Immigration Options through the Eyes of a Canadian Company—“The Business Visitor”

April 17th, 2009 by Brian D. Zuccaro

By: Andrew M. Wilson

 

I. Introduction

Securing order from major U.S. company—$15,000 in marketing and man hours

Potential revenue generated from new U.S. customer—$500,000

Reserving air flights and hotel for meetings to finalize deal—$2,000

Accolades and promised promotion for landing new U.S. customer—Priceless

Getting denied admission by U.S. immigration and losing deal—Disastrous

The events of the past two years have made it more challenging for Canadian companies and individuals to conduct business in the United States. There have been a multitude of procedural, substantive and philosophical changes that have resulted in immigration officials adopting an “enforcement” rather than “facilitative” mindset. The Immigration and Naturalization Service (INS) was eliminated and immigration is now under the direction of the Department of Homeland Security. Even NAFTA, a treaty whose primary purpose is to liberalize trade and ease the temporary entry of citizens of Canada and Mexico, has undergone some restrictive interpretations as to its implementation.

What has not changed is the desire and necessity of many Canadian companies to establish U.S. offices and/or engage in commercial transactions with U.S. customers. This article is the first in a series that will track the U.S. immigration issues faced by Walker-Ross, Ltd., a fictitious Canadian company headquartered in Toronto, Ontario. The success of Walker-Ross’ U.S. endeavors will not only depend on the soundness of their business plan, but also the dependability of their U.S. immigration plan. Today, when U.S. immigration is operating under a zero tolerance policy and a “culture of no”, planning your business needs in tandem with the appropriate U.S. immigration strategy could mean the difference between priceless and disastrous.

 

II. Hypothetical # 1—“The Business Visit”

Walker-Ross, Ltd. (“Walker-Ross”) is a Canadian company headquartered in Toronto, Ontario that designs, engineers and manufactures specialized machinery and equipment. Walker-Ross recently established small sales offices in Buffalo, New York and Charlotte, North Carolina.

Walker-Ross is a growing company and has identified several opportunities to enter the U.S marketplace. They have recently engaged in negotiations with a U.S. company that would like to purchase sophisticated equipment for its production plant. Over the next 4-8 months, Walker-Ross needs to send Scott Moran, Sales Manager and Larry Edison, Lead Engineer to the U.S. to meet with the U.S. customer, tour their production facility, finalize the purchase order specifications and outline the installation procedures for the equipment. After the deal is finalized, Walker-Ross will need to send two engineering technicians, Ethan Thomas and Edward Taylor, to deliver and install the equipment at the customer’s production facility in the U.S.

 

III. Overview of U.S. Immigration

In its most basic form, U.S. Immigration law is broken up into two main groupings—Non-immigrants and Immigrants.

 

A. Non-immigrants

A non-immigrant is an individual who has been authorized to stay in the United States for a temporary period of time. The individual must have a permanent residence abroad (for most classes of admission) and qualify for the non-immigrant classification sought. But for two exceptions, non-immigrants must prove that they have the intent to return to their home country after their authorized stay has ended.

Non-immigrants are identified by their “alphabet soup” category names (i.e. B, E, L, H-1B etc.), and they are restricted as to what they can and must do in the United States. Non-immigrant options for Canadians, particularly under NAFTA, are quick and generally devoid of bureaucratic impediments. By no means are they rubber stamped by immigration officers, but a non-immigrant category is generally the preferred short-term option for an individual coming to visit or work in the United States because of the speed in which it can be obtained.

 

B. Immigrants

An immigrant is an individual who has been authorized to live permanently in the United States. Immigrants are also known as lawful permanent residents (LPR) or green card holders, and they are legally accorded the privilege of residing permanently in the United States. Green card holders have no restrictions on where they work or live in the United States. Depending on eligibility, a green card can take between 1-3 years to process.

 

IV. Choosing the Proper U.S. Immigration Strategy

U.S. immigration is similar to chess in that you must always be thinking 2-3 moves ahead. When analyzing the proper immigration strategy to choose in any case, one should follow this simple process:

Write down your short-term and long-term goals to stay in the U.S.;

 

Write down the facts of your personal and professional situation;

  1. Analyze any admissibility concerns for you and/or your family;
  2. Analyze immigration processing times with your time frame requirements;
  3. Pick a category that best matches your needs and credentials;
  4. Analyze what options are available to your family based on the category you choose;
  5. After picking a category, plan out 3-5 years in advance to see if it imposes any restrictions on you and/or your family that will become a problem in the future;
  6. Match up your non-immigrant category with your short-term plans and your immigrant category with your long-term plans.

When looking at the overall immigration picture of a Canadian company with various business visits planned in the U.S. for some its employees, a non-immigrant option is inevitably the appropriate short-term strategy. In this case, the proper non-immigrant option is the B-1.

A. B-1 Status—Temporary Visitor for Business

1. The B-1 at a Glance

Allows an individual to enter the United States temporarily to engage in business related activities—not employment. Canadians, citizens from visa waiver countries and those who already possess a B-1/B-2 visa may apply at any Port of Entry (i.e. land border or airport). The B-1 is a nebulous category that receives inconsistent treatment from immigration officials. It is very unpredictable and very subjective. There are no bright line tests and it is not appropriate for long-term stays.

2. Definition of B-1 Business Visitor

The Immigration and Nationality Act (INA) defines a business visitor as someone “(other than one coming for the purpose of study or of performing skilled or unskilled labor or as a representative of foreign press, radio, film or other foreign information media coming to engage in such vocation) having a residence in a foreign country which he has no intention of abandoning and who is visiting the United States temporarily for business…”[1]

B-1’s are reserved for individuals coming to the United States temporarily to conduct limited business activities. Business refers to a wide variety of commercial, professional, services and training activities.[2] Permissible activities specifically include contract negotiations, litigation, independent research, taking purchase orders, participating in conventions, conferences and seminars. The individual may not engage in ordinary employment and may not be compensated by a U.S. source. In addition, the individual must have a residence in a foreign country which she has no intention of abandoning.

a. General Permissible B-1 Activities

  • Commercial activities not involving work—i.e. a salesman taking orders for products/services manufactured/performed outside of the United States
  • Negotiate contracts
  • Consult with business associates
  • Litigate
  • Participate in conventions, conferences or seminars
  • Independent research

b. Specific Permissible B-1 Activities

  • Member of religious or charitable organization or participants in voluntary service programs
  • Member of Board of Directors of U.S. corporations
  • Personal or domestic servants of U.S. citizens residing abroad or temporarily assigned through the U.S.
  • Personal or domestic servants of certain non-immigrants meeting specific requirements
  • Certain professional athletes
  • Prospective investors (E-2)
  • Prospective intra-company transferees (L-1)
  • Commercial industrial workers with specialized knowledge to install, service, or repair equipment or machinery purchased abroad or to train U.S. workers provided their services are required pursuant to a contract
  •  To observe the conduct of business or other professional activities without pay
  • B-1 in lieu of H-1 or H-3

c. B-1 Activities under NAFTA for Canadians

In addition to the above-enumerated activities, NAFTA expanded B-1 activities for Canadians to include business visitors engaged in:

  • Research and design
  • Growth, manufacturing and production
  • Marketing
  • Sales
  • Distribution
  • After sales service of equipment and machinery (including software)
  • General service

* Make the Most of NAFTA

For Canadians coming to the U.S. in the B-1 category, the North American Free Trade Agreement (NAFTA) should be the first step. [3] NAFTA provides for the entry of Canadian “business persons” as business visitors (B-1), traders and investors (E-1/E-2), intra-company transferees (L-1) and professional workers “TN”[4].

NAFTA, effective January 1, 1994, expanded the United States-Canada Free Trade agreement (CFTA)[5] and expanded provisions relating to cross-border travel by business persons. NAFTA covers only citizens of Canada, Mexico and the United States, but it does not include landed immigrants who live in but who are not citizens of Canada.

3. Requirements

a. Business visit in the U.S. must be temporary

The business activity performed in the U.S. must be for a temporary period of time, and the individual must possess a clear intent to return to their foreign residence.

b. Business visitor must be employed and paid by a non-U.S. employer

c. Must be coming to the U.S. only to engage in B-1 business visitor type activities

As noted above, only certain business activities are permissible for B-1’s. However, the lack of a clear definition of “business” is a large reason why this category can be unpredictable.

d. Ownership of business visitor’s company must be non-U.S.

The principle place of business and where the profit normally accrues must be a foreign location.

4. Visa Requirements

Most non-immigrants must have a valid passport and valid visa before coming to the U.S. for a business visit. However, in addition to NAFTA, another advantage afforded to Canadian citizens is that they are passport and visa exempt. (See exceptions in footnote)[6] Therefore, Canadians applying for B-1 status do not need to obtain a visa at a U.S. Consulate and do not need to possess a valid passport. If the individual does not have a passport, he needs to present a birth certificate and one photo I.D. as proof of Canadian citizenship.

In addition, under the Visa Waiver Program (VWP), there are a number of nationalities that do not require a visa if they are coming to the U.S. for a business visit. The Visa Waiver Program enables citizens of certain countries to travel to the United States for tourism or business for 90 days or less without obtaining a visa.

Currently, 27 countries participate in the Visa Waiver Program, as shown below:

Visa Waiver Program – Participating Countries

  • Andorra
  • Iceland
  • Norway
  • Australia
  • Ireland
  • Portugal
  • Austria
  • Italy
  • San Marino
  • Belgium
  • Japan
  • Singapore
  • Brunei
  • Liechtenstein
  • Slovenia
  • Denmark
  • Luxembourg
  • Spain
  • Finland
  • Monaco
  • Sweden
  • France
  • the Netherlands
  • Switzerland
  • Germany
  • New Zealand
  • United Kingdom

While individuals from these countries do not require a visa for their short business trips, they do require a machine readable passport (MRP).[7]

5. Processing Procedures

For Canadians, securing B-1 status can be relatively simple. Individuals apply at a land border or airport and simply bring proof of Canadian citizenship and proof of their business visit. When a Canadian individual applies for entry, she needs to have proof of Canadian citizenship and an employer letter describing the business activities in which she will be engaged during her temporary visit to the United States. The support letter must carefully describe the legitimate B-1 activities, emphasizing that the client will not be engaged in ordinary employment in the U.S. and will not be paid by any US source.

The immigration officer will inquire about the purpose of the business visit, length of stay in the United States, source of compensation and plans to return to Canada. The individual, if approved, will then be allowed to enter the United States that same day.

6. Duration

A B-1 visitor may be approved for up to one year, but many times it is simply for the duration of that particular business trip. Extensions of B-1 status may be granted for six months, and may be obtained through a regional Service Center without leaving the U.S.[8]

7. Issues That May Cause Problems for B-1 Admission

Below is a list of some of the more common issues that can result in the denial of a B-1 applicant:

  1. Past criminal problems;
  2. Past immigration problems;
  3. No strong ties to Canada;
  4. Lack of proper documentation;
  5. Providing incomplete or confusing answers;
  6. Frequent and lengthy trips to the U.S.

 

V. Implementing the Proper U.S. Immigration Strategy

A. Scott Moran—Sales Manager and Larry Edison—Lead Engineer

Referring back to our hypothetical, Walker-Ross must send Scott Moran and Larry Edison to the U.S. to meet with the U.S. customer, tour their production facility, finalize the purchase order specifications and outline the installation procedures for the equipment. This will require several visits of 2-3 weeks each to the U.S. over the next 4-8 months.

1. Citizenship

The first issue to confirm is whether both Scott and Larry are Canadian citizens. As it turns out, Scott is Canadian and can take advantage of NAFTA and enter the U.S. as a business visitor.

However, Larry only holds landed status (permanent resident) in Canada and is a citizen of Australia. Larry does not qualify for NAFTA, but can enter the U.S. as a business visitor under the Visa Waiver Program (VWP). Larry will not need to obtain a visa, but he will need a machine readable passport in order to be admitted under the Visa Waiver Program.

2. Activities in the U.S.

The next issue to confirm is the specific activities that both Scott and Larry will perform while in the U.S. Importantly, they are only coming in for meetings, observations and negotiations. They will not engage in any labor or employment in the United States and their visits are temporary in nature. Coming to the U.S. for business meetings, to consult with business associates and to negotiate terms of contracts clearly fall under permissible B-1 business visitor activities. These business dealings are permissible B-1 business activities under both NAFTA for Scott and Larry through the Visa Waiver program.

3. Procedures

Scott and Larry can apply for their B-1 status at any port of entry coming into the United States, including land borders and airports. They plan to fly out of Pearson Airport in Toronto, and therefore can apply for their B-1 status at the airport.

Scott and Larry should arrive at the airport at least three (3) hours before their flight so they have time to be processed by immigration. They should carry with them their passport and/or birth certificate (machine readable passport for Larry) and a letter clearly explaining the nature of their business trip—including confirmation that they still live in Canada, they still are employed by their Canadian company and that they will not be remunerated by any U.S. source.

Scott and Larry should be prepared to answer general questions about the purpose and duration of their visit. As long as they have not had any prior criminal or immigration problems, they should be approved for their 2-3 week business visits.

4. Frequency

There are no defined rules as to how often an individual can enter the U.S. as a business visitor. However, if Scott and Larry know that over the next year they will need to make weekly/monthly visits to the U.S. to meet with different companies and work out of one of the U.S offices, they should be looking at a different option than the B-1. If someone is a frequent traveler to the U.S., chances are immigration may suspect that more is going on than simply business meetings and they may deny admission as a B-1 business visitor.

 

B. Ethan Thomas and Edward Taylor—Engineering Technicians

Referring back to our hypothetical again, after the deal with the U.S. customer is finalized, Walker-Ross must send two engineering technicians, Ethan Thomas and Edward Taylor, to deliver and install the equipment at the customer’s production facility in the U.S.

1. Citizenship

Both Ethan and Edward are Canadian citizens and therefore can take advantage of applying as B-1 business visitors under NAFTA. Also, neither Ethan nor Edward are required to possess machine readable passports , but still need to show proof of their Canadian citizenship.

2. Activities in the U.S.

After the contract is finalized, Ethan and Edward will be the two Walker-Ross technicians who will deliver and install the equipment. While delivery and installation seem like “work” or “labor”, in certain circumstances, they are actually permissible B-1 activities under NAFTA.

Canadians that may come in for after-sales services include—

Installers, repair and maintenance personnel, and supervisors, possessing specialized knowledge essential to the seller’s contractual obligation, performing services or training workers to perform services, pursuant to a warranty or other service contract incidental to the sale of commercial or industrial equipment or machinery, including computer software, purchased from an enterprise located outside of the United States, during the life of the warranty or service agreement. (For the purposes of this provision, the commercial or industrial equipment or machinery, including computer software, must have been manufactured outside the United States.)[9]

In order for Ethan and Edward to qualify under the after-sales services provision, it is critical that:

  1. The agreement is made between Walker-Ross-Canada and the U.S. customer, NOT one of Walker-Ross’s U.S sales offices and the U.S. customer. If Walker-Ross-U.S. signed off on the contract/agreement, then they would not qualify for B-1 status.
  2. The equipment is manufactured in Canada. Again, if the equipment was manufactured in one of the U.S. locations of Walker-Ross, then Ethan and Edward would not qualify for B-1 status.
  3. The delivery, installation and any warranty work are explicitly laid out in a purchase order or contract agreement. It is important that each aspect of the deal has been memorialized in the paperwork. Ethan and Edward will have trouble being admitted as B-1’s under the after-sales provision if there is no contract or purchase order outlining the delivery and installation schedules.
  4. They have resumes/previous experience letters/diplomas or transcripts showing they have experience and expertise with the technical equipment involved in the delivery and installation. The provision requires that the individual possess “specialized knowledge essential to the seller’s contractual obligation”. Therefore, it is important to show that Ethan and Edward are qualified to delivery and install the equipment.

3. Procedures

Like Scott and Larry, Ethan and Edward can apply for their B-1 status at any port of entry. They should expect to be asked where the equipment was manufactured, how they are qualified to handle the delivery and installation, how often they have been in the U.S. in the last twelve months and how often they expect to be entering in the coming year. They should carry with them:

  1. A passport or birth certificate and photo I.D.;
  2. A letter from Walker-Ross outlining their credentials, the project in the U.S., the duration of the visits and the fact they are still employed by Walker-Ross in Canada and that they will not receive any remuneration from any U.S. source;
  3. Original or copy of the purchase order or contract showing the agreement for delivery, installation and any warranty services;
  4. Resume, reference letters and/or diplomas of each individual showing their experience and technical expertise with the equipment;
  5. Promotional literature on Walker-Ross and the U.S. company.

4. Frequency and Duration

Walker-Ross will be able to send Ethan and Edward, or other qualified technicians, to the U.S. customer for after-sales work and repair for the life of the service agreement or warranty. Their B-1’s will be approved for the duration of their visit. If they need to come in months later for follow-up repairs/issues, they should carry with them the same documentation.

 

VI. Summary

While the B-1 is one the most misunderstood and confusing non-immigrant categories, it is still the fastest and most efficient category for individuals who travel to the U.S. for business trips. If the business trips become more frequent, or if the individual’s activities in the U.S. are not permissible under B-1 regulations, then different and more secure non-immigrant options need to be investigated. While Scott, Larry, Ethan and Edward should be fine under B-1 status right now, as Walker-Ross expands further into the U.S., a different U.S. immigration option will most likely need to be chosen and implemented. That scenario will play out in the next piece of this series—“The Transfers”.

___________________________________________________________________________________________

[1] INA Section 101(a)(15)(B)

[2] Business refers to “conventions, conferences, consultations and other legitimate activities of a commercial or professional nature. It does not include employment or labor for hire.”—22 CFR Section 41.31(b)(1).

[3] The North American Free Trade Agreement (NAFTA), implemented by the North American Free Trade Agreement Implementation Act, effective January 1, 1994, succeeded the United States-Canadian Free Trade Agreement (FTA).

[4](Trade NAFTA), previously “TC” (Trade Canada) under the CFTA.

[5] United States-Canada Free-Trade Agreement Implementation Act of 1988, Pub. L. 100-449, Title III, Division C, 102 Stat. 1851 (effective January 1, 1989)(adding INA Section 214(e), 8 U.S.C. Section 1184(e).

[6] Canadians applying for E-1, E-2 or K status DO require a visa.

[7] A machine readable passport has biographical data entered on the data page according to international specifications. The size of the passport, photograph and arrangement of the data fields, especially the two lines of printed OCR-B machine readable data, meet the standards of the International Civil Aviation Organization, Doc 9303, Part 1 Machine Readable Passports.

[8] The Bureau of Citizenship and Immigration Services’ Service Centers handle the mail, file, data entry, and adjudication of most applications for immigration services and benefits. There are four (4) primary Service Centers—Vermont, Nebraska, Texas and California.

[9] 8 CFR section 214.2(b)(4)(i)

 

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