Can a Canadian be self-employed in the US? -

Subject:        Can a Canadian be self-employed in the US?
Expert:         [email protected]
Date:           Thursday April 10, 2008
Time:           02:09 AM -0000

QUESTION:

I am considering moving to the US however I would not easily qualify for a TN visa under NAFTA.  Would I be able to start up my own business/employment in the US by being self-employed?  Or would I start a company and operate through a company?  What are the tax reporting requirements?

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david ingram replies:

You can be self employed in the US under the terms of an E2 or an E5 visa.  The E5 is as very superior visa and gives you an instant green card but requires an investment of $500,000 US in places like Bellingham and Pocatello Idaho and $1,000,000 in Los Angeles or New York or Chicago.

This older answer will help you.  You cannot just go and start a business without a lot of paperwork and significant investment as you will see in this older reply.


QUESTION: Hi there,

I am a Canadian citizen. Currently, my husband is working overseas and we are living in Saudi Arabia as non-resident of Canada. Currently, I don't have any property in Canada.

I would like to purchase/invest in a business in US and would like to obtain an E-2 visa. What are the legal procedures and documentation that are required to obtain such visa? To apply for this, do I need to have a house in Canada or not.

I am looking forward to your quick response at your earliest convenience.

Sincerely,
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david ingram replies:

An E2 visa is available to you whether you are in Canada or not. It depends upon your Nationality not where you are living.

If you go to www.centa.com, you will find (in the top left hand box) the January 1995 newsletter on E-2 Visa by Dennis Olsen, former US Consul in Vancouver and an issuer of E2 visas until they were moved to Toronto.  In January 2006, the processing of E2s was opened up in Vancouver again and can be processed through the US Consulate in Vancouver if you are from BC and / or the Yukon.  All other Canadians must go through the Toronto Consulate -
find more at http://www.amcits.com/evisa.asp

Start by reading the January 1995 newsletter.  It will give you the rules and it is my impression that the approval is a little easier than this newsletter states now.

You can start the process and maybe make it a little cheaper by filling out Form DS156 at  - https://evisaforms.state.gov/ds156.asp
Note that this is a fillable form

You will also need DS156E  - http://www.state.gov/documents/organization/79963.pdf

You might need DS157  - http://www.state.gov/documents/organization/79964.pdf

You should fill in DS158 for your contact information and work history  - http://www.state.gov/documents/organization/79965.pdf

You can also see basic instructions at  http://evisaforms.state.gov/default.asp

Note that with an E-2, your husband can obtain a work authorization to work somewhere else as a rule.

There will be a couple of more forms but this will get you off to a good start and you can do it yourself.  However, be careful if you look for outside help.

If you need legal help, and are from BC or the Yukon specifically (or anywhere else in Canada),  I could suggest

David Anderrson  LLB, AILA
200-1095 West Pender Street (same building as US Consulate)
Vancouver BC
V6E 2M6
(604) 608-0818 -

David just presented an excellent seminar in Vancouver on E-2 Visas and has an interesting proposal for an E-5 Visa which requires $500,000 US  but is a far superior visa than an E-2.

If you are from Quebec in particular,

Dan Cuppett, JD, AILA
57 Court Street
Plattsburgh, New York
USA 12901
(518) 566-6666
is an Immigration attorney who specializes in Canadians (particularly those from Quebec) to the USA.

Dennis Olsen, author of the Jan 1995 newsletter is no longer practicing law.

http://toronto.usconsulate.gov/content/visas/E-28_TI.pdf

If it is not in this format, Toronto will reject the whole application. 

Vancouver also has its own rules as in

U.S. CONSULATE GENERAL, VANCOUVER
1075 WEST PENDER STREET
VANCOUVER, BC V6E 2M6
Mandatory Formatting Instructions for Treaty Investor (E-2) Visa Submissions
Effective Date: 01 August 2006

Non-compliant submissions will be rejected as of: 01 September 2006

Effective immediately, the Consulate in Vancouver now requires all cases to be submitted in the following format. The E Visa Unit will not accept non compliant cases for processing as of 01 September 2006.

All submissions must be organized into the sections below. Submissions must be bound and the sections must be delineated by clear dividers with tabs that stick out from the edges of the page. Divider pages without tabs are not acceptable. If there are more than two documents under one of the numbered tabs, you must subdivide the numbered sections into lettered subsections with tabs.
Your submissions must be organized in such a way that the reviewer can locate all of the relevant facts to make an adjudication within 5-10 minutes.
Once your submission is prepared as indicated below, submit it to our office by mail or courier. Our addresses for various types of shipments may be found at:
http://www.usconsulatevancouver.ca/content/content.asp?section=visas8document=evisa
#submitting
Required format and contents:
The cover page and application forms must be loose (unbound to the rest of the package) and placed on top of the submission package.

Application Requirements (unbound underneath cover page and on top of the documents brief in the following order):
1. All DS-156, 156E, and 157 forms, filled out using the electronic visa application forms – link available on Toronto’s website (Please note: we require DS-157 forms for all applicants over the age of 16, without regard to age or gender); primary contact email address must be placed in block 23 on the DS-156; be certain to fill in EVERY block on all forms and sign and date; submit only signed original forms.
2. 2X2 passport-style photograph on plain white background taken within the last six months. One for each applicant. See photograph requirements on our website for further details.
3. Certified check or international money order payable to the U.S. Consulate General Vancouver in the amount of $100 US per applicant.
4. Dependents – provide copy of marriage certificate for spouse and copies of birth certificates for all children under the age of 21. Staple these to the DS-156 applications of the dependents applicants.
5. Attached to DS-156 for each applicant, include a signed statement of the applicant’s intentions regarding the temporary or permanent nature of their stay in the United States.

E-2 Requirements:
You must organize the tabbed exhibits following the number/letter outline below. You must submit all of the documents noted here, unless otherwise indicated.
1. Summary
a. Concise comprehensive brief of relevant facts
● Be brief, state exactly and precisely how the enterprise qualifies
● Do not waste space with lengthy citation of CFR or FAM texts
● Make specific reference to supporting documentation, for example:
“The Canadian parent company is owned 100% by the applicant.
See organizational documents showing the corporation is authorized to issue 250 shares (tab 3C(i), relevant portion highlighted), and the applicant’s stock subscription agreement and
share certificate for 250 shares (tab 3C(ii)).”
b. Comprehensive Index/Table of Contents

2. Nationality of the Individual Beneficiary
a. Photocopy of the passport biographic page for investor(s)/employee(s)
followed by copy for each dependent family member
b. Photocopy of landed immigrant card
3. Nationality of the Company/Evidence of Controlling Interest

If your company is an incorporated entity:
a. Chart of ownership of the enterprise
b. Articles of Incorporation and certificate of existence/registration from the state/province in which the company is incorporated.
c. Ownership:
● If privately held by a small group of shareholders, submit i)
evidence of the total number of shares outstanding, and who holds
each, and ii) evidence of the treaty country nationality of the
owners of at least 50% of the outstanding stock –OR-
● If publicly traded, submit i) notarized statement from a duly
authorized corporate officer stating all of the stock exchanges on
which the company is traded, ii) the volume of stock traded on
each exchange (see 9 FAM 41.51 N3.2), and iii) recently published stock quotations
● Please note, for either of the above, if the ownership is traced to
another corporate entity (such as a holding or parent company
rather than an individual), you must also trace the ownership of the
holding company (ies) all the way back to the beneficial individual
owners -OR- if your company is a partnership, Joint Venture, LLC, or similar:
a. Partnership or Joint Venture Agreement
b. Shares/stock certificates indicating total partnership units issued and outstanding, and to whom they are issued
c. Please note, for either of the above, if the ownership is traced to another corporate entity (such as a holding or parent company rather than an individual), you must also trace the ownership of the holding company (ies) all the way back to the beneficial individual owners
-OR- if your company is a sole proprietorship:
a. Business Registration
b. Proof of ownership of business assets (real property, etc.)
4. Source of Investment
a. Detailed statement by applicant explaining how funds used in the
investment were acquired or accumulated
b. Debit and credit services for personal and/or business account withdrawals
c. Documentation demonstrating how funds were acquired or accumulated:
● Transactions showing payment of sold property or business (proof of property ownership and promissory notes) and rental income (lease agreements); -AND/OR-
● Last three years of personal tax returns; -AND/OR-
● Statement from individual providing money to investor as a gift
5. Evidence of Investment
For an existing enterprise:
a. Purchase agreement
b. Proof of financing and funds transfer:
i. Copies of canceled checks or wire transfers from investor for all
deposits, partial-payments or transactions paid in full
ii. All loan, promissory or mortgage documents AND security
agreement; AND, copies of canceled checks or wire transfer
receipts from investor demonstrating consistent payment of
financial obligations. A letter from the financier stating all payments are current may also be accepted
iii. Escrow agreement, escrow account statement in the U.S., escrow receipt, if applicable
-OR- for a new enterprise:
a. Inventory listing: shipment invoices of inventory, equipment or business related property
b. Receipts for inventory purchases
c. Canceled checks or official payment receipts for expenditures
d. Canceled check for first month’s rent or full annual advance rent payment
e. Lease agreement
f. Purchase orders
g. Improvement expenses
h. Initial business account statements
6. Marginality
a. U.S. corporate tax returns
b. Latest audited financial statement or non-review statement
c. Payroll register
d. W2 and W4 tax forms
e. Business plan (including pro forma financials for the first five year of operations)
7. Real and Operating Commercial Enterprise
a. Occupational license, business license or business permits
b. Business transaction records, current/commercial account statements or invoices from suppliers
c. Advertising leaflets, business brochures or promotional literature
8. If the applicant is an employee of the U.S. enterprise (executive/managerial, and supervisory/essential skills):
a. Letter from Canadian company providing specific information on the applicant and the reasons for his/her assignment to the U.S. The letter must explain the employee’s role in the U.S. company (job title and duties), the applicant’s executive or supervisory responsibilities or, if not a supervisor, his/her specialist role, the level of education and knowledge required by the employee’s position, his/her employment experience,progression of promotion or high level training or special qualifications and the reasons why a U.S. citizen or legal permanent resident cannot fill the position (if the position is not managerial or supervisory)
b. Evidence of E-2 company owner’s nationality and immigration status in the U.S.
c. Organizational chart showing current staffing pattern at U.S. company
d. Applicant’s complete resume

You can see that there is a lot to do including a business plan (we can help here) to show that the enterprise will be a success.

Hope this helps -  when you need tax help with all this, you know where to turn.