COVID-19, the global pandemic most commonly known as the Coronavirus, has slowed (and in some cases devastated) much of the world’s leading economies. Since the virus emerged in China at the end of 2019, in a matter of months it spread through Asia, Europe, North America, and Latin America. Leading economic powerhouses such as the European Union and the United States have taken drastic measures in an attempt to protect their respective healthcare systems. Unfortunately, the cost of slowing the virus has resulted in economic and financial devastation for many across the world.
The response in the United States varied from state to state, with some US states enforcing strict lockdown measures while others took a more relaxed approach. Ensuring preservation of the US economy was never far from the minds of officials in charge of lockdown orders. Nevertheless, the response of the federal government as it relates to US immigration went far beyond even that of the most strict US states.
In the middle of March 2020, the US Department of State effectively stopped issuing visas when major US Embassies and consular posts were closed around the globe. Large posts such as the US Embassies in London, Paris, Brussels, Rome, and the Consulate General in Amsterdam ceased providing routine visa services to foreign nationals living in those countries. Even US citizenship services were scaled back to only providing emergency appointments. The result was the de facto banning of any new immigrants and nonimmigrants to the United States.
Following closure of the world’s consular posts, the US government, in an effort to ‘protect’ the US economy, took further measures to ban certain individuals from obtaining immigrant visas, travelling to the US in general, and obtaining specific nonimmigrant visas.
While the temporary closure of US Embassies was extremely detrimental for foreign businesses looking to invest, expand, or continue business operations in the United States, the president’s latest Presidential Proclamation from 22 June 2020, suspended issuance of L1 visas through the end of 2020 – a move which will continue to negatively impact international business in the United States.
The L1 visa allows a foreign company a path to expand their business and establish an office in the United States, as well as to facilitate the transfer of foreign employees to the US branch. It’s an extremely beneficial visa category which allows foreign companies the opportunity to generate more revenue within the US market AND it inevitably has a positive impact on the local US economy where the new US business is established.
Each L1 visa Barella Global has had the pleasure of working with has hired local US citizen/Legal Permanent Resident employees. Additionally, these companies contract with other third party companies in the US which increase other US businesses’ profits. When a foreign company establishes an office in the US, in addition to employing US citizens, the company pays office rent, purchases local equipment and supplies to furnish the office, contracts with local telephone, internet, and service providers, among other expenses. The ‘trickle down’ benefit of a foreign company obtaining a foothold in the US market increases the US economy and benefits the local area. Barella Global’s Managing Attorney, Kyle Barella, sees no economic benefit to the US economy by suspending L1 visa issuance. In fact, he firmly believes that any foreign investment and expansion into the United States will make a positive impact on the US economy in the post COVID-19 sphere.
Take the following hypothetical: XYZ Ltd. is a UK limited company producing specialist manufacturing equipment for the solar power industry. Due to an increase in business from the United States, XYZ’s Director decides to open a branch office in Virginia via the L1-A visa category. She will spend one year in the States ensuring the office is properly staffed and able to operate autonomously and with little oversight from the UK.
As a result of the expansion, the economic benefit to the United States involves both direct and indirect value to US workers and businesses. Firstly, XYZ’s US enterprise will require sufficient office space. This will directly benefit the rental space for which they contract with, as well as provide indirect employment for the rental company’s employees and contracted staff. Additionally, XYZ will hire US citizen employees and contract with third party providers to ensure smooth operations.
The new US location will lower prices for the company’s US customer base, and indirect organizations will continue to benefit during the normal course of business (shipping/post, raw materials, etc.).
Now consider the ban on the issuance of L1-A visas pursuant to the Presidential Proclamation. Would a director of a foreign company still wish to pursue a US expansion if they will not even be allowed to work in the US at their own company? It’s unlikely. As a result, the US economy is missing out on economic recovery it truly needs – foreign investment. One can imagine the negative impact the ban will have on the US economy and America’s reputation as a safe place to do business. US workers – especially those impacted by COVID-19 also miss out on the opportunity for gainful employment.
Now that consular posts have started to resume visa processing, are there any alternatives for foreign businesses looking to expand to the United States?
Fortunately, the latest Presidential Proclamation does NOT impact the E2 Treaty Investor Visa. Nevertheless, this visa is only available to nationals of countries who presently maintain a treaty of commerce with the United States. Despite this limitation, we anticipate interest in the E2 investor visa will continue to grow in the coming months, as it is left as the most viable option for foreign expansion into the United States market.
The E2 Treaty Investor Visa allows an eligible foreign investor the opportunity to temporarily live and work in the United States by investing a substantial amount of money in a new start-up or the purchase of an existing business (or franchise). Most European and UK nationals are eligible to apply for the E2 visa. It is an extremely popular visa option and the number one visa Barella Global sources for its clients.
To date, Barella Global has a 100% success rate on E2 applications filed at the US Embassy and London and the various US consular posts within the EU. Additionally, we have an in-house partner company which can be retained to form the US entity in the US, as well as draft the E2 compliant business plan. Barella Global prides itself on its full-service E2 offerings and concierge style service for our investor clientele.
To learn more about E2 eligibility and requirements, contact one of our US immigration lawyers. Barella Global maintains offices in London, United Kingdom and Brussels, Belgium.
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