Owners of Multinational Companies: Stuck Between a Rock and Bad Policy

A few days ago, an owner of a multinational company approached us about obtaining U.S. permanent residency.  This person has a successful company in another country, and that company now has a subsidiary in the U.S.  The U.S. company is growing and hiring U.S. workers.

The owner, who also manages both businesses but currently resides in another country, now wants to live in the U.S.  He wants to reside in the U.S. and help his U.S. subsidiary grow even faster.

Under U.S. immigration laws, this should be no problem, right?

Not so fast.  Let’s review his options.

Can his own company in the U.S. sponsor him for permanent residency through the PERM labor certification process?

No.

For a company to sponsor an employee through the PERM process, they must advertise the position to see if there are available U.S. workers for the job.  Therefore, a legitimate job opening must exist.

In this situation, since the person has a substantial ownership interest in the U.S. company, the Department of Labor (DOL) will deem that a legitimate job opportunity does not exist.  Basically, the company and the ‘employee’ are one in the same.

What about the Employment-Based One Category (EB-1) for Multinational Executives and Managers?  He is an Executive and Manager of a Multinational company, so this category should work, right?

Not right now.

In the past, it would have.  But as we wrote in a recent blog article, the U.S. Citizenship and Immigration Service (USCIS) has been applying the Neufeld Memo’s definition of the employer-employee relationship to these types cases as well.

In order for a company to sponsor a multinational manager or executive, it must prove that an employer-employee relationship exists and the employer has to the right to fire the employee.  If the employee also holds a significant ownership interest, the USCIS position is that the employer-employee relationship does not exist.  Therefore, company sponsorship is not possible in this EB-1 category.

How about the Employment-Based Five (EB-5) category for foreign investors?  Since the owner of this company is also investing in it, this should work, right?

It depends.

This category requires the foreign investor to invest 1 million U.S. Dollars (USD) (or $500,000 in a rural area) of his/her own cash (no loans) in a company that creates 10 full-time jobs (5 full-time if in a rural area) for U.S. workers.

Unfortunately, this individual does not meet the 1 million USD threshold.  His U.S. subsidiary, however, will likely have 10 U.S. workers within the next year.  But since the monetary investment in the U.S. company isn’t even close to 1 million USD, this category will not work.

What are his other options?

He does not qualify under the EB-1 Extraordinary Ability or Employment-Based Two (EB-2) National Interest Waiver categories either.  Those categories are for people who have reached the top of their fields.  In the business category, has this individual reached the level of a Bill Gates or Warren Buffett?  Not yet.

Anything else?

No.

What we have here is a U.S. immigration policy that prevents this individual, an entrepreneur who created a U.S. subsidiary of his foreign company, invests in the U.S. and creates U.S. jobs, from immigrating to the U.S. as a permanent resident.  In a time when we have high unemployment and a weak economy, is this the immigration policy that our government should endorse?

No.  But unfortunately, it does.

Our government should encourage foreign entrepreneurship and investment in the U.S., not prevent it and send it elsewhere.  As a country we need to change our immigration policies in these areas, and the time to do it is now.

 

Tags: EB-1 Multinational Executives and Managers, Multinational Executives, Multinational Managers