Trumping Trump: Moving Founders to the US in 2020

Jennifer Schear, Founding Partner of Schear Immigration Law Firm | Reading Time: 6 min.

Anyone who has been involved in a U.S. relocation process over the past three years has probably asked themselves the following question – is this guy playing with a full deck? Whether or not you support Trump and his immigration policies, you’ll need to play by his rules when it comes to securing work visas for startup founders. According to statistics published by United States Citizenship and Immigration Services (USCIS), the rate of requests for evidence (RFE) and petition denials reached unprecedented highs for H-1B and L-1 petitions during the first three quarters of FY 2019 alone. These stats are hard to digest when your CEO needed to get to the US yesterday. Nevertheless, the majority of well-funded startups are able to transfer their head honchos to the US with careful planning and strategizing. 

This article is intended to help startups navigate the US immigration system in 2020 by providing tips based on current trends and insights into what lies ahead with the most popular US work visas for founders. 

L-1 Intracompany Transfers

The L-1 visa is one of the most utilized work visas for multinational managers, executives and specialized knowledge employees transferring from a foreign entity to a related US entity. It’s one of the classic ways to send founders to the US to establish and oversee a newly formed company so long as they have 12 months of full-time and continuous employment at the Israeli entity within the 3 years preceding petition filing. In most cases, this means being a salaried employee of the Israeli entity, although providing full-time and exclusive consulting services may also fulfill this requirement.   Tip: Any time spent in the US during the qualifying period does not count towards fulfilling the 12 months abroad requirement. Deduct the time spent in the US and wait until you have 365 days of physical presence outside of the US before filing the petition. Founders beware of frequent business trips! USCIS will count the days!

H-1B Specialty Occupation 

Often referred to as the “hi-tech visa” the H-1B program allows for the employment of foreign workers in occupations which require at least a bachelor’s degree in the specific specialty, or its equivalent. The H-1B program is subject to annual quotas of 65,000 (bachelor’s degree) and 20,000 (US advanced degree) respectively. Each year, USCIS conducts a random lottery process for selection of cap-subject petitions. Tip: In FY2021 and for the first time ever, USCIS will implement an online registration tool to streamline the process. Startups looking to hire foreign talent can register candidates for the lottery for a minimal $10 fee during the registration period of March 1-20, 2020. With this new process, employers will save on legal fees and will have more predictability regarding US staffing! 

E-1 Treaty Trader and E-2 Investor 

E visas are awesome! These consular based work visas are based on treaties of friendship, commerce, and navigation and allow companies to avoid complicated and document intensive petition filings via USCIS. The E-1 visa is intended for Israeli companies/individuals engaged in significant trade with the United States. The E-2 visa which became effective in March 2019 is intended for Israeli companies/individuals who are investing significant capital into a US entity which is majority owned by Israeli nationals. Tip: 50% Israeli ownership must be maintained. This means that if your cap table changes due to a round from a foreign (non-Israeli) VC the E-1 or E-2 visa will become automatically invalid. Startups seeking additional funding need to think carefully before applying for E visas! 

O-1(A) Extraordinary Ability

The O-1A visa for individuals of “extraordinary ability” in the sciences, education, business, or athletics, is a great option for rock star founders with a proven track record of sustained international acclaim and success in their field of endeavor. While simply founding a company or two will not cut it for the O-1, founders who meet at least 3 out of the 8 criteria listed here may qualify. Tips: (1) Securing significant venture capital funding for your company from top tier investors counts as a “lesser internationally recognized award”; (2) Serving in 8200 or other top IDF unit relating to your field of endeavor counts for “membership in an association which requires outstanding achievements of its members”; and (3) Being a founder and/or CEO of a company that was acquired or went public counts as “employment in a critical or essential capacity for organizations that have a distinguished reputation”. If you checked “V” on these, you may be eligible for an O-1 visa! 

So, What to Expect in 2020?

While there’s no way of knowing for certain how the cards will fall until after the next election, there are some early indications of what to expect in 2020. In November 2019, USCIS published a proposed rule, which if implemented, would impact upon startups and other businesses. Here are the key takeaways for startups:

  • Significant increases to USCIS filing fees for the most heavily utilized visas in the tech industry:

  • Premium processing - 15 business days (proposed) vs.15 calendar days (current).
  • Increased scrutiny of L-1 and H-1 “third party” worksite placements. 
  • Revised definition of H-1B “specialty occupation” 
  • Revised definition of L-1B specialized knowledge and employer-employee relationship.

In addition to the above proposed rule, and as a result of various changes which took effect during 2019, startup founders should continue to expect lengthy processing times for applications for dependent family member extensions of stay (I-539) and EAD (Employment Authorization Document) for certain dependent spouses. Tip: In order to minimize a potential gap in employment for dependent spouses due to lengthy processing times, submit EAD extensions on the earliest possible date – 6 months prior to expiration of the current EAD. Processing times for EAD’s reached a record high of 8 months during 2019!  

In short, startups need to be more vigilant than ever in planning their immigration processes to ensure that their founders don’t get lost in the shuffle!

Jennifer Schear is the Founding Partner of Schear Immigration Law Firm, a boutique immigration firm in Tel-Aviv. SI represents Israeli and foreign corporations ranging from Start-Ups through publicly traded companies in securing work authorization for key personnel. SI works closely with local hi-tech accelerators and incubators and the international venture capital community with regard to corporate immigration issues and compliance strategies.

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