary" requirement, here are more B-1 rules:
1. Perform services for non-US employer. For example, a salesperson can solicit orders for a foreign company or conduct a market study regarding future business in the US but the cannot actively manage an ongoing U.S. business. Real estate as a passive investment is fine, but managing a real estate development organization may produce entry problems. Immigration can let you in to start up operations, but show that you have not yet set up your US company.
2. Payment comes from and profits accrue to, Canada. The visitor cannot receive salary or payment in any form from a U.S. source. Avoid commissions tied to U.S. duties. The Canadian company should pay, in Canadian funds from a Canadian bank.
3. Job duties of acceptable nature. The visitor cannot perform tasks that local U.S. workers do. This is hard to define. It may depend on the judgment of the officer at the port. Export and import of goods is OK.
How to Get a B-1Canadians get a B-1 in these three ways:
1. Show up at the border and state the purpose of your visit. (Canadians do not have to apply for a tourist visa at the U.S. Consulate in Canada.) Once admitted, you will have B-1 or B-2 status.
2. Take a letter on your company letterhead, explaining the purpose of your travel. It should describe the purpose and travel pattern of your proposed trip.
3. Arrange for a multiple entry I-94 Arrival and Departure Record which is proof that an immigration officer at a port of entry examined you and found you qualified for business-visitor status. You can use this card for multiple border crossings until it expires. This card works, but it is hard to get. It may be easier to get a full work permit.
Border Hot Words: Avoid Additional ScrutinyGiven the high degree of discretion wielded by border authorities, Canadian real estate investors should take care to avoid problems related to the negative stigma associated with words like "foreclosure," "construction" and "renovation."
Border guards may have personal or familial experience with the foreclosure or renovation process and the construction industry has been singled out for restrictive B-1 purposes. The Bricklayer's Union actually sued immigration for being too liberal in granting B-1s to folks coming to the US for after-sales service of imported commercial equipment.
While the substance of your work may not qualify for restriction, added scrutiny might slow you down.
In some cases, this scrutiny alone may justify a temporary work permit. A real estate investor not meeting B-1 requirements can acquire a temporary work permit, the most common being the E-2 Treaty Investor; L-1 Intra-Company Transferees; TN Trade NAFTA, and H-1B Professional.
E-2 Treaty Investor Work PermitThe E-2 requirements embrace folks who have invested a substantial amount of money. You cannot, for example, have a few shares in a real estate investment deal and expect to qualify.
The application is paperwork intensive, but allows and encourages self-employment. This benefits sole proprietors or closely-held business structures. Issues arise when E-2 Canadians purchase foreclosed U.S. property and the investment amount only includes that property. The part paid for in cash or leveraged by personal assets is fine, but the part secured by business assets cannot go into the pot. That affects the "substantial" nature of the investment. Moreover, an investor with only one property used for the investor's family residence will look like a prohibited "marginal investment" providing only income for the investor and family. As much as possible, present the application as that of a real estate investment business, not saying, eg, "I'm coming to the U.S. to buy a house for my family."
L-1 Intra-company Transferee Work PermitCanadians access the L-1 at the border or by mail. A Canadian and U.S. company must have common control, continue operating outside the U.S., and have physical U.S. presence. Home offices are a notorious denial ground. Rent or buy exclusive office space even if at an executive office. The employee must have held an executive, managerial, position or specialized knowledge position with the Canadian company for a year within the three years preceding the application, and must do this work in the U.S.
Applications can be especially challenging for the construction industry because of few W2/T4 employees. Immigration likes to see managers who supervise layers of employees. Construction jobs often use subcontractors, leaving few subordinate employees. Show that the manager is a "functional manager", who does not need subordinates, and that you have a high degree of control over contractors, to mandate considering them "employees" for management purposes.
TN Trade NAFTA Work PermitNAFTA accords Canadians special TN work permit status, with no application form, within minutes of arriving at a port of entry, good for three years at a shot.
You must work in a profession on a NAFTA list. Most require a bachelor degree, but some allow for a two-year diploma and/or work experience. Show you are Canadian, in a W-2 or 1099 relationship with a U.S. entity (supporting letter) and temporary intent.
We have used a category for a Scientific Technician and Technologist (civil engineering) to acquire a TN permit for skilled construction specialists, with no license or university degree required. Interior designers, systems analysts and architects may also qualify. (These applications are tricky.)
The self-employed do not qualify. Many see this rule and give up--but the rule does not prohibit you being self-employed while in a contract with another company. If you are not a controlling owner of this other company, the other company "sponsors" and signs a letter.
TN "Management Consultants" BewarePeople who call themselves management consultants fall into the most problematic TN classification. This is the most flexible category and hundreds of Canadians work in the U.S. because of this classification, which you can get without a bachelor's degree if you have five years' experience in consulting or five years' experience in a field relating to your US job. This category applies to people with any substantive area of expertise but immigration border inspectors carefully scrutinize these applications, especially if the consulting is in sales and marketing management. Most denials flow from one of two problems with the job: it is either 1. *management*, not just *advising* (hands-on managers do not qualify) or 2. it involves advising on *technical*, not general *management* questions.
H-1 B Professional Work Permit, Green Cards, and Permanent ResidencyFolks with at least bachelor's degrees populate H-1B professions. The job does not have to fall on any specific list and one can meet the degree requirement through equivalent work experience.
Canadians coming to America to buy real estate may find a master's degree is the standard prerequisite for business jobs, meaning an H-1B work permit would require a graduate degree or an extra six years of equivalent employment experience above their bachelor's. If you seek this status, it may be to your advantage to find a technical niche in your company so that a bachelor's is sufficient.
There is a disturbing trend to bar H-1B self-employment and contract relationships.
Canadians investing in U.S. residential real estate property may also seek a permanent residency green card or dual citizenship. The EB-5 investor green card is particularly interesting. These do not have expiration dates and give you better access to U.S. financing money--most US banks require permanent residency.