Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
I’m an entrepreneur in Guatemala and would like to come to the United States to expand my tech company.
What is the best way to do that?
— Groundbreaking Guatemalan
What fantastic news that you’re looking to tackle the U.S. market. In a recent podcast (which is actually trending in your country the last several weeks!), I discussed my take on how to best establish a startup for immigration success. Whether a founder wants to make their way to the United States – or if they’re already here and want to start a venture of their own – we discussed the details. There are even options for companies that are newly formed with limited funding.
It’s important to know your options when setting up your company in the United States. This knowledge enables your company to successfully sponsor you, your founding team, and other prospective hires for visas and green cards if needed – prospective investors will also feel more comfortable investing in your company. Super important, right?! Before you get too deep into your plans, I recommend you consult both a corporate attorney and an immigration attorney to assist you in your efforts.
LLC versus Delaware C-corp
One of the first decisions you’ll need to make is how to structure your company in the U.S. A business or corporate attorney will be able to help you make this decision. In general, both corporations and LLCs are able to sponsor individuals for a U.S. visa or green card.
What I typically see in the startup ecosystem are that most VCs prefer investing in a C corporation created in Delaware (Delaware C-corp). That’s primarily because Delaware laws protect investors, and Delaware C-corps can distribute two or more classes of stock and stock options to employees, investors, and board members.
There is no U.S. residency or citizenship requirement to set up a Delaware C-corp, and it can be done within a day. For more info on this topic, listen to my chat about startup law with my good friend and trusted colleague Lindsey Mignano, founding partner of Smith Shapourian Mignano, a corporate law firm based in San Francisco that focuses on startups.
Also, talk to your business attorney about the ownership structure of these entities as well. For example, one possibility is that your Guatemalan company could own your U.S.-based company. However, most investors prefer to invest in a parent company based in the United States, so you could consider setting up your U.S. company to own your company in Guatemala. However, if you’ve already distributed shares in your company in Guatemala, this could be a cumbersome process that might best wait until you’re ready for a funding round. Then, you could do what’s called a Delaware flip — and you should definitely have your corporate attorney advise you on doing that.
Once you set up your company, you will need to decide where to establish roots. Many of the Latin founders I work with are drawn to Miami and tech hubs outside of Silicon Valley, and even California because the cost of living is more reasonable, and more networking events are happening in-person. Work with your corporate attorney to register your company in the state where you will base your business, apply for any business licenses, and make sure you comply with all state regulations.
B-1 business visitor visa
If you want to explore the U.S. market or come here to scout locations before you completely dive in, you could consider coming to the U.S. on a B-1 visitor visa for business, through which you can typically enter the U.S. for up to six months on a single trip.
Please make sure you know all things you can and cannot do under a B-1 visa — and be ready to disclose to the U.S. Customs and Border Protection officer at the airport what your business activities will be during your stay if asked.
If you’ve been employed at your company in Guatemala for at least one year out of the last three years, your company could sponsor you for an L-1A visa to establish an office in the United States. An L-1A visa offers a path to an EB-1C green card.
However, you should be aware that L-1 visas are being heavily scrutinized by USCIS adjudicators these days, so lots of small businesses and early-stage startups are receiving lengthy requests for evidence. Talk to your immigration attorney about whether another visa might be less risky or easier to pursue.
The annual H-1B registration and lottery period are fast approaching in March. The H-1B visa for specialty occupations is good for startup employees and it can be a great fit for specific individuals who don’t yet have the experience or achievements to qualify for an O-1A visa, which I’ll talk about more in a bit. An H-1B is typically issued in increments up to three years, and it also offers you the ability to renew that status beyond six years if you’ve reached certain stages of the green card process.
Sometimes founders can qualify for H-1Bs, but compliance is really important, as the company and beneficiary need to meet several legal requirements. For example, founders must be paid the prevailing wage for their industry and the company must establish a valid employer-employee relationship, especially if the beneficiary holds equity. Talk to a lawyer now if you want to put anybody in the H-1B lottery this year, as time is of the essence.
The O-1A requirements are more stringent than those for the H-1B in terms of the beneficiary’s past accomplishments. However, the O-1A has no minimum wage requirement or annual lottery process like the H-1B, so applying for an O-1A is more flexible in terms of timing and you can start any time of year. You’ll need an agent or employer to petition for you.
To qualify for an O-1A visa, you must have achieved national or international acclaim and be at the top of your field. You must meet three out of eight criteria, which include winning a nationally or internationally recognized award, such as venture funding, being featured in a major trade or other publication for work in the field, or speaking at conferences or judging the work of others at a hackathon or other competition. The O-1A is also a great stepping stone to an EB-1A or EB-2 NIW (National Interest Waiver) green card.
You’ve got this!
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The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer. You can contact Sophie directly at Alcorn Immigration Law.
Sophie’s podcast, Immigration Law for Tech Startups, is available on all major platforms. If you’d like to be a guest, she’s accepting applications!