Charles M. Goldsmith Immigration Law Blog on Lawyers.com

Some of our clients who have approved “E” visa registrations at various consulates around the world have recently been refused “E” visas for new transferees to the United States based on changes in either the company’s ownership or its trade percentages.

As you probably know, to qualify for E-1 or E-2 status, a company must be at least 50% owned by nationals of the treaty country and to qualify for E-1 status, at least 50% of the trade of the U.S. company must be between the country of nationality and the United States.  In most situations, there are a number of alternatives a company has available to still bring the individual to the U.S. 

Another concern is the impact this loss of qualification may have on the current E visa holders and their families who are already in the U.S. with E status.  For the sake of simplicity, let’s assume the company is Japanese and the concerned transferees are Japanese, although the issues and alternatives discussed below would apply to any country with an E treaty.

Scenario 1

What if the company is no longer owned at least 50% by Japanese nationals?  The obvious choice would be the “L” visa, as long at the prospective transferee has been employed for at least one out of the last three years outside the U.S. by the parent, a subsidiary, or an affiliate company.  As with the E, we must be able to prove the applicant has been employed in an executive, managerial or specialized knowledge (essential skills) capacity and the U.S. assignment also qualifies under one to those classifications.  For companies that qualify for a blanket L approval, this should be obtained as it would significantly reduce the processing time and costs associated with individual L visa petitions.

Scenario 2

If the company loses its E-1 status simply because its trade is no longer at least 50% Japan/U.S., it can probably qualify for E-2 status based upon its investment in the U.S. business enterprise and its employment of U.S. workers.  In reality, there is very little difference between having E-1 or E-2 status.

In both of the above scenarios, if the L or E-2 is not available, an H-1B visa can be obtained for university graduates who perform jobs that require their university-learned skills.  At the present time, these visas are available but they might not be available later on in the immigration fiscal year as there are only 65,000 H-1B visas allowed per year.

Scenario 3

What should you do with current E-1 visa holders (and their families) who are already in the U.S. is a more difficult issue.  To ensure 100% compliance, once a company knows it does not qualify for E-1 status, they would be required to file a change of status application with USCIS to one of the above-mentioned visa categories or obtain a new visa by having their employees travel overseas and apply for new visas.

From both an inconvenience and financial standpoint, this would be quite burdensome for companies with a significant number of E-1 visa holders.  From my experience, the Consuls in Japan and the USCIS are usually understanding about delays in full compliance in these instances, so it is recommended that the company at least does the following:

1.      The next time the employee and their family travels to Japan, they should obtain either E-2, L, or H-1B visas as mentioned above, so that upon their re-entry into the U.S. they will be admitted with the proper visa classification.

2       Recommend to staff that they not travel outside the U.S. because an attempted re-entry under the E-1 visa classification could be problematic.  Although it is unlikely that the CBP inspector at the airport will know of the company’s loss of E-1 qualification and will probably admit the individual in E-1 status, this would certainly be inconsistent with a company’s policy of full compliance with our immigration laws.

If you are facing this type of situation, please contact our NY immigration law firm or your immigration attorney, as a plan should be designed and instituted to avoid potential problems with USCIS and consular officers.