- Doing your research and considering the planning piece is key for combating the global immigration minefield
- Building a strong network is vital for expansion
- There are three primary visas for UK founders to use: E visa, L visa, O1 visa
Setting the scene
Within the context of the startup, grow up and scale-up life cycle of a venture backed tech company, the topic of internationalisation soon emerges and typically the focus of the discussion is on the US. From our personal experience and from discussions with founders we know that a critical success factor is one of the founders, and often a few hand picked employees, moving to the US. This process can be a minefield and requires dedicated time and effort.
We discussed this topic with Elizabeth Jamae the founding partner at Corporate Immigration Partners. Elizabeth supports European Notion companies address their immigration challenges getting into the US, and is responsible for immigration strategy and implementation.
US immigration is a a hot topic
Over the last four years, the US administration has not hesitated to issue quite a few executive orders, which really influenced how businesses could come and go from the US, build and expand. Then, on top of that, you have the global pandemic, that also has had consequences for travelling, and it really has jolted the flow of individuals through the world. We’ve been hit really hard with executive orders and the pandemic, so there’s a lot of uncertainty. I do think companies are a little bit hesitant, although I have been astonished at the resilience of startups, and the ability to keep functioning within such tight controls.
Founders must think holistically about immigration and build a strong team to support them
You really need to think about your inward expansion into the US holistically, and you need to bring together a solid team of tax corporate immigration professionals and have that team working together. The mistake that I see that really does influence success for founders early on who are expanding into the US, Australia or Singapore, is that they don’t do enough research upfront, they do not connect their trusted circle of advisers together and they don’t know that information early enough.
The first thing you do is reach out to your trusted set of advisors, connect them and talk to them about all the pitfalls with immigration. For example, I really would love people to start six months out, maybe even six to nine months out, given the current situation. So, start these conversations early, know what you’re up against when you go and talk to your investors, because your investors inevitably want to know, how hard is it going to beat it and make this lift into the US? Then get the advisors talking amongst each other so they can create a strategy, because oftentimes, I can be pretty creative on the immigration side, but there’s not a lot of leeway on the tax and corporate side. I want to be able to set you up for success by working with the other advisors. That’s the first thing you want to do, is make sure you have your team working together.
The second thing you really want to explore is long term implications, don’t just think about the moment. A lot of individuals are so anxious, and they have so many things going on, they’re trying to hire their first sales person in the US, they’re trying to go to market strategies in both the US and APAC. Their time is short, so they really want to rush and I don’t blame them. But, you really need to know what the pitfalls are there and make sure that you’re figuring out what long term implications are, based on what visa you’re looking at. An example of this is, if you want to live in the US for just a couple of years to get your business going and then you have every intention to go back. That might have an implication on what types of visas we use versus common situations. Another example is that you’re married to a US citizen, and you have permanent residency complications or issues to sort while you’re working on a temporary work permit. There’s just a lot of things you need to consider both short term and long term.
Make sure you build a strong network with the best providers if moving to the US: Wilson Sonsini (for Corporate Law), US Tax and Financial and Global Tax Network. And of course Corporate Immigration Partners.
The starting point for any European founder considering US expansion is to talk to Dan Glazer, the founding partner of Wilson Sonsini London. I swear he’s given me an honorary degree in the do’s and don’ts of US expansion. He’s a phenomenal leader and a phenomenal individual. I don’t think I trust another corporate lawyer, like I do Dan, and he’s just an all around good guy.
Then for tax, there’s a couple of groups that I would recommend, there’s US Tax and Financial, who I’ve worked with quite a lot. They’re based in London, and a couple of other locations in the EU. They have quite a few individuals that came from the big four that are now there, and I’ve always been impressed with their ability to really focus on the important parts for founders and individuals. It really depends on when they initiate these conversations, are they still in the UK and have plans to keep their residency there?
If they’re in the US, and they intend to do a long term stint, they might want an individual that’s based in the US. If that’s the case, there’s a wonderful group called the Global Tax Network (GTN). I use them quite often if the individual is already in the US and needs to seek tax advice. I think it depends a lot on where they’re located at the time you initiate the relationship and some of the personal desires of the founder. The other thing you need to rely on when you’re looking for your advisors, is to really find some that have strong networks of their own because that’s going to make a huge difference. Networking is also a very important area of expansion.
We don’t anticipate different treatments for the UK once it formally leaves the EU
I don’t necessarily think there will be any kind of real changes or see any implications for UK nationals. I do think it will have implications for the structure of how companies are operating within the EU and the UK, in how they set up the tax implications, and that will naturally cause a ripple effect with immigration. But, you won’t see a huge impact on US immigration for the founders, and this is not necessarily a Brexit issue, but just given the fact that the US embassies and consulates around the world have been closed for a better part of 2020, and there’s a huge backlog. I think in general, the important thing is to plan accordingly based on what country you’re coming from and what is the US embassy’s backlog in that country. It’s more of a backlog versus a Brexit issue.
These are some of the common US immigration choices
Unlike other countries, Australia for example, that have many different types of ways you can get in, the US is quite limited in their visa categories that founders can use. If we’re focusing on the UK for primary visas for founders, there are:
- E visa
- This is a Treaty visa, which can be used if you’re investing or you’re trading with the US quite extensively.
- L visa
- This is an intercompany transfer visa, so for executives, managers, and also essential employees. But for the founders, it would be the L1 visa.
- O1 visa
- This is sometimes used if, for example, you’ve received a lot of publicity, you have some interesting, original scientific contributions to your area.
Then, very rarely for founder’s we use the H-1B. To qualify for the H-1B visa category, the prospective H-1B employee must hold a U.S. bachelor’s or higher degree, or the equivalent. The person must hold a U.S. equivalent 4 years’ bachelor’s or higher degree from an accredited college or university.
As far as UK individuals, we usually go to the E visa first, mainly the E2, because it’s relatively quick and easy to set up in London and pretty stable. It’s still stable, given the year that we’ve had, and I’m happy to say that the US Embassy in London is up and running. They’re actually doing a really great job of pushing cases through that have been sitting since March. Those are the categories of visas that I would look at, focusing mainly on the E2.
One other important aspect to consider is, can my spouse work? Spouses can work with the E2 visa and the L1 visa, and that is very important. However, spouses cannot work with the O1 visa and the H-1B. Also, certain visas have wages attached to them. If you have the H-1B visa, for example, you must pay a certain wage to qualify for that visa. This is not necessarily a problem for founders, but when you are on a very restricted budget, trying to launch in the US, it is a consideration that we need to take. This is when the long term planning comes in, what are your intentions? How long do you want to stay in the US? It’s interesting because the E2 is renewable indefinitely. So, you can sit on an E2 visa for many, many years, it’s super flexible. However, the L1 visa, for executives and managers, is limited to seven years.
There are some risks founders need to be aware of, in terms of immigration status
As I have said before, you really need to consider the planning piece. If you’re so lucky to be successful and you end up getting acquired, acquisitions can actually lead to immigration issues. When you find yourself in that position, consulting with your immigration attorney on how an acquisition will affect your underlying immigration status is extremely important, because I have seen founders stuck in a pretty precarious position. It’s great that they’re being acquired and they’ve had a lot of success, but there are ramifications for their issues, and that mainly revolves around the ownership piece of the company and who owns the company.
The other issue I previously brought up was the spouse work, I think a lot of times that can cause some tension. Going back to the holistic approach, you have to think of immigration, from the founders family’s perspective, from a business continuity perspective and from a long term viability in the US perspective. There are many different things you need to consider, and that’s why you need to start those conversations many, many months in advance.
Executive orders made the US immigration process a dynamic situation, and its unclear as yet how that will play out.
2020 has been a dynamic year to say the least! I do see things continuing as they are and being challenging to get to the US quickly, well into the end of 2021. Realistically speaking, I think that if you’re looking to be in the US, fully functioning with your family here towards the end of 2021, I would start that process now because it could take realistically nine to twelve months to get over here. That being said, it’s not impossible. I have been extremely happy with the approvals that we’ve received out of the US Embassy in London and USIS (US Immigration Service). They have been approving quite a lot of, what I would consider, founder visas. Ultimately, I do think that the troubles and the issues we’ve seen in 2020 will unfortunately continue well into 2021.
There are implications for different types of employees, other than founders
It has always been very hard to get even an executive level sales and marketing team over to the US. Traditionally, we see founders that move over, and then the next group of individuals are executives in the sales and marketing. Usually, European companies keep the development teams in Europe, for obvious reasons. I really would love to stress that if you are planning on bringing even executive level C suite sales or marketing members, it is going to take a special approach to get them over, especially if you have to utilise the L1.
For example, if you’re a UK based company of UK founders, you’re predominantly UK owned, but your head of sales or your head of marketing is Swedish. We might get an E visa to get the founders over, because it’s the fastest and simplest way. Then, we have to do an L1 one for that sales executive. When you start doing L1’s for sales and marketing, it can really get complicated. So, you really need to have an individual, or your advisor, know how to work those cases, because you need to present a more technical case than you would imagine.
There are particular challenges that exist outside of the US and Europe
Australia is still very much open to skilled groups that are really needed for recovery, and as their internal borders open up, their international border will too. I would say out of the countries we’re talking about today, Australia is probably the easiest to get into and to be functioning quickly.
Singapore is a lot like the US right now. If you’re in Singapore, just like if you’re in the US, and you need to apply to change a visa or change companies, it’s actually rather straightforward if you’re already in the country. If you’re outside of Singapore, and you’re applying to get in, they have something quite similar to what we have here in the US, which is national interest exemption. So, you can get an approval for a visa, but you need to take that extra step and prove that it’s in the national interest to actually be allowed to come in.
China is complicated because immigration is regionalised not centralised. Also, it is very political, especially if you are coming from certain countries in the world trying to get visas.
I would say that’s the general layout of the world. Of course, we have travel bans right now into the Schengen area, and vice versa. We’re seeing virtually no back and forth between that area and the US. It’s not impossible, but I think one of the things that I would think about, especially with Notion Capital companies, was I noticed that they really do tend to go into Australia, Singapore, and then launch into the US, or vice versa. By knowing your global strategy, your global rollout of your offices and where you think you’ll go, knowing that upfront, talking to your immigration adviser on the global level, will really help you plan. For example, a founder wants to come to the US, they need to be on the ground for twelve months and know that they’re going to Sydney next, make sure that your immigration adviser knows that’s the plan so that they can work to coordinate and possibly work in conjunction for your US and Australian immigration issues.
We have some basic hopes for 2021 and 2022
I would love for there to be a stabilisation of our immigration policy, and this is not even in any way political but it’s just been a little bit up and down as immigration attorneys have had to use the courts a lot more. So, just to see a stabilisation and see some actual reform where it is needed. There is no doubt, and this is not controversial, we do need to have some immigration reform, in the US we’ve needed it for quite some time. By having our government consider American Immigration Lawyers Associations advice on reform would be excellent, they advocate for change that will really impact a positive immigration reform.
Of course, a vaccine, which is not related to immigration at all, so that we can get back to normal! It’s been amazing the ingenuity amongst all of us in pushing things forward and finding ways to function quite successfully. I really would like to see in-person meetings and getting to know someone come back to a little bit of normalcy. I’m realistic, and I know that we don’t quite know what normal will look like.