Expanding Startup to the US - Feasibility & Considerations

Dear Sophie: Expanding a Startup from Iran to California

This is another installment of “Dear Sophie,” a column dedicated to addressing immigration questions specifically related to the technology sector.

Sophie Alcorn, a Silicon Valley immigration lawyer, emphasizes the importance of these inquiries. She states that these questions contribute significantly to disseminating knowledge, empowering individuals globally to overcome geographical limitations and achieve their aspirations.

Whether you are involved in people operations, are a company founder, or are actively seeking employment in Silicon Valley, Sophie welcomes your questions for future columns.

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Dear Sophie,

My co-founders and I established a software company in Iran several years ago, and it is currently experiencing success. We are now looking to broaden our operations to California.

With President Biden’s revocation of the travel restrictions targeting predominantly Muslim countries, is expansion now feasible? Does the ongoing pandemic continue to present obstacles? Are there any recommendations you can offer?

— Talented in Tehran

Dear Talented,

Expansion is indeed possible! However, the COVID-19 pandemic continues to introduce complexities to the immigration process. It’s important to remember that, in immigration law, solutions are often attainable with determination.

President Biden overturned the visa ban affecting numerous majority-Muslim nations, including Iran, on his first day in office in January. The U.S. Department of State reports that approximately 42,000 visa applications were previously denied as a result of this ban, which had been implemented in 2017.

Furthermore, the Biden administration allowed previous restrictions on the issuance of H-1B, L-1, and J-1 visas, as well as green cards, at U.S. embassies and consulates to expire.

This development means that international startup founders, like yourselves, and other international professionals residing outside the United States can now consider applying for these visas and green cards without necessarily needing to request exemptions.

I recently discussed these and other immigration-related changes, along with those proposed by the Biden administration, in a podcast episode. Listening to it will provide further insights.

Current Travel Restrictions and Application Processing

Currently, most travelers originating from Iran are prohibited from entering the U.S. due to the COVID-19 travel ban. Additionally, many U.S. embassies and consulates are not currently processing routine visa and green card applications.

Given the absence of a U.S. embassy or consulate in Iran since the 1979 hostage crisis, you and your co-founders should identify U.S. embassies or consulates that are actively processing routine applications – and are located in countries not subject to entry suspensions – and submit your applications there.

We are still awaiting comprehensive details from the State Department regarding potential compensation for individuals impacted by the previous travel ban.

I strongly advise consulting with a seasoned immigration attorney to develop a tailored immigration strategy for you, your co-founders, and your families, aligned with your individual and professional objectives.

Here are a few options to explore:

• Consider the various visa options available to startup founders.
• Evaluate the requirements for obtaining a green card based on investment or employment.
• Prepare thoroughly for the application process, gathering all necessary documentation.

Securing an L-1A Visa to Establish a U.S. Presence for Your Startup

Provided your startup has employed you for a minimum of one year, it may be possible to be sponsored for an L-1A visa as an intracompany executive. This visa permits the establishment of a new U.S. office for your company.

Successful approval hinges on demonstrating the new office’s capacity to financially support both you and your family within one year of the L-1A visa’s approval.

Initially granted for one year, the L-1A visa can be extended, allowing a total stay of up to seven years.

Furthermore, the L-1A visa allows for the inclusion of your spouse and children in your relocation to the U.S.

Your spouse is eligible to apply for a work permit; however, current processing times for these permits are experiencing significant delays.

Transitioning from L-1A to a Green Card

For those seeking a long-term stay in the U.S., the L-1A visa provides a pathway to the EB-1C green card, specifically designed for multinational managers and executives.

Similar to the L-1A visa, the EB-1C green card requires sponsorship from your U.S. startup.

A crucial requirement for EB-1C sponsorship is that the U.S. startup must have been operational in the U.S. for at least one year prior to filing the petition.

Strategic Timing for Green Card Application

It is generally advisable to initiate the green card application process shortly after arriving in the U.S. on an L-1A visa, as the process can be lengthy.

If the green card is not approved before the seventh year of the L-1A status, the visa holder will be required to either apply for an extension or depart the U.S. and pursue the green card application from their country of origin.

Utilizing a B-1 Visa for Initial U.S. Market Exploration Before Transitioning to a Work Visa

For entrepreneurs aiming to assess the U.S. market prior to full commitment, obtaining a B-1 visitor visa for business purposes is a viable strategy. This visa permits entry into the United States for activities such as attending industry conferences, scouting potential locations, and engaging with prospective investors.

Crucially, the B-1 visa does not authorize employment or remuneration within the U.S. However, it allows for contract negotiation and the incorporation of a startup entity. An initial stay under a B-1 visa is typically granted for six months, with the possibility of a single extension for an additional six months.

Transitioning to a Work Visa While on a B-1

Should an L-1A visa, or another appropriate work visa, be approved while you are legally present in the U.S. on a B-1, departure and re-entry are not required. This allows for a seamless continuation of business operations.

Further information regarding alternative immigration pathways for founders can be found in a previously published article on TechCrunch, offering a comprehensive overview of available options.

Obtaining Entry to the U.S. via International Entrepreneur Parole

A viable pathway for entrepreneurs and their co-founders – up to two in number – to gain entry into the United States involves applying for International Entrepreneur Parole (IEP). Eligibility hinges on demonstrating the potential of your startup to stimulate innovation, generate employment opportunities, and contribute to economic expansion within the U.S. through securing investment from American sources.

Following a period of ambiguity regarding the program's continuation under the prior administration, U.S. Citizenship and Immigration Services (USCIS) confirmed on May 11, 2021, its commitment to maintaining IEP. This program currently represents the closest equivalent to a dedicated startup visa available in the United States.

IEP Eligibility Requirements

Successful applicants under the IEP program will be granted temporary entry into the United States, initially for a period of up to 30 months. Meeting the following criteria is essential:

• Your startup must have been formally established as a U.S. entity within the preceding five years.
• You are required to possess at least a 10% ownership stake in the startup.
• A central role in the startup’s operations and active management is a necessity.
• Evidence of at least $250,000 in funding from qualified U.S. investors, or $100,000 in government awards or grants, must be presented.
• Should the financial threshold not be fully achieved, demonstrable potential for growth and job creation through alternative means is required.

Looking ahead, the introduction of a dedicated startup visa remains a priority. I recently contributed to drafting legislation for such a visa, at the request of the National Venture Capital Association, and it may soon be presented to the House of Representatives.

Further updates will be provided as they become available.

Sophie

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Please note that the information contained within “Dear Sophie” is intended for general informational purposes only and does not constitute legal counsel. For a comprehensive understanding of the limitations of “Dear Sophie,” please refer to our complete disclaimer. Direct inquiries can be addressed to Sophie at Alcorn Immigration Law.

Sophie’s podcast, Immigration Law for Tech Startups, is accessible on all leading podcast platforms. She is currently accepting applications from individuals interested in being featured as guests!