SPORTS IMMIGRATION: Round 3 - Executives and Professionals

NYSBA Entertainment, Arts and Sports Law Journal

Fall/Winter 2015 | Vol. 26 | No. 3


Introduction

The last article focused on some of those non-immigrant visas (NIVs) as they relate to the various sports industries. Specifically, we took up the B1/B2—Business/Tourist visas, the F and OPT visas, and the H.

There are more visas, however, and so keeping in line with where we left off, we will now move on to take up these classifications:

• E…E1/E2—Treaty Trader/Investor¹ and
• L…L1A/B—Intracompany Transferee (Executive/Specialized Knowledge).²

For this installment, we will concentrate on the E- and L-classifications and leave the O and P for next time.

E-1/2—Treaty Traders/Investors

As indicated in the title, these classifications are for those individuals who either engage in trade or are investors from a country with which the U.S. has a treaty of commerce and navigation

For our purposes, it is unlikely to encounter a “trader” in sports, so we will disregard it here in favor of looking at those investors, who may occasionally appear.

Taking up the first part: a “treaty” must be in place between the foreign national’s home country and the U.S. A list of treaty countries consists of some expected—the U.K., Italy, France, Chile—and some unexpected—China (Taiwan), Iran, and the Congo.⁴

Once we know that there is a treaty, we then look to the next two elements, that the Investor:

• Has invested, or is actively in the process of investing, a substantial amount of capital in a bonafide enterprise in the United States; and

• Is seeking to enter the United States solely to develop and direct the investment enterprise. This is established by showing at least 50% ownership of the enterprise or possession of operational control through a managerial position or other corporate device.⁵

While these are relatively clear, the next important question would be “What is a substantial amount of capital?” We can look directly to the U.S. Citizenship and Immigration Service (USCIS or the Service) for guidance:

A substantial amount of capital is:

• Substantial in relationship to the total cost of either purchasing an established enterprise or establishing a new one;

• Sufficient to ensure the treaty investor’s financial commitment to the successful operation of the enterprise; or

• Of a magnitude to support the likelihood that the treaty investor will successfully develop and direct the enterprise. The lower the cost of the enterprise, the higher, proportionately, the investment must be to be considered substantial.⁶

Many people seem to trip themselves up over “substantial in relationship to the total cost” and believe that this must always be $100,000.00 or more when starting a new business. However, that is not true.

Notice the language: “Substantial in relationship to the total cost of […] establishing a new one.” In many instances, this can be hard to ascertain, especially if the entity in question is novel without much to compare, but a good rule of thumb is to look to the other two definitions for “substantial amount of capital” and draw from them. When we employ this,we see that so long as the amount invested or being invested can be demonstrated to support the development of the enterprise,then the investment shall be deemed substantial. If the investment is deemed substantial, then we are in a great position for an E-2 visa.

If you are wondering how this could ever be used under “sports immigration,” let’s look at an example:

A foreign national is presently in the U.S. pursuing her MFA in graphic design. She is on her way to graduating and being awarded the prestigious degree from her educational institution when she gets the itch to start her own public relations firm. While this might seem like a stretch, Ms. F. National has had quite a bit of experience in her home country and around the world writing for various media outlets, designing logos for a variety of corporate entities, and redesigning a business’s packaging and advertising campaign. After doing all this and more for an array of athletic apparel retailers, sports teams, athletes, universities and their respective teams, as well as local sports clubs, she knows she wants to start her own business after she graduates and finishes her Optional Practical Training (OPT).⁷While under OPT, she has been working for an established agency, saving her money, and has accrued $71,000.Towards the end of her OPT, she decides to invest this into developing her own PR firm. When she looks at the costs involved in starting this PR firm of hers, she realizes that it will only require $6,200 for a new computer, some software, a printer, scanner, domain name registration, and a number of other relatively nominal expenses that add up.

If start-up costs are so low, should she invest $100,000 or be turned away from applying for E-2 status? She should not. Of course, $6,200 is far too low to qualify for E-2 status, but it would be reasonable to argue that by investing the $71,000 into the enterprise, considering the financial barrier to entry is so low, she will be able to develop the enterprise into a successful agency that employs individuals. The additional funds could be used for networking events, specialized training, co-working office space, professional services, and should she need assistance, salaries.

Practice Tip: Do not simply turn away a prospective investor because you heard that $100,000 is the magic number and the investor is unable to reach the six-figure bar. To the contrary, evaluate each scenario very closely and when in doubt, pursue another opinion from a business immigration attorney, rather than a more general immigration attorney.

L-1A/B—Executives, Managers, and Those With Specialized Knowledge

The fundamental aspect of the L-visa is that it is for an enterprise to transfer an employee from one global office outside of the U.S. to one that is within.⁸

Taking up some of the fundamentals of the L-visa: (1) The relationship between the entity outside of the U.S. and one within the U.S. is that the U.S. entity can be the parent company, a branch, subsidiary or affiliate of the foreign entity;⁹ and (2) the foreign entity must continue operating or “doing business” while the transferred executive, manager or individual with specialized knowledge is in the U.S.¹⁰

The L-visa is an interesting one in that it allows for a new U.S. enterprise, meaning if we were to take the same scenario we used for E-2 status and add in some additional nuances, we would have an L-1 scenario that looks like this:

Ms. F. National understands the nature of these start-up costs. In addition to her experience above, she has also worked for her own thriving enterprise in her home country for many years, most recently spending a full 12 months outside of the U.S. some two years ago, just prior to starting her MFA studies. Ms. F. National now wants to open a U.S. base of operations that will expand her enterprise. Having worked with a number of soccer teams and Olympic competitors outside of the U.S.,she knows that there is a good market for her unique services in the U.S.

There are additional requirements placed on the transferee who seeks to open a new enterprise, but being that we discussed them at length in prior articles, I will avoid them here. For our purposes, know that there are additional nuances.

Most important here is to be aware of the fact that L-1A/B can be a viable option for a foreign national seeking to engage within the sports industries in the U.S.

E-2 and L-1A/B—A More Direct Link to Sports

If these examples above are a bit too ancillary for the reader, I will provide you with one very clear scenario that should bring these categories directly into the fold of about “sports immigration.”

Let us take Ms. F. National again, the impressively astute designer who has been engaged in sports for a variety of organizations. However, let us now look at her in this light:

Ms. F. National has finished her MFA program and exits the U.S. to return to her home country and continue building her design entity. Having been an avid sports fan for many years and developing an array of successful campaigns and products for sports organizations, Ms. F. National decides to take her $71,000, add it to her small fortune she has amassed having developed quite a thriving business for herself, and combined, purchases a racehorse, Entrepreneur’s Delight. Her horse is developing well, winning races, drawing attention, and so Ms. F decides to enter the U.S. with Entrepreneur’s Delight. In order for her to begin racing competitively at the highest levels, she knows she needs to have a stable, trainers, workers, groomers, a veterinarian, and many more individuals overseeing the health and development of Entrepreneur’s Delight. Additionally, Ms. F will need food, supplies, housing, and if she wants to capitalize on the horse’s reputation outside of the U.S., she will need to engage in marketing and employ her design skills to develop products and campaigns.

All in, Ms. F. National is going to need to engage in quite a bit of work and large sums of money. She can invest in her own enterprise that will own all of those assets listed above and pay out those employees, contractors, and the like. In addition to creating her own entity in which she invests, Ms. F. National also sets this holding company up as a subsidiary of her home country enterprise that handles these same operations outside of the U.S. Due to how she has organized these entities, she might look to dive into the U.S. as an investor or perhaps be transferred into the U.S. entity as an executive.

Once she invests in this overarching entity, she wants to market and create a campaign surrounding Entrepreneur’s Delight. In order to do this, she creates a separate entity for the design and development of the horse’s image. Ms. F. National then realizes that she can officially take her design entity in her home country, that thriving enterprise, and make it a global operation: She creates the U.S. design entity and sets it up as a U.S. subsidiary of her home-country entity. Should she wish to enter the U.S. under this U.S. entity, she could potentially do so as an executive or person with specialized knowledge.

Conclusion

What is important to take away from this example is precisely how both the E and L visa classifications can be valuable within sports immigration in a direct format. We must remember that sports consist of more than athletes, coaches, and trainers; sports also encompass designers, developers, investors, and many more creative and non traditional members of the sports industries.

With that, we conclude our brief overview of the E and L visas, and next time, will close our sports immigration discussion with the pinnacle of visa classifications under the ambit of sports immigration, the O- and P-visa classes.

Endnotes

  1. E-1 Treaty Traders, available at http://www.uscis.gov/working-united-states/temporary-workers/e-1-treaty-traders; E-2 Treaty Investors, available at http://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors.
  2. L-1A Intracompany Transferee Executive or Manager, available at http://www.uscis.gov/working-united-states/temporary-workers/l-1a-intracompany-transferee-executive-or-manager; L-1B Intracompany Transferee Specialized Knowledge, available at http://www.uscis.gov/working-united-states/temporary-workers/l-1b-intracompany-transferee-specialized-knowledge.
  3. E-1 Treaty Traders, available at http://www.uscis.gov/working-united-states/temporary-workers/e-1-treaty-traders; E-2 Treaty Investors, available at http://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors.
  4. U.S. Department of State—Bureau of Consular Affairs, U.S. Visas, Treaty Countries, available at http://travel.state.gov/content/visas/english/fees/treaty.html.
  5. E-2 Treaty Investors, General Qualifications of a Treaty Investor, available at http://www.uscis.gov/working-united-states/temporary-workers/e-2-treaty-investors.
  6. Id.
  7. We referenced this in several other articles. Rather than go into much detail here, what should be understood for this scenario is that OPT is post-graduate employment authorization that, for Ms. F. National, would last for 12 months.
  8. L-1 Visa, available at http://www.uscis.gov/eir/visa-guide/l-1-intracompany-transferee/l-1-visa.
  9. L-1A Intracompany Transferee Executive or Manager, available at http://www.uscis.gov/working-united-states/temporary-workers/l-1a-intracompany-transferee-executive-or-manager. Worth noting is that whether evaluating for L-1A or L-1B, the relationship between the corporate entities referenced here must still be present.
  10. Id.

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

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