Immigrant visa: the $1 million investment

This article wants to highlight some of the most utilized visa categories for foreign real estate investment and the investors or companies engaged in it.

Different visa categories are available depending on the individual's country of origin, whether the real estate investment will be passive or active, the intended duration of stay in the United States and the possibility to directly or indirectly earn money from a U.S. source.

1. The Visa Waiver Program (VWP)
Depending on the country of origin, no visa might be required to simply buy, sell, own, or lease real estate as an individual as long as this activity does not reach commercial proportions.

If the investor comes from a visa waiver country, he does not need a visa to enter the United States for a maximum of 30 to 90 days at a time. The only requirements are a machine readable passport and a return or onward ticket. The applicants will be photographed and fingerprinted when seeking admission. The participating countries are currently: Andorra, }\v.stralia, Austria, Belgium, Brunei, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Irel{a1d, Italy, Japan, Lativia, Liechtenstein, Lithuania, Luxembourg, Malta, Monaco, the Netherlands, New Zealand, Norway, Portugal, San Marino, Singapore, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, and the United Kingdom. There is no black law, but if the immigration authorities deem that a person spends too much time in any given year or in a period of time in the United States, entry can be refused to that individual. Once entry on a visa waiver has been refused, the Applicant can only reenter the United States if in possession of a valid visa. Thus, the visa waiver is suitable only for short vacation or business trips.

2. B visas
If the investor is not a citizen of a country that participates in the visa waiver pilot program or intends to remain in the United States for up to six (6) months, a B-1 "business visitor" or B-2 "extended tourist" visa might be the right choice.

a) B-1Overview

The B-1 "business visitor" visa allows an individual to come to the U.S. for a short period of time for purposes that include the following:

• engaging in meetings and consultations with U.S. business associates attending non-productive training for the benefit the overseas company
• attending professional conferences or seminars

A B-1 visitor is not authorized to perform productive work in the U.S. and must maintain a foreign residence to which the B-1 visitor intends to return at the end of the authorized period of stay. The B-1 status may not be used as a means to accelerate a candidate's eligibility to enter the U.S. to work. The B-1 entrant will generally remain on a foreign employer's home country's payroll and cannot receive compensation from a U.S. source, other than reimbursement for incidental expenses.

The B-1 visa is applied for directly at the U.S. Embassy or Consulate. 8-1 visa holders are generally admitted for the period of time necessary to conduct the business. In theory, a B-1 entrant may be admitted up to a maximum of six months. However, in practice, immigration officers typically allow business visitors to remain in the United States for no more than 30-90 days. If unexpected events necessitate an extension, individuals may apply to extend the authorized period of stay up to six (6) months. However, prolonged business visits may give rise to a presumption that the visitor is engaged in prohibited productive employment.

b) B-2 Overview

The extended tourist visa is normally issued by the foreign U.S. Consulate for ten (10) years and allows a tourist to remain in the United States for up to six (6) months at a time. This visa is used by many foreigners who own holiday residences in the United States. Typical examples are the so called "snowbirds" that leave Europe to spend the winter months in Florida. However, even if the visa holder never overstayed, too frequent visits to the U.S. may at some point become a problem and will be asked to return with a more permanent visa.

If the investor intends to engage in active real estate investments that are connected with an ongoing business activity and from which he derives revenues, the investor needs a visa category which allows longer periods of admission and the authorization to directly or indirectly earn money from a U.S. source.

The most used visa in this category is the E-2 treaty investor visa for citizens of a country that has a Treaty of Commerce and Navigation with the United States. However, many Latin American and former Soviet Union countries do not yet have such treaties in place with the U.S.

3. Treaty Investor visa

The E treaty investor visa allows an individual to come to the U.S. for the purpose of furthering a substantial investment in a U.S. enterprise made by individuals or businesses that are citize ·s of a treaty country.

a) Requirements

At least 50% of the U.S. entity must be owned by nationals of the treaty country in or4er to qualify to utilize E visas. In order for a business to qualify, the company must demonstrate that a substantial instment in the U.S. business has been made by individuals or companies that are citizens of the treaty country. Irr order to be considered a substantial investment, the funds must be "at risk". Whether the actual amount invested is substantial depends on the type of business and is weighed based upon a variety of factors. In addition, the investment must not be "marginal", i.e. not made solely for the purpose of earning a living.

Ownership. The Principal Investor needs at least 50% ownership of the investing company and the nationality of the treaty country.

Active investment. The investor must have made an irrevocable commitment of funds into an active·, commercial investment.

Substantial investment. Only those financial transactions in which the investor's own resources are at risk will be considered.

Marginality. The investment needs to generate a return that is greater than just covering the cost of living for the principal investor and his family. The investment should create job opportunities for U.S. workers.

Essential role in the company. The treaty investor must have a key position within the company, either as the investor, who will develop and oversee the investment, or as a supervisory manager, or as a specially trained, highly qualified employee necessary for the development of the investment.

b) Essential Employees

Under the E visa category, a qualifying company can employ ..essential employees" from the Treaty country if this person will have supervisory and managerial functions in the company and/or ••possess skills that are essential to the efficient operation of the business". Accordingly, the candidate's qualifications and the necessity to employ the foreign national over a U.S. worker (i.e. the availability of a U.S. worker or the possibility to train a U.S. worker) are closely scrutinized.

c) The application process

Before an individual can apply for an E visa, the company in the United States where he or she will work must become E qualified. An initial request to quality the U.S. company for E status must be filed together with at least one individual's E application at the U.S. Embassy or Consulate that has jurisdiction over the treaty country. Once the company is E qualified, an individual who is a national of the treaty country can apply for an E visa if he or she is coming to work as an executive or supervisor, or an essential employee. The individual does not have to be employed by the company abroad in order to qualify for E status.

E visas can be issued for up to five (5) years and are renewable indefinitely as long as the company and the individual continues to qualify for E status. Upon each entry to the United States, E visa holders are generally granted two (2) years of E status on Form 1-94 Arrival/Departure Record as long as the E visa is valid at the time of entry.

E Visas are generally applied for directly at a U.S. Embassy or Consulate at the non-immigrant alien's country of citizenship or residency (visa granted for 5 years), or with the U.S. Citizenship & Immigration Services (visa granted for 2 years). Filings in the U.S. can ask for Premium Processing by paying an additional $1,000.00.

d) Spouse and children
The spouse and unmarried children under the age of 21 may obtain a "Dependant Beneficiary" E visa. The E spouse and children can attend school in the United States and the E spouse can obtain an independent employment authorization (E children are not permitted to be employed under their dependant beneficiary status).e) Permanent Residency
The normal procedure for an E essential employee to obtain permanent residency is the labor certification process. However, E-2 Principal Investors cannot file labor certifications because of their controlling interest in the qualifying company.

4. The Intra-company Transferee visa

For investors who are citizens of a country that has not yet entered into the required Treaty of Commerce with the United States, the International Transferee visa is an option.

This category is for international business people coming to the U.S. as intra-company transferees from a foreign parent or subsidiary of the U.S. company (51% ownership) that will engage in real estate investment and development in the United States. L-1 visas are available to people who have worked for the foreign company for at least one ( l ) continuous year within the three (3) years preceding the application. They must have been employed in an executive/managerial or specialized knowledge position and will be transferred to the United States temporarily to work in an executive or managerial capacity for the U.S. company.

a) Duration of stay

An L-1 non-immigrant alien will be admitted to the U.S. for the time required by the employer up to a maximum initial period of stay of three (3) years. An exception to the three (3) year initial stay exists for newly created companies in the U.S. (existing for less than one (l ) year) in which case the visa will be issued for only one ( 1) year in order to control the new company's viability beyond the first year of operations. The visa may then be extended for three (3) years and another three (3) years up to a maximum of seven (7) years for L-1A managers and executives.

b) The application process

The U.S. employer must file a petition with the U.S. Citizenship & Immigration Services (USCIS). The application requires various supporting letters, documentation, and other materials that need to be submitted in order to give a complete picture of company's viability and the transferee's position. Once the petition is approved, the Approval is sent to the competent U.S. Embassy or Consulate where the alien can obtain issuance of the visa into the passport. If the alien is already in the United States in a different non-immigrant category, his or her status can be changed to the L-1 A category. For payment of an additional $1000.00 USC IS offers premium processing whereunder a visa application needs to be approved or denied by USCIS within fifteen (15) business days from the date of filing. As of March 2005, a $500.00 fraud fee needs to be paid to the U.S. Citizenship & Immigration Services in addition to the basic filing fee (currently $185.00) and the afore-mentioned premium processing filing fee.

c) Spouse and Children

The spouse and unmarried children under the age of 21 may obtain a '"Dependant Beneficiary" L visa. The L spouse and children can attend school in the United States and the L spouse can obtain an independent employment authorization (L children are not permitted to be employed under their dependant beneficiary status).

d) Permanent Residency

L-1 A executives and managers have the opportunity to directly file an immigrant petition without going through the labor certification process. The application can be filed once the U.S. company has been in existence for one ( 1) year. Under the so-called '•dual intent doctrine" the applicant can maintain and extend their L-1 A status during the permanent residence application process and do not need to obtain separate employment authorizations and travel permits. L-1 B specialized knowledge workers have to go through the labor certification process. The L structure i.e. the relationship between the foreign and the U.S. company (at least 51% ownership) must be maintained during the whole period i n L status and up to the granting of permanent residency.

5.Conclusion

The U.S. government generally favors investment into the U.S. However, the investment must be into an active, commercial enterprise and, thereby, justify the presence of a foreign individual. Passive investments into vacation homes, etc. are subject to restrictions on the duration of stay in the U.S. Thus, the "simply live in the U.S." visa, i.e. own a house and live off funds accumulated outside the U.S., unfortunately, does not exist. Many other nonimmigrant and immigrant visa categories are available, but they are less used for real estate investments and would exceed the scope of this article.