Turkish Founders Club

By: Cigdem A. Acar, Esq.

A ship in port is safe; but that is not what ships are built for.  Sail out to sea and do new things.

Rear Adm. Grace Hopper.

One of the most important challenges faced by the Turkish start-up entrepreneur will be to navigate the U.S. immigration laws as a business is founded from the ground up.  Thankfully, we can offer some roadmaps.  These guidelines are just that, guidelines.  Each case must be analyzed on its own terms, taking into consideration the interplay between its specific fact pattern and the changing legal environment.

One additional note: with the state of the U.S. and world economic conditions, there is notably greater scrutiny of all visa applications by U.S. authorities charged with their processing and enforcement.

E-2 TREATY INVESTOR VISAS

When an individual or a company sets up a new business in the U.S., and there is an investment effectuated in the enterprise, the E-2 Treaty Investor visa classification naturally comes to mind as a first option.

The E-2 Treaty Investor Visa can be simply defined as follows:

A Turkish national wishing to come to the U.S. to develop and direct the operations of an enterprise in which he or she has invested in, or is in the process of investing a substantial amount of capital may qualify for the Nonimmigrant E-2 Visa by virtue of the existence of a bilateral investment treaty between the U.S. and Turkey. Similarly, employees of qualifying Turkish corporate investors also qualify for the E-2 category. At least 50% of the ownership of the U.S. company must be held by Turkish nationals. To be eligible for an E-2 visa the applicant should be an owner, manager, executive, or hold an “essential” position within the company.

The decision of whether an investment qualifies as substantial is ultimately in the purview of U.S. consular officials.  The key factor is whether the investment has a reasonable likelihood of success, and that it is not speculative. It must be based on funds that are “at risk” i.e. irrevocably committed to the new business. The investment funds cannot be obtained through the proceeds of a loan. Only cash or borrowed funds based upon personal guarantee tied to assets of the investor are authorized.

Transfer of equipment and intellectual property (IP) can also count towards the investment and the availability of the required IP licenses will need to be documented. Copyright, trademark and multi-state corporate registration may also be required, based on the nature of the business in question.

Another key requirement is that the new enterprise be able to document the ability to create employment opportunities for U.S. workers. In other words, the enterprise may not be “marginal.”  A marginal enterprise is one that does not have the present or future capacity to create significant economic contributions besides providing a minimal income to the investor and his or her family. The projected future capacity of success must be realizable within 5 years of inception.

Another important concept is that of proportionality. The amount invested and at risk must be proportionately high relative to the cost of purchasing or creating the business. The lower the investment amount, the higher is the burden to document the future viability of the enterprise.

OPTIONAL PRACTICAL TRAINING – STEM EXTENSIONS

Generally speaking, F-1 students, upon completion of their program of studies are entitled for post-completion Optional Practical Training employment authorization.  This training can be paid or unpaid employment and involves experiential learning directly related to the student’s major area of study. The Designated School Officials must be timely notified of all aspects of and changes within the student training program status.

Self-employed business owners qualify for Optional Practical Training (OPT) status. Students on OPT may start a business and be self-employed.  The OPT holder must be able to document that he or she is actively engaged in a business related to his or her degree program. Further, there must be a legally established and registered business entity to accommodate the employment.

Unpaid employment, under the circumstances, is authorized, and OPT holders may work as volunteers or unpaid interns, provided local labor and employment laws are complied with.  OPT holders must also be able to provide evidence, acquired from the student’s employer, verifying that he or she is working at least 20 hours per week during the period of employment.

Students may be authorized up to 12 months of OPT after completion of each higher level of education.

Post completion OPT is available after completion of the Bachelor, Master, and doctoral programs, after completion of all requirements – except thesis, dissertation, or equivalent, for the degree.  The start date for post completion OPT may not be more than 60  days after completion of the program of studies, and unless a STEM extension is granted – must be completed within 14 months of completion of the academic program.

A student does not need a job offer to apply for the OPT but must apply no sooner than 90 days before completion of studies and no later than 60 days after completion of program of studies.

Under the new rules, students granted post-completion OPT are allowed up to 90 days of unemployment and students granted a STEM extension are allowed a total of 120 days of unemployment. According to the U.S. Immigration and Customs Enforcement’s Student and Exchange Visitor Program (SEVP), each day, including weekends, counts towards the unemployment limit, with certain exceptions.

OPT STEM EXTENSION

F-1 students who earn a degree in science, technology, engineering, or mathematics (STEM) may be eligible for an extension of post-completion OPT for up to 17 months, for a total of 29 months of OPT. The STEM extension is a one-time benefit and may be granted only if a student is currently engaged in an OPT based on a STEM Degree.

To be eligible for a STEM extension, a student must have an employer who is enrolled in the E-Verify Program.

Students on a STEM extension can also start a business and be self-employed. In this case, the employing business must also be registered with E-Verify.

The E-Verify Program is run by the Department of Homeland Security and is designed to confirm authenticity of social security numbers and immigration documents presented to complete Form I-9.

H-1B VISAS FOR INDIVIDUALS EMPLOYED IN SPECIALTY OCCUPATIONS

This visa category is predicated upon an employment offer by a U.S. employer requiring the services of a professional possessing university level or higher academic training, or its equivalent, in a specific field of specialization, as required by the offered position.

The H-1B visa process also requires certification of a Labor Condition Application by the U.S. Department of Labor.

A recent policy memorandum issued by the U.S. immigration authorities has brought stringent limitations on H-1B visa eligibility in various employment scenarios involving outsourcing employees to third party worksites. Also, it has brought limitations to H-1B visa eligibility, when the beneficiary visa applicant has ownership interest in the U.S. petitioning employer.

O-1 VISAS FOR EXTRAORDINARY ABILITY INDIVIDUALS

The O-1 visa is available for individuals of extraordinary ability in the sciences, arts, education, business or athletics, who have demonstrated sustained national or international acclaim and who seek to enter the U.S. to continue temporary work in the area of extraordinary ability.

O-1 petitioners must also obtain a consultation from a peer group or labor/management organization with expertise in the specific field involved.

To qualify, the applicant must be able to document a “level of expertise indicating that the person has risen to the very top of the field of endeavor.”

Extraordinary ability in the field may be demonstrated through nomination for or receipt of a significant national or international award or prizes in the particular field, such as an Academy Award, an Emmy, a Grammy or a Director’s Guild Award.

Alternatively, extraordinary ability may be evidenced by at least three of the following forms of documentation:

1. Receipt of nationally or internationally recognized prizes/awards for excellence in the field;
   1. Membership in associations in the field that require outstanding achievement of their members, as judged by recognized national or international experts;
   2. Published material in professional or major trade publications or major media about the alien (newspapers, trade journals, magazines, or other publications);
   3. Participation on a panel or as a judge of the work of others in the same or an allied field of specialization;
   4. Original scientific, scholarly, or business-related contributions of major significance;
      1. Authorship of scholarly articles in professional journals or other major media (newspapers, trade journals, magazines, or other publications);
      2. Current or previous employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation; or,
      3. Past or proffered high salary or other remuneration for services, evidenced by contracts or other reliable evidence.

CONCLUSION

The overall business and legal environment U.S. markets present to Turkish entrepreneurs generally provide comparatively more opportunities than challenges, except perhaps in the area of U.S. immigration law, which consistently baffles all nationalities, without discrimination.

Of course, Turkish businessmen are well practiced in overcoming the most daunting challenges.  My humble advice to them is to seek guidance before they embark on their journey.