Many highly-skilled workers from France are currently living in the U.S. holding E (Treaty Investor/Trader) Visas or L (Intracompany Transfer) Visas. The spouses of these E and L visa-holders are now allowed to apply for work authorization. This relatively new law opens the door for the spouse of the E or L visa-holder to establish a new business in the U.S. that can later sponsor the visa-holding spouse.

By way of background, France is a country that participates in certain international agreements with the U.S. that must be considered before a French national begins the process of opening a business or branch office in the U.S. In addition to immigration issues, the French entrepreneur must also consider U.S. tax rules, estate planning, and state and local business regulations, among other regulations.

Follow up:

Visa Waiver Status
Even those who only have a temporary “visa waiver” may be able to open businesses in the U.S. Because France is a “visa waiver” country, a French visitor need not apply for a visitor’s visa from the U.S. Embassy before coming to the U.S. However, the visitor will be questioned about the reasons for his/her visit upon entry into the U.S., and can only stay up to 90 days per visit. A stay under the visa waiver cannot be extended.

An even better alternative to the 90-day visa waiver is to apply for a B-1 visitor’s visa at the Embassy. This visa will allow a visit of six months in the U.S., and can be renewed while in the U.S. for another six months. After the one year, the entrepreneur must return to France and apply for the E or L visa.

A person in visitor status is not authorized to work in the U.S. However, in many cases, it may be the only non-immigrant status with which a French entrepreneur can gain access to the U.S. during the pre-incorporation phase of starting a business in the U.S. A visitor from France is permitted to engage in commercial activities for his/her own enterprise that do not result in the performance of productive labor. Permissible activities include negotiating the purchase of a business or entering into contracts related to the new business, as well as other non-work related commercial activities. In other words, the French visitor should not be actively managing the running of a business nor be paid in the U.S. He or she may actually set up the business, but cannot run it while in visitor status. For example, an entrepreneur from France who already owns a business in France can come to the U.S. in visitor status, establish a subsidiary relationship with a U.S.company by acquiring at least 51% of the stock of the U.S. company, and, in this way,lay the foundation for a future L or E visa. The visitor must be careful to abide by all the restrictions and agreements inherent in visitor status. It is a delicate balancing act.

The L-1 Visa
The L visa (also called the “Intracompany Transfer Work Visa”) usually has a maximum of about seven years. It has definite usefulness for the foreign entrepreneur, especially if the entrepreneur is married. Often, the L-1 visa holder is transferred to the U.S. as an executive or senior manager of a multinational company. The L visa is also available to entrepreneurs who are coming to the U.S. to open a branch, subsidiary, or affiliate of his/her own small, privately-held company. The company can be owned by just a few people or even wholly owned by the entrepreneur. If the entrepreneur has performed the early stages of corporate formation abroad, and has established a foreign entity that will continue to operate, he/she may seek to establish a new office in the U.S. with the L visa. As with the E-2 visa (discussed below) the Immigration Service is looking for viable business entities before it will grant a visa for a foreign entrepreneur.

The E-2 Visa
France is a “treaty country” for the purposes of the E-2 visa. Of all the non-immigrant work visas, the E-2 visa is probably the most useful for the foreign entrepreneur. The applicant must own at least 51% of the company and be either the manager or an executive, i.e., someone with the background or capacity to make the business viable. The E visa is also available for employees who have the same nationality as the E-2 visa holder and who will work as either executives or supervisors. The Immigration Service will grant E-2 visas in cases where the enterprise is “active”, i.e., has the present or future capacity to generate income that is not exclusively for the purpose of generating a token living for the entrepreneur or his/her family. Business plans, job creation, and other evidence of business growth must be demonstrated. The E-2 enterprise need not be fully established, but it needs to be established at least partially in order to be considered “active.” Establishing an “active” enterprise cannot be accomplished on non-immigrant visas because they do not allow for work outside of the visa restrictions. However, with the “spousal advantage” discussed below, an “active” enterprise can be achieved.

The Spousal Advantage
As discussed above, the great advantage of both the E and L visas for small business entrepreneurs is that the spouses of E and L visa-holders have the right to apply for work authorization. Unlike their E and L spouses, whose work visas restrict them to specific employers and specific salaries, the spouses of E and L visa-holders can start up companies on their own, and later the new companies can sponsor the E and L visa-holding spouses. This is the kind of flexibility that every foreign enterprise needs for its initial start-up. The Immigration Service prefers a business that is established and viable, and the spousal advantage is an ideal way to have the company up and running in time to sponsor the E or L visa holder before his/her visa runs out.

The spouses of E and L visa-holders can prolong the family’s stay in the U.S., sponsor skilled workers from France and other countries, and take advantage of the tax breaks available to the self-employed, as well as other immigration and financial benefits. However, before embarking on a new enterprise in the U.S., it is strongly advised that the entrepreneur seek the advice of an immigration attorney, a corporate/business attorney, and a certified public accountant.

Written by Kathleen Lord-Black, Immigration/Corporate Attorney
Tel: (415) 205-5601 - www.kathleenlord.com