This article has been written by Thayumana Sundaram.S.
American Business Opportunities
The concept of business start-ups in the United States by Canadian entrepreneurs is not an uncommon Scenario. A lot of businesses operating in Canada want to establish their operations in the US or have already registered their existence in U.S markets, this is because of the U.S market capitalisation.
The U.S market capitalisation is one of the highest in the world due to its Purchasing powers and high consumption economy, which automatically tends to be an attractive location for many business formations, andCanadiansas residents of the neighbouring country , while trying to expand and prosper their business possibilities in the huge, free-market economy want to spread it in the U.S.
Canada with a large reserve of natural resources in the North American continent and sharing the longest border with the U.S, due to their proximity as neighbours, highly educated population, and various bilateral treaties with the U.S, has created huge potential for Canadians to operate the business on both sides.
Volume of trades
This potential was proved from the history of trade made in the past, that is technically the U.S and Canada are constituting one of the world’s most intensive trading ties, which intends to generate millions of jobs in both countries. For simple math, the United States and Canada traded goods and services worth above $600 billion (USD) in the last year alone, both countries are each other’s largest export markets in a specific field, Canada is the top export market for 30+ U.S. states, Also Canada is the single largest exporter of energy to the United States.
The abovementioned, enormous quantity of trade and business is not possible without specialised legislative support, where comes the role of the United States-Mexico-Canada Agreement: The United States-Mexico-Canada Agreement (USMCA) entered into force on July 1, 2020, by replacing NAFTA as the free trade agreement for North America.
The primary objective of USMCA is to generate job opportunities, improve worker protections, increase agricultural trade, produce new investments in vital manufacturing industries, and also protect intellectual property rights, thereby creating enforceable labour and environmental standards, to enhance and extend digital trade protections. These are just a few key areas in which the new standard for U.S. trade agreements is set forth.
Moreover, they have collaborated with the G7 and G20 treaty of political and industrialised liberal economic forums, possibly bringing more future proof business agreements which makes both the countries as inseparable business and market utilisation with each other.
Possible business visa for Canadians
Now comes the crucial part of U.S immigration where the first and foremost step on forming the business in the U.S starts with selecting the right visa scheme based on your future goals and economic conditions, and due to their proximate relationships, there are specific and general visas available for Canadian citizens to start their business this is as follows;
Business and work-Related Immigration Visas to the US
- US H1-B Visa: It is an Employer-sponsored employment visa where the foreign individual will work for the organisation and is highly competitive due to annual limits.
- L1 Visa: specifically transferring executive, managerial or specialized knowledge employees to the US from an overseas “qualifying organization” of the US-based company.
- E1 Visa: Special Treaty-based Trader Visas allow a citizen of a treaty nation to be admitted to the United States to engage in international trade and commerce.
- E2 Visa: Special Treaty-based Investor Visas which apply to the citizens of a specific nation who entered into a bilateral agreement, and allowed them to invest in the U.S businesses.
- EB2 Visa: This is also an employment-based green card visa that grants US Permanent Residence. professionals holding advanced university degrees and of exceptional ability in the sciences, arts, or business. A business owner may be able to qualify if the business will have a significant contribution to the economy.
- EB3 Visa: This is also an alternate preference in employment-based (EB) green card visas to the U.S. It includes Professionals, skilled workers as well as unskilled labourers.
- EB5 Visa: It is considered an Investment Green Card Visa. This allows starting a business in the US, with conditional green card issuance.
Popular visa scheme
So, it is possible for a person to qualify in any one of those extended immigration options to enter U.S jurisdiction, but the most common and even popular business visa schemes opted by Canadians are:
- E-2 Treaty Investor Visa for Canadians
- EB-5 Green Card for Canadians
- H-1B Visa for Canadian Entrepreneurs
The E-2 (Investor Treaty Visa for Canadians)
Step By Step Guide Before Applying for an E-2 visa
To start a U.S. business and to qualify for an E-2 visa, then first the Canadian investor needs to put full investment into the U.S. enterprise. That legally means –
- Setting up a legal business structure (such as an LLC, C-Corp, etc.),
- Getting a Federal Employer Identification Number (EIN).
- Opening a business bank account. Depending on the need of business.
- It may also mean obtaining required permits, inspections and licenses.
- The Small Business Association is a forum that contains a good resource for launching your business.
Invest in the active commercial enterprise:
To qualify for an E-2 visa, Canadians need to invest in purchasing an existing business or start a new business. In the area of active bonafide business, means that the business must be involved in the production of goods or service. Examples of E-2 business include:
- Any Manufacturing or Service company such as
- A Tech company
- Wholesale or warehousing
- Retail or convenience store
- Gas station
- Medical clinic
- To a beauty salon. Etc. whichever it should actively engage,
The business cannot be passive, idle or speculative in nature. The Canadian citizen’s investment should be real and active participation in economic activity. E2 investment doesn’t include the real estate investment, such as buying and flipping real estate; or financial investment, such as buying and selling stocks etc, these do not qualify as a business category.
E2 Investor visas are available only to Citizens of treaty nations. The E2 program is based on the U.S international treaty, and thus visas are available only to that nation citizen which the U.S. has such bilateral treaties.
Notable Remark –
One should invest their money in businesses before applying for the visa, that is, the U.S Department of State requires all E-2 applicants to put their investment at risk before applying. In other words, the business must be purchased or fully set up before submitting its E2 application. But the visa is not guaranteed only because of your investment, if you have $100,000 in a bank account and you intend to purchase or start a business, this will not be sufficient to qualify for an E-2 visa.
The EB-5 VISA
Developing from the simple words stated earlier, the EB-5 was an Investment cum Green Card Visa. This allows them to start a business in the U.S and run it as a green card holder .
The EB5 programme requires the visa applicant to:
- Preliminary condition – Need to invest at least near to $1 million in a business on Targeted Employment Area or more than $1 million in a new commercial enterprise outside target employment location.
- Maintaining condition- create and sustain full-time jobs for 10 Americans employees at least to get qualifying conditions.
Failure to comply with these requirements can potentially cause the Green Card to terminate due to its conditional nature (two-year conditional green card) issued with the EB5 qualified applicants.
Duration and permanency
The EB5 programme provides a direct path to permanent residency, which is supported by a green card. A green card holder can stay in the United States forever, provided they maintain their visa condition timelines and permanent residency status or apply for citizenship.
The EB5 Immigrant Investor Programme is generally viewed more favourably than the H1B program by Americans Because the EB5 programme creates thousands of American jobs and brings billions of foreign investments, whereas the H1B visa often seems a threat to the US native labour force. For that reason, the EB5 programme is not included in the presidential campaigns on “immigration ban” policies as the H1b visa faced during the Trump administration.
EB5 visas are subject to an annual cap. Because EB5 visas are subject to annual intake limits, it is competitive to qualify for an EB5 visa, due to the long waiting period after applying to get the visa.
Similarities of E-2 and Eb-5 visas
Both the EB5 visa and the E2 investor visa allow foreign nationals to enter the United States by their substantial investment in a United States business. However, there are some significant similarities and differences between the two programs, on grounds of eligibility, duration, finance, applicable to the investors They are discussed below;
Key takeaway – Legal Status of EB5 vs E2
The Major difference is the legal status achieved from that both visas that are The EB5 visa is considered as a permanent resident (“green card”) visa,
whereas the E2 Investor program is a temporary visa. However, the E2 visa can be renewed unlimited times, till the visa holder qualifies the eligible condition.
Other Eligibility for EB5 and E2 Investor
- Both types of visas require a substantial investment in a U.S. business. For purposes of an EB5 visa, the minimum investment is either $500,000 or $1,000,000, depending on the operation area in which the investment is made. However, the investment is more flexible for E2 visas where the investment is determined based on specific business requirements, which is derived by the regulatory board.
- Job creation. However, the requirement for E2 visa applicants is again more open-ended. While the EB5 visa requires a minimum of creation of 10 full-time jobs for Americans.
- Active business. This is the one area where the E2 visa applicant is held to a higher standard. All E2 visa holders must engage in the active role of their business, whereas the activity requirement is relaxed for EB5 applicants whose investments are done through the regional centre.
6.4 Key Remarks
Even many of the requirements for an EB5 and an E2 Investor visa are similar. But generally, the requirements and investments are a little higher for the EB5 visa, due to its option of green card status.
The H1B VISA
The requirements of the H1B visa and the other Investment visa are very different. The H1B programme is focused on employment.
H-1B program allows companies and employers in the US to temporarily employ foreign workers in occupations that require the theoretical and practical application of highly specialized knowledge and higher education in the specific field, some of the key requirements for H1B include,
- that no Americans currently available to fill the specific job;
- The applicant holds a bachelor’s or higher degree (or an equivalent to the U.S)
- 12 years of work experience.
- Or a combination of both work and studies in a specific field.
Duration and permanency
The H1B visa is a temporary non-immigrant visa that is initially valid for three years and can then be extended for another same period of years. After the expiration of the maximum time of stay, the foreign employee is required to leave the United States or obtain different immigration status.
Here comes the Sensitive area of immigration. This visa alone constitutes a huge political debate and even runs presidential election campaigns, yes the H1B visa is always under the scrutiny of job security for Americans. There may always be tight restrictions on the H1B visa entry. During Trump’s administration, it was proposed to reduce one-half of intakes with America first policy, but Bill doesn’t pass to become act as of now.
Alternative L1 visa
The L-1 visa offers similar facilities to the H1B visa without an annual cap. The L-1 visa is for specifically transferring executive, managerial or specialized knowledge employees to the US from an overseas qualifying organization of the US company, that is inter-company transfers due to the requirement of a highly qualified person.
An applicant must set up a new US office and move there to manage that office on the L-1 visa. The existence of business in the U.S is the major condition to transfer with the L1 program.
Finally, the big business opportunity of Canadian-American comes with few technicalities, starts from whether you are interested in pursuing an EB5 or E2 visa and enter the U.S as an investor or else looking to obtain an H1B visa and thereby start working on your business, everything purely depends on your business goals and requirements, but before opting for any schemes, one should go through the intensive research about visas in the following aspects:
- Analysing pros and cons of each visa.
- Assessing your eligibility for each type of visa.
- Business priority and Goals.
- Economic condition for next 5 years.
- Assembling the comprehensive documents requirements.
- Assessing the state protocols and timelines.
Selecting the appropriate visa for you and your business will be half a success in the business immigration process, so research well and consult with U.S immigration lawyers or similar Canadian communities who have already gone through every stage so that they can guide you in the process of creating a successful U.S business entity.
- Government Immigration and Citizenship Data: https://www.uscis.gov/tools/reports-and-studies/immigration-and-citizenship-data
- U.S. Relations with Canada – United States Department of State: https://www.state.gov › us-relations-with-Canada
- visa state requirements: https://canadiansinusa.com › investing-in-the-us ›
- Expand or relocate a Canadian Business to America: https://toughnickel.com/starting-business/Canadian-Business-in-America
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