ENTERTAINMENT IMMIGRATION: Visas for International Artists, Entrepreneurs, and Corporate Entities

NYSBA Entertainment, Arts and Sports Law Journal

Fall/Winter 2013 | Vol. 24 | No. 3


Introduction

The last time we dined on entertainment immigration, we briefly touched upon each of the H-1B, H-2B, P, and O classifications as they were and are the most applicable to the arts community by their very nature. In this overview, we will go through some other visa options that may prove beneficial for the more business oriented artist.

When an individual seeks to enter the U.S. to build, expand, or develop his or her business, the visa categories most common in the arts community are generally not applicable; those visa categories contemplate pure employment of the individual by the American entity already in existence. As a result of this, let us evaluate some of the more common scenarios and their applicable visa categories, followed by a discussion of each category:

(1) One individual who does not reside in the U.S., but owns an arts company, seeks to enter the U.S. to invest in and develop his or her company (E-2 / L-1A); (2) A company that is already organized outside the U.S. engages in a significant amount of trade between the U.S. and its principal place of business (E-1 / L-1A); (3) A company owned by one or more individuals seeks to expand its operations into the U.S. to set up a satellite office or otherwise by transferring one of its key employees (L-1A / L-1B / O-1A / maybe O-1B); and (4) An international entity seeks to enhance its operations already present within the U.S. by utilizing one of its best talents who will work within his or her craft (L-1A / L-1B / O-1A / O-1B).

Clearly, we will be working with alphabet soup this time around, and so let us dip our bread and soak up the flavor.

E-2: The International Investor

Taking up the first scenario above in which a business owner seeks to enter the U.S. to invest in and develop his or her company, we have the E-2 visa classification.

The investment possibilities are endless, and so for these purposes, let us assume that the business is a production company working in both pre- and post-production activities. The owner, a well-respected editor, director, and producer from Australia, requires a host of equipment (hardware and software) in the U.S. for the company to become functional. Our business owner has already invested $50,000 into the U.S. venture by putting up cash for equipment, and leasing workspace. He is going to be putting up an additional indeterminate amount of funds once stateside and may take out a loan or two to maintain liquidity. Now, we deconstruct.

The initial question that must be asked is whether there is an applicable “treaty of commerce and navigation” in place between the U.S. and investor’s home country.¹ With this, the question of whether the company is owned 50% or more by an individual of a country with which the U.S. has such a treaty must be posed and answered in the affirmative.² Here, we have both of these satisfied, as the investor owns the company and is a national of Australia.³ That the investment has already been made is crucial and that it has been put up in cash is ideal due to the fact that those funds are now placed “at risk,” that is subject to a loss.⁴ The future investments and their procurement may be beneficial, but this would remain to be seen depending upon the terms of the loans.

The biggest issue presented here is the amount of funds invested. Any amount below $100,000 will come under far more intense scrutiny by the adjudicating officer at the applicable embassy. Not that an investment at or below $100,000 will be outright denied, but it will be a definite uphill battle to demonstrate that the investment is substantial and not marginal, and that the business will be capable of supporting more than the investor alone.⁵

E-1: The International Trader...Not Benedict Arnold

In the second scenario above, the international business owner is involved in a significant amount of trade between his or her home country and the U.S. As with the E-2, we must look to whether the entity’s nationality and that of the treaty trader is in accord with a “treaty of commerce and navigation.”⁶ What is different here is that rather than the amount of an investment being substantial, the trade must be substantial to the tune of 50% or more of the company’s overall basis of trade.⁷ Additionally, the definition of substantial trade is a bit amorphous and arguable, but can generally be expressed when there is a “continuous flow of sizable international trade items, involving numerous transactions over time.”⁸

The most ambiguous aspect of this visa is the definition of trade. For those of us representing fashion enterprises, this may not be such a difficult issue. However, when we represent music publishing companies, the issue becomes significantly more convoluted in determining what does and does not constitute trade and a tradable asset.

A further discussion of the E-1 category will be taken up in the future where more space may be devoted to each of its intricacies.

L-1A and L-1B: Intracompany Transfers of Management or Individuals with Specialized Knowledge

The third situation involves two possibilities: (1) A company that is owned by multiple individuals, or has employees with high-levels of authority to act on its behalf, and seeks to transfer one of its key employees to its U.S. office; and (2) A small business with an office outside of the U.S. wants to send a key employee to build an American office for the non-U.S. entity. As the former is the most common scenario under which L-1 classification is sought, the L-1A and L-1B tend to be most useful for the practitioner acting as either in-house or outside counsel. The basic considerations are as follows:

  • The petitioning employer must be in the U.S. and have a qualifying relationship with a foreign company; and

–  A “qualifying relationship” is one of the following:

    • The U.S. entity is the parent company;
    • The U.S. entity is a branch of the non-U.S. entity;
    • The U.S. entity is a subsidiary;
    • The U.S. entity is an affiliate of the non-U.S. entity.
  • The petitioning employer must also currently be, or will be, doing business as an employer in the United States and in at least one other country for the duration of the beneficiary’s stay in the United States as an L-1.⁹

In the case of the employee entering the U.S., a/k/a the “beneficiary,” he or she must also generally satisfy these two requirements:

  • Have been working for a qualifying organization abroad for one continuous year within the three years immediately preceding his or her admission to the United States [emphasis added];¹⁰ and
  • Be seeking to enter the United States to provide service in an executive or managerial capacity (i.e., L-1A)¹¹ or in a specialized knowledge capacity (i.e., L-1B) for a branch of the same employer or one of its qualifying organizations  [emphasis added].¹²

These basic elements are quite easy to satisfy and in the case of an in-house or outside counsel, will often be the easiest situation from which to petition.

A more common situation, however, involves the small business owner who does not have a U.S. base of operations and desires to set up a branch, subsidiary, affiliate or the like upon his or her entry. In such a case, the proper classification would be L-1A (for an executive or manager) and the small business owner must have someone else within the company with proper capacity (e.g., a CFO) to execute the necessary forms and petition on his or her behalf. In such a case, the petitioner must show an additional three elements:

  • That it has secured sufficient physical premises to house the new office;
  • The employee has been employed as an executive or manager for one continuous year in the three years preceding the filing of the petition; and
  • The intended U.S. office will support an executive or managerial position within one year of the approval of the petition.¹³

Based upon these points, the next question that may come to mind is, “Why would anyone ever opt for E-2 over L-1A status if he or she is going to create a new office?” While the reasons are very particular to the set of circumstances and vary accordingly, one primary reason is that an initial E-2 filing is treated as an application and the requirements of “securing sufficient space” may not necessarily be applicable.

While more will come of the L-1A visa going forward, as it is greatly useful for the small business owner seeking to develop a new office in America, we now move on to O-visa classification and deviate from the formation of a new office ever so slightly.

O-1A and O-1B: Individuals of Extraordinary Ability

Finally, we reach the O visa, the one status that labels the beneficiary as an individual of “extraordinary ability” and will most often be the go-to for the non-U.S. artist seeking to enter America in order to engage in his or her craft, but is rarely ever utilized by the non-U.S. artist to open a business in the States, and for good reason.

As stated above, the O-visa is intended for employees. For clarity, an individual seeking O status may not “self-petition” or “self-sponsor” for himself or herself to receive O status. This means that the beneficiary may not sign his or her own paperwork seeking this status, and as such, must be an employee with a less than majority ownership interest.

This has been problematic because U.S. Citizenship and Immigration Services (USCIS) tends to maintain its antiquated view that the threshold determination is actual control, rather than the right to control. This counters and negates Donald Neufeld’s memorandum of 2010, in which he wrote that “[t]he right to control the beneficiary [which] is different from actual control. An employer may have the right to control the beneficiary’s job-related duties and yet not exercise actual control over each function performed by that beneficiary. The employer-employee relationship hinges on the right to control the beneficiary” [emphasis added].¹⁴

Ultimately, be very wary of an owner-artist seeking O-1 status. It is rarely going to be the most applicable or safest visa option for the potential beneficiary. That being said, however, in order for the owner-artist to enter under O-1 status, the petitioner must be formed prior to submitting the petition to the Service, it must be functional, and there should be various elements in place that would point to the owner-employee as being subject to the control of the entity.

Now, we reroute our O course and take up a separate, yet very important, consideration to bear in mind when working with the prospective beneficiary of O-1 status: the act of freelancing. An O-1 beneficiary cannot freelance. The beneficiary may engage in additional activities with third-parties provided those additional activities fall in line with those duties and events stated within the petition, along with the terms of employment. In the event they do not, then an amended or second petition should be filed. For instance, in the case of a musician who is going to be playing with a band that will be touring, a detailed itinerary should be provided indicating tour dates, locations, and parties involved. Sadly, if the beneficiary is a producer or anyone working within film and television, then the itinerary requirements are significantly higher, though not due to specifically required USCIS review, but rather, as a result of the mandatory requirement that those individuals’ qualifications be reviewed by both a labor and management organization prior to submission to USCIS.¹⁵ Taking a look at this aspect of the immigration process for a film editor, for example, we see that the editor’s petition must be reviewed by one labor organization, generally International Alliance of Theatrical Stage Employees (IATSE), and one management organization, always the Alliance of Motion Picture & Television Producers (AMPTP). Looking to the latter, AMPTP requires the submission of a “deal memo” for each production listed in the petition, or each production being undertaken as set forth in the itinerary. The elements of the AMPTP deal memo include the name and title of the production, its approximate start date, duration, and the nature of the project.¹⁶ Additionally, if the production is a commercial, it falls within a separate set of requirements that include the projected fee, production location, production company name, the artist name, position to be fulfilled, dates required, and must be executed by the production company named on the deal memo.¹⁷ Samples of both styles are available at AMPTP’s website under its O-1/O-2 Visas section.¹⁸ Using one and not the other improperly will cause a delay in the processing of the case by AMPTP and ultimately protract the time frame within which the beneficiary may receive his or her approval, so the practitioner who is unsure of which one to use would be best advised to reach out to AMPTP’s immigration department directly with any question.

We have sopped up all of our alphabet soup that was on the menu at this time, and in keeping in line with the last article, have now gone through each visa that may be afforded to a foreign entertainer or artist. Most importantly, we delved a bit deeper into the murkiness of the O visa. Perhaps next time, we will concentrate strictly on one or two visa types and dive headfirst into the fun that is Alphabet City.

Endnotes

  1. U.S. CITIZEN AND IMMIGRATION SERVICES, E-2 Treaty Investors (Apr. 14, 2010), http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=2ea36811264a3210VgnVCM100000b92ca60aRCRD&vgnextchannel=2ea36811264a3210VgnVCM100000b92ca60aRCRD.
  2. Id.
  3. TRAVEL.STATE.GOV – A SERVICE OF THE BUREAU OF CONSULAR AFFAIRS, U.S. DEPARTMENT OF STATE, Treaty Countries (Aug 28, 2013), http://travel.state.gov/visa/fees/fees_3726.html.
  4. E-2 Treaty Investors, supra note 1.
  5. Id.
  6. U.S. CITIZEN AND IMMIGRATION SERVICES, E-1 Treaty Traders (Apr. 14, 2010), http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3e5b9ac89243c6a7543f6d1a/?vgnextoid=05536811264a3210VgnVCM100000b92ca60aRCRD&vgnextchannel=05536811264a3210VgnVCM100000b92ca60aRCRD.
  7. Id.
  8. Id.
  9. U.S. CITIZEN AND IMMIGRATION SERVICES, L-1A Intracompany Transferee Executive or Manager, (June 17, 2013), http://ww.uscis.gov/portal/site/uscis/m.9243c6a7543f6d1a/?vgnextoid=64d34b65bef27210VgnVCM100000082ca60aRCRD&vgnextchannel=64d34b65bef27210VgnVCM100000082ca60aRCRD.
  10. Id. (emphasis added).
  11. Id.
  12. U.S. Citizen and Immigration Services, L-1B Intracompany Transferee Specialized Knowledge (Sept. 28, 2012), http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c2a3efb9ac89243c6a7543f6d1a/?vgnextoid=bfd10b89284a3210VgnVCM100000b92ca60aRCRD&vgnextchannel=bfd10b89284a3210VgnVCM100000b92ca60aRCRD (emphasis added).
  13. U.S. CITIZEN AND IMMIGRATION SERVICES, L-1A, supra note 9.
  14. DONALD NEUFELD, U.S. CITIZEN AND IMMIGRATION SERVICES, Determining the Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements (Jan. 8, 2010), available at http://www.uscis.gov/USCIS/Laws/Memoranda/2010/H1B%20Employer-Employee%20Memo010810.pdf 3 n.6. (emphasis added) (It should be noted that this Memorandum was never adopted nor put into effect in any serious manner. Additionally, even though it references H-1B specifically, there was never any reason to assume or expect it to be limited in scope to H-1B visas. Sadly, this has never held true and the overall effect is the draconian view of an employee.)
  15. U.S. Citizen and Immigration Services, O-1 Visa: Individuals with Extraordinary Ability or Achievement (Mar. 16, 2011), http://www.uscis.gov/portal/site/uscis/menuitem.eb1d4c6a7543f6d1a/?vgnextoid=b9930b89284a3210VgnVCM100000b92ca60aRCRD&vgnextchannel=b9930b89284a3210VgnVCM100000b92ca60aRCRD.
  16. Alliance of Motion Picture and Television Producers, Required Documents for O-1 Advisory Letters, http://www.amptp.org/files/immigration.pdf.
  17. Id.
  18. Id.

Article originally written in Entertainment, Arts and Sports Law Journal and is republished here with permission from NYSBA.

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