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This came from David Andersson a US Immigration Lawyer in Vancouver =
([email protected]). David is also the president of the PACE =
Organization http://www.pacebordertrade.org an excellent organization =
for any business or individual with business operations in the US. =
David's contact numbers are below.
-----Original Message-----
From: David Andersson [mailto:[email protected]]
Sent: Wednesday, January 14, 2004 11:13 AM
To: [email protected]
Subject: Re: Dual visa - H1 and E2 or H1 and E5 visas at =
the sametime.=20
David
Here's the definitive answer to the question. A person may only hold =
one non-immigrant status at a time in the United States. If a person =
holds an E2 visa and then applies to change status to H1-B (and that =
petition is approved) then the person will have H1-B status in the U.S. =
There is an adminstrative law principle called the "Doctrine of Last =
Action" which governs non-immigrant (and some other) status in the U.S. =
Therefore the most recent application approved (whether through a =
service center or a port of entry inspection) is the legal status of the =
person concerned.
Hope this helps.
David Andersson
ANDERSSON CROSS BORDER LAW CORPORATION=20
Barristers and Solicitors - Attorneys at Law
=20
K. David Andersson, Barrister & Solicitor (B.C.) Attorney at Law (Wa.)
Christine Condy, Attorney at Law (Ca.)
Chris CT Lee, Barrister & Solicitor (B.C.) Attorney at Law (NY)
=20
200 - 1095 West Pender Street
(In the US Consulate Building)
Vancouver, British Columbia
Canada V6E 2M6
Phone: (604) 608-0818
Facsimile: (604) 608-2818
=20
E-mail:=20
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
=20
This E-mail may contain PRIVILEGED AND CONFIDENTIAL =
solicitor/attorney-client communication. Unauthorised use is prohibited. =
If you have received this message in error, please return the E-mail =
immediately to sender, without reading or copying, and delete the =
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----- Original Message -----=20
From: [email protected]=20
To: CENTAPEDE=20
Sent: Wednesday, January 14, 2004 3:06 AM
Subject: Dual visa - H1 and E2 or H1 and E5 visas at the =
sametime. - Dennis Olsen, former US Consul in Vancouver's guest letter.
=20
QUESTION:
I have searched the internet and the uscis.gov (immigration and =
homeland
security site) site but cannot find any information on this question. =
If a
Canadian in a holder of an H1 visa and would like to start up a =
business in
the US on their own (different than their current employment):
1. Can they apply and hold dual visas?
2. If so, which visa would that be?
Thanks,
MXXXXXXXXXXXXXX
=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=3D=
david ingram replies:
I do not have a clue and am too busy to do any research and try and =
look like I do know it all. However, this goes out to enough US =
Immigration People that hopefully someone will have the answer and let =
me know in which case, I will pass it on with credit.
In 37 years, I have never seen anyone with an H1 and an KL1 at the =
same time, never seen anyone with two H1B's at the same time but have =
seen two people with H1B's and TN's at the same time but do not know if =
that was officially legal or just happened. I do not have anything to =
do with the issuance of either visa and was just doing the tax returns.
I have participated in multiple TN visas and the most I know about is =
8 for the same person at the same time for 8 different US Employers on a =
part time Management Consultant Basis. (I love doing Management =
Consultant TN visas because I know and understand what a management =
consultant "is")
To start your own business, the logical visa is an E2. Find out more =
about E2 visas by going to www.centa.com and reading the January 1995 =
newsletter. =20
Heck, I will just reproduce it as published here - I am not going to =
edit it - it is as written in January 1995 by Dennis Olsen who was the =
guy that issued E2 visas in Vancouver before they moved that function =
to Toronto.
The E-2 U.S. Investor's Visa=20
Over the last few months, an amazing number of individuals have =
approached my office about going to the U.S. to work or about expanding =
into the U.S. or about claiming their U.S. citizenship.=20
While looking for new information, I was fortunate enough to obtain a =
copy of the following which was written by Dennis Olsen, the U.S. Consul =
in Vancouver in 1992, 1993 and part of 1994. Mr Olsen's background =
includes a stint as law clerk for the U.S. Court of Appeals in Denver; =
Director of the Marshall Island Legal Services Corporation in =
Micronesia; Associate Professor at Gonzaga Law School; Fulbright =
Professor in Malawi, East Africa; and political and consular officer for =
the U.S. Foreign Service in the Philippines and Guatemala. Mr. Olsen is =
fluent in Spanish and has affiliations with immigration consultants in =
Taipei, Beijing and Manila.=20
He is available now as a U.S. Immigration Attorney in Everett, =
Washington at (206) 304-1030 or at the office of his Vancouver partner =
Michael Jacobsen at (604) 736-0065.
=
-------------------------------------------------------------------------=
---------------------------
NEW LIMITATIONS ON E-2 INVESTOR VISAS
by
Dennis F. Olsen
In the fall of 1993, the U.S. State Department adopted new regulations =
which limit and complicate the kinds of investments Canadians must make =
when applying for investor visa status in the U.S. These regulations =
require the commitment of fixed percentages of capital when Canadians =
and citizens of other treaty signatory countries make capital =
investments in U.S. businesses in order to obtain "E" investor visas.
A long standing treaty provides for investment in a business as a =
basis for obtaining residence in the U.S. This is known as "treaty =
investor" status and is embodied in the E visa. The E visa provisions =
allow a Canadian - either an individual or a company - to purchase an =
existing American business or create a new business and then apply for a =
non-immigrant visa based upon this business ownership. In Western =
Canada, these applications are usually processed through the U.S. =
Consulates in Vancouver and Calgary.
The E visa regulations require the commitment of a fairly large amount =
of money, a "substantial" investment in the words of the regulations. =
Investments in the range of twenty-five to fifty thousand dollars are =
generally considered the minimum amount that satisfies this requirement. =
Next, the regulations require that this money be "committed," that is =
unconditionally paid toward the purchase or creation of the business. =
New regulations adopted in July of 1993, add a third financial =
requirement: the committed capital must represent a certain percentage =
of the over-all value of the business.
THE WAY IT WAS
Before the new regulations, this requirement of investment as a =
percentage of the stated value of the business was present only as an =
implicit part of the more general "substantiality" test. The Consul =
adjudicating the case could make an over-all appraisal of the size of =
the investment to determine its "substantiality," decide if a reasonable =
portion of it was firmly "committed" and approve the visa based on these =
generalized criteria. This method of assessing E visa applications was =
compatible with investor practices. In cases where the value of the =
purchased business was high - over, say, $250,000 - the "substantiality" =
was easily found and payment of a reasonable amount of the large =
investment was generally accepted as a sufficient "commitment." In the =
case of the $250,000 business, a pay-in of $50,000 was probably enough.
This approach reinforced the basic purpose of the treaty investor =
program which was - and still is - to induce responsible entrepreneurs =
to bring investment capital to the U.S. and establish businesses that =
will create jobs and otherwise benefit the local economy. The bigger the =
business that could be established with available capital, the more jobs =
and benefits to the U.S. economy. So if the purchase of a business whose =
total value was $50,000 where $25,000 had been committed would qualify =
for E status, then a down payment of the same $50,000 to buy a much more =
substantial business was even better since it represented a more serious =
undertaking in which the investor had a great deal more at stake and a =
great deal more to offer the local economy. NOT SO under the new rules.
THE NEW RULES
The new regulations impose a recommended schedule of fixed percentages =
of capital that must be committed in order to qualify for a visa. The =
percentage required depends on the total value of the business. The =
"Proportionality Test," as it is called in the new E visa regulations, =
require a high percentage of committed capital in small businesses. In =
businesses valued below $100,000, the required capital commitment is 75 =
to 100%. In the $100,000 to $500,000 range, the requirement is 60%; =
between $500,000 and a million, 50% is required. In the case of big =
businesses above a million, only 30% is required.
If applied literally, the proportionality test will disqualify a high =
percentage of current E visa applications. In Vancouver or Calgary, the =
average E investment is in the $100,000 to $200,000 range. A typical =
case might be the purchase of a small restaurant or trailer park just =
across the border. The restaurant is for sale by the retiring American =
owner for $150,000. The American is willing to take $50,000 down and =
payment in a year of another $25,000, the balance to be paid in monthly =
installments over the next five years. In the past, if other routine =
requirements were met, an application based on this deal would likely =
have been approved. Under the proportionality test, the application =
faces probable rejection at the Consulate. The value of the business is =
$150,000 and the $50,000 down is only 33% of the total value. Even if =
the potential E investor were to raise the ante to $75,000 down, the =
deal 's still only 50% paid for and the E schedule requires 60%.
The proportionality test runs harshly against the grain of typical =
business practices. In the example above, a $50,000 down payment to buy =
a going concern valued at $150,000 would likely be accepted by the =
seller. Based on the many E cases I review in my law practice, $50,000 =
would be considered acceptable (even generous) by most sellers, =
especially in the case of high risk investments like restaurants.
Limiting Factor is Cash
In these small business cases, the limiting factor for the buyer is =
often the amount of ready cash. The restaurant buyer in our example may =
be willing to put up the 60% but often just doesn't have the money. Here =
the new rules are often an absolute bar with the investor who has =
$50,000 and needs $100,000 being no better off than the investor who is =
broke and needs $50,000. What about borrowing the extra fifty? More bad =
news: borrowed capital is generally not considered in assessing E =
applications.
Worse news yet is that the effects of the proportionality test on big =
investors are just as disconcerting. Where the small business person is =
limited by the amounts of available capital, the large investor seeks to =
maximize his market position by controlling the largest amount of assets =
with the least amount of money. Leverage for the large investor is the =
name of the game. Here's a direct quote from the regulations: "In the =
case of a million dollar business, a lesser percentage might be needed, =
but 50-60% investment would qualify." (Sadly, the drafting of these news =
laws is even more grotesque than their effect on business.) With huge =
price differentials in real estate, Canadian entrepreneurs look =
longingly at land just across the border.=20
New Rules are against General Business Practice
These proportionality rules strike at the heart of the typical - =
highly leveraged - real estate purchase. Let's say that a Canadian =
developer wants to buy a marina in Bellingham for one and a half =
million. The banks generally require 25% down to finance such a =
commercial enterprise, or $375,000. The E rules require $750,000, more =
than twice what the bank wants and hardly a clever leveraging of the =
buyer's investment capital.
These rules will not stimulate the southern flow of risk capital, to =
put it mildly. With NAFTA and economic free flow a goal actively mouthed =
by President Clinton as an important North American priority, the =
tightening of investor rules seems particularly ill-timed, even =
hypocritical. Yet the rules themselves do not dictate the unseemly =
results sketched above. The Foreign Affairs Manual (where the percentage =
requirements are found) states, "Assessing proportionality requires the =
use of judgment that takes into account the totality of the factors =
involved; it is not a simple arithmetic exercise. The following examples =
(where the ratios are found) are not to be viewed as bright-line =
requirements." I.E. a responsible developer with $300,000 and bank =
approved financing to buy a million dollar Marina that employs six =
Americans ought to be considered "substantial" within the meaning of the =
rules even if his down payment only represents 33% of the value of the =
business. This is especially so when the same investor could take a =
tenth of his $300,000, buy a real estate consulting firm which employs =
one secretary and obtain a visa easily; the value of the business is 100 =
percent of the amount of the investment.
The rules are new and hopefully the U.S. Consulates in Canada will =
apply them in a way that serves the over-all purpose of stimulating =
rather than thwarting responsible investment. Certainly the rules =
themselves allow latitude in applying the stated percentages. In fact, =
these are not really stated as rules but general criteria. If the rules =
are not - as they self-announce - "bright-line requirements" then they =
should be interpreted in a way that serves the over-all purpose of the =
investor treaty and is consistent with American policy statements on =
free trade.
Unfortunately, numbers, once stated, take on a life of their own. This =
is especially so in administrative decision making. If the marina =
investor can depart from the 50% requirement because of the solidity of =
the over-all investment package, then the consular officer must decide - =
by how much? And if the Marina case is approved with a $300,000 down =
payment, then how is the next case where the down payment is slightly =
less to be decided? However much the rules may undercut normally =
packaged investment proposals, they will tend to be applied as stated. =
For under-staffed Consulates with large numbers of cases that must be =
decided within a short time, this approach achieves both consistency and =
efficiency. There may be some departures from the stated percentages but =
not very much.
Rules are Rules
So expect the E rules to be stringently applied. On the bright side, =
with responsible advice, many responsible investment plans can be =
structured in a way that allows compliance with the proportionality =
rules. For example, the rules still allow latitude in the valuation of a =
business. The proportionality test requires comparison of the amount of =
investment as a percentage of the "cost of the business." =20
Good Will not necessarily Part of Business
Elsewhere, the regulations state that "the cost of an established =
business is generally its purchase price, normally considered its fair =
market value." Sometimes an investor is buying different assets, not all =
of which need to be included in the fair market value of the business. =
For example, small business sales often contain a covenant not to =
compete. In our restaurant example, the seller may have agreed within =
the sales contract not to open a another similar business in the same =
area. If the total price is $150,000, the fair market value of the =
covenant not to compete may be $50,000. This latter sum is arguably not =
part of the "purchase price". When providing criteria for the =
calculation of purchase price, the E rules generally rely on a listing =
of "assets necessary to run the business." The covenant not to compete =
is not necessary to run the business and therefore excludable from the =
purchase price. The Canadian buyer pays $75,000 down for the $100,000 =
purchase price and enters into a collateral contract to pay an =
additional $50,000 on mutually agreeable terms for the covenant not to =
compete. The E investment ratio is satisfied.
In the same way, where the seller agrees to actively assist the new =
owner during a transition period, a consultation agreement between buyer =
and seller can be fairly valued and agreed to outside the of the actual =
purchase agreement. This is, in effect, a severing of the part of a =
sales contract often included as "good will." Since it is not actually =
necessary as an asset "needed to run the business," it could be =
appropriately excluded. In our example, such a sale of good will could =
be worth a lot if it included performance of services over a period of =
time. If the fair market value of the consultation agreement is $50,000, =
the real assets can be sold for $100,000 and the down payment of $75,000 =
satisfies the proportionality criteria.
Creative Offers will Qualify
In other cases, many businesses are, in fact, incremental sales where =
purchase of the first increment is independently sufficient to qualify =
for an E visa. A 75 unit trailer park whose total value is $300,000 =
could be sold in three parcels. If the sale of the first parcel is =
otherwise valid under the E criteria - substantial, committed, not =
marginal and so forth - it may be permissible to base the E application =
on the independent sale of the first increment and substantially reduce =
the percentage of committed capital required by the E ratios.
Lastly, in many common situations, other types of visas may more =
appropriately fit the need of Canadian businesses. The L visa allows for =
transfers of employees from the Canadian parent company to a U.S. =
affiliate under a variety of circumstances. The Free Trade agreement =
allows Canadians from many different occupations to work in the U.S. for =
American employers. The Immigrant investor visa provides for permanent =
residence for large investors.
In all these examples, it is important to take the demands of the E =
visa regulations into account at the earliest possible stage of the =
negotiations. With good business and legal advice, sales can be =
structured to both meet the demands of buyer and seller and the E visa =
ratios. If the requirements of the Canadian buyer's visa application are =
made known to the seller early on, this structuring can include =
provisions which responsibly satisfy U.S. visa regulations and still =
meet the business needs of both parties. Alternatively, other visa =
provisions may exist which allow residence in the U.S. under suitable =
circumstances.
Dennis Olsen J.D.
Remember again - That Free US Tax Assistance from the IRS. Call (604) =
685-4311, ext 246 to register for individual appointments or for a =
seminar.
BANKERS / ACCOUNTANTS! Put this Page in your diary for Future Help!
Tax Preparation and Other US / CANADA Information Sources
some of our own CEN-TA RESOURCE Personnel at (604) - Fax (604) =
913-9133 are:=20
* David Ingram - US / CANADIAN Tax Advice and preparation for =
individuals and corporations. Author of the multi-user, multi-office in =
house computer personal tax program.
* George Hatton, CA Canadian Corporate and Individual Tax Advice and =
Preparation. George has written our in house computer Corporate Tax =
Preparation Program. George and David specialize in RRSP and mutual =
funds for "out of country" situations.
* Sonja Clark, CA, CPA, LLB - Although she has a law degree from UBC, =
Sonja does not function as a lawyer. With her CPA and CA degrees and =
accounting background, Sonja is our US corporate tax specialist.
* D'Arcy von Schleinitz is working on his accounting designation but =
spends most of his time backing up David Ingram with his clients.=20
Other Outside US / Canada resource persons I should mention are:
CANADIAN IMMIGRATION (to Canada)
David Stoller, LLB at (604) 922-4702 (Fax 922-0374)
United States Immigration (to the U.S.) (in alphabetical order)
Greg Boos, LLB in Bellingham at (206) 671-5945 (Fax 676-5459) (Greg =
Boos is extremely knowledgeable in Native Indian Cross border Issues as =
well)=20
Ruben Briones at (604) 278-3360 (Fax 278-3521) is an obliging (but =
strict) US Immigration Officer in Vancouver for those seeking a Treaty =
Canada Visa to the US. He is free. If you are looking for a package of =
U.S. waiver forms, his office can send them out.
Mark Carmel, J.D. at 366 North Broadway, Jericho, New York, 11753, or =
1500-5600 Yonge St., Toronto, ON, M2M 4G3, (905) 736-1792, Fax (905) =
738-0756, or=20
Michael Jacobsen J.D. at (604) 736-0065 - Fax (604) 736-0032 or his =
Everett partner=20
Dennis Olsen, J.D. (former U.S. Consul in Vancouver, now practicing in =
Everett, WA) at (206) 304-1030, Fax (206) 304-1065 (Note Dennis Olsen =
also works with Customs)
Terry Preshaw, J.D., in Vancouver at (604) 689-8472 (Fax 688-0099);=20
US Tax Preparation - Warren Dueck CA, Ernst & Young, 600 W Georgia, =
Vancouver, BC (604) 683-7133 - Fax (604) 643-5422
http://www.centa.com/Centapede/0196.html=20
[ Home ] [ Books ] [ Newsletters ] [ Tax Guide ] [ Major Features ] =
[ US/Canada Taxation ] [ Entering the US ] [ Search CEN-TA ] [ Contents =
] [ Contact Us ]
[ Up ] [ Next ]=20
Copyright =A9 1996-2004 The CEN-TA Group
Updated January 14, 2004, All rights Reserved
Looking for Cross-border help? You're in the right place
NAFTA Consultation on Visas, Taxation, Immigration, Cross =
Border, Canada, USA, Mexico
=20
David Ingram's US/Canada Services
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
Calls accepted from 10 AM to 10 PM 7 days a week
Res (604) 980-3578 Cell (604) 657-8451
Bus (604) 980-0321=20
[email protected]
www.centa.com www.david-ingram.com
Disclaimer: This question has been answered without detailed =
information or consultation and is to be regarded only as general =
comment. Nothing in this message is or should be construed as advice =
in any particular circumstances. No contract exists between the reader & =
the author and any and all non-contractual duties are expressly denied. =
All readers should obtain formal advice from a competent financial, or =
real estate planner or advisor & appropriately qualified legal =
practitioner, tax or immigration specialist in connection with personal =
or business affairs such as at www.centa.com. If you forward this =
message, this disclaimer must be included."
This from "ask an income tax and immigration and bankruptcy =
expert" from www.centa.com or www.jurock.com or www.featureweb.com. =
Canadian David Ingram deals daily with tax returns dealing with =
expatriate:
multi jurisdictional cross and trans border expatriate problems =
for the United States, Canada, Mexico, Great Britain, the United =
Kingdom, Kuwait, Dubai, Saudi Arabia, South Africa, Thailand, =
Indonesia, Egypt, Antarctica, Japan, China, New Zealand, France, =
Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, =
Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, =
Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, =
Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, =
US, UK, GB, American and Canadian and Mexican and any of the 43 states =
with state tax returns, etc.
income tax wizard wizzard guru advisor specialist consultant =
taxman =20
Alaska, Alabama, Arkansas, Arizona,=20
California, Colorado, Connecticut, =20
Delaware, District of Columbia, Florida,=20
Garland, Georgia, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Kentucky,=20
Louisiana, Maine, Maryland, =20
Massachusetts, Michigan, Minnesota, =20
Mississippi, Missouri, Montana, Nebraska, =20
Nevada, New Hampshire, New Jersey,=20
New Mexico,New York, North Carolina, =20
North Dakota, Ohio, Oklahoma, Oregon.=20
Paris, Rome, Sydney, Australia Hilton
Pennsylvania, Rhode Island, Rockwall,=20
South Carolina, South Dakota, Tennessee, =20
Texas, Utah, Vermont, Virginia,=20
West Virginia, Wisconsin, Wyoming,=20
British Columbia, Alberta, Saskatchewan,=20
Manitoba, Ontario, Quebec City,=20
New Brunswick, Prince Edward Island,=20
Nova Scotia, Newfoundland, Yukon and=20
Northwest and Nunavit Territories, =20
Mount Vernon, Eumenclaw, Coos Bay=20
and Dallas Houston Rockwall Garland=20
Texas Taxman and Tax Guru and wizzard=20
wizard - Your name has been added to our email list because of =
an enquiry we have received, we may not answer your question but=20
another similar question will be as we lump them.
You may find more answers at www.centa.com
David Ingram of the CEN-TA REALTY Group
US / Canada / Mexico tax and working Visa Specialists
US / Canada Real Estate Specialists
108-100 Park Royal South
West Vancouver, BC, CANADA, V7T 1A2
(604) 980-0321 - Fax 913-9123 [email protected]
www.centa.com www.david-ingram.com
=20
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