When investors perform their due diligence on a startup and its founders, one area they rarely delve into is one that could jeopardize their investment: Compliance with immigration law.
The Alcorn Immigration Law team can help you perform the due diligence on a startup’s compliance with immigration law and devise immigration strategies for startup founders. However, if you decide to go it alone, what should you be asking startup founders? Here’s a brief rundown of the most important questions to pose to startup founders and why.
1. Who is on the founding team?
And are any of them foreign nationals? Is there any other key personnel at the start-up who are foreign nationals?
You want to avoid a situation in which the startup founder, half the founding team, or key talent are facing deportation or otherwise being forced to leave the U.S. The startup should have immigration strategies and backup plans for key personnel.
2. From what country?
The country of origin determines a startup founder’s visa eligibility. More visa options exist for individuals from countries that have treaties with the U.S.
Moreover, foreign nationals whose home country has a trade treaty with the U.S. may be eligible for an E-2 visa. Although neither India nor China have a treaty with the U.S., countries including Iran, Japan, South Korea, Turkey, and most in Western Europe do. The U.S. Department of State maintains a list of treaty countries.
3. What visa do they currently have?
And when does it expire? These questions help not only determine the best immigration strategy, but also the likelihood that key talent must return to their home country.
The U.S. offers two types of visas based on the purpose or intent: immigrant and nonimmigrant. Immigrant visas are green cards to live and work permanently in the U.S. However, a limited number are available. A nonimmigrant visa is typically easier to obtain. However, it only allows its recipient to live and work temporarily in the U.S. under certain conditions. Nonimmigrant visas cannot be extended or have limited extensions.
Moreover, some visas prohibit their holders from performing hands-on work or getting paid by a U.S. source. Others prohibit their recipients from doing work for anyone other than the employer that sponsored the visa.
4. When did they arrive in the U.S.?
And under what visa? These questions also help determine the best immigration strategy and level of risk. A change of visa status determines not only what actions must be taken, but what visa eligibility.
A word of caution: A lapsed visa can lead to deportation, particularly under the Trump administration. You don’t want your key talent disappearing mid-game. Moreover, changing to another visa status can take many months, sometimes up to a year.
5. Do all employees have permission to live and work in the U.S.?
You as an investor should make sure everyone employed by the company is legal and has permission to live and work full time in the U.S. and receive an income.
Some visas require its recipient to have an employer sponsor. That means the visa holder can only work for that employer. The visa holder cannot create a startup and work there without getting a different visa.
Employers are required to check the work authorization of every worker they hire. Employers face fines or even criminal prosecution for hiring workers who do not have the appropriate authorization.
We Can Help
The Alcorn Immigration Law team takes the time to explain and educate you on immigration law, visa options, visa petitions and procedures. Contact us for a consultation.