French Insider Podcast Ep. 30
The Whatnots of Immigrating and Business Travel in the U.S. with Greg Berk, Partner at Sheppard Mullin
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Listen to the podcast released March 18, 2024 here: https://www.sheppardmullin.com/multimedia-552
About Greg Berk
Greg Berk, a partner in Sheppard Mullin’s Labor and Employment Practice Group, is based in Orange County, California. He heads the firm’s immigration practice and is a Certified Specialist in Immigration and Nationality Law by the State Bar of California Board of Legal Specialization.
With more than 25 years of experience advising on various U.S. immigration issues, Greg is a trusted resource for global employers seeking guidance on recruiting and retaining foreign executives and top talent for their U.S. operations. He also works with investors on E-2, L-1, and EB-5 matters as well as I-9 and other immigration compliance matters. He is the author of "Immigration Checklists and Practice Pointers – A Desk Reference," a book published by the American Bar Association for General Counsel and HR managers.
About Inès Briand
Inès Briand is an associate in Sheppard Mullin’s Corporate Practice Group and French Desk Team in the firm’s Brussels office, where her practice primarily focuses on domestic and cross-border mergers and acquisition transactions (with special emphasis on operations involving French companies). She also has significant experience in general corporate matters and compliance for foreign companies settled in the United States.
As a member of the firm’s French Desk, Inès has advised companies and private equity funds in both the United States and Europe on mergers, acquisitions, commercial contracts and general corporate matters, including expansion of French companies in the United States.
Transcript:
Ines Briand:
Hi everyone, and welcome to this new episode of Sheppard Mullin French Insider podcast. I am Ines Briand, a corporate associate based out of the Brussels office, and today I am hosting Greg Berk, a partner in our Orange County office, a specialist in immigration and nationality law, leader of the firm's immigration practice, for a riveting episode on business travel, visa and immigration to the United States. Hi, Greg. Thanks for joining us today.
Greg Berk:
Thank you, Ines. It's great to be here.
Ines Briand:
Yes, especially right now. The immigration in the United States topic has always been a hot one, but especially now with the globalization and the H-1B lottery coming up soon.
So let's get started and talk about the most common visa that everyone knows about. Can you tell me a little bit about ESTA and the activities permissible on ESTA?
Greg Berk:
Sure. ESTA is great for coming for meetings, for training, conventions, trade shows and the like.
Ines Briand:
And how can someone stay in the US while being on an ESTA?
Greg Berk:
Well, that's a great question, Ines, because when you get off the plane at JFK or elsewhere US Customs and Border Protections, CBP, they will give you 90 days, an I-94 valid for 90 days to stay, but they really don't want you to stay for 90 days, because then they think you're working, so in a perfect world two to three weeks is their comfort zone. There's some exceptions, but, generally.
Ines Briand:
And so how often can someone return on an ESTA?
Greg Berk:
The CBP does not like to see back-to-back entries too often. That's where somebody is here for X amount, then go back for one or two or three days. In a perfect world somebody would come for two or three weeks, go back to France for maybe a month or two, and then come back for another business meeting. There's no perfect formula, but CBP just kind of watches to get a sense of what's going on. They don't want people working here without a work visa.
Ines Briand:
Fair enough. So let's briefly talk visas. Who needs a work visa, and what type of different visas are there?
Greg Berk:
So you need a work visa if you're going to be spending a lot of time here, if you're going to be doing day-to-day productive work. So if you come here for a meeting for three or four days, a trade show, it's fine. If you're going to be sitting at a desk for two months or 90 days, you're probably working, or what they would consider to be the work of a US worker, and then they're going to want you to get a work visa.
The work visa of choice for French nationals is the E-2, primarily because we get to skip the immigration agency here in the United States, the USCAS, which is US Citizenship and Immigration Services. They're tough. So any time we can bypass them we love it, and we go straight to the US Embassy.
So to get an E-2, we have to show that the US entity is at least 50% French owned. By that we mean all the way up to Topco. So if the US entity is 100% owned by the French company, but the French company is owned by a German company or a Japanese company, then it's no longer a French company for purposes of an E-2.
We have to trace nationality all the way up to Topco, so we need at least 50% French owned, we need a significant investment, which can vary, but usually at least $250,000, and then a business plan to show that over time the US company is going to hire US workers.
Ines Briand:
Interesting. Is the E-2 visa the one that we commonly refer to as the investor's visa, or is it like something different?
Greg Berk:
Yes. You're absolutely right. It is the non-immigrant investor visa, and you're allowed to bring over three types of workers on the E-2. You can bring over the investor owner if they're going to be actively developing the company. You can bring over managers, high level and mid-level. And then you can bring very highly specialized employees with extremely specialized skills.
Ines Briand:
Okay. That's interesting. So what other types of visas are there? I think there's one with special skills or something related to this?
Greg Berk:
Yeah. So there's also the L-1, which is intra-company transfer. For that, we can bring over managers or highly specialized workers. We do not have a nationality test. The US entity could be 30% French owned or 100%, and you can bring over people of all nationalities. With the E-2, you can only bring over French workers. With the L, you could bring over Germany, you could bring over Swiss, and British, and so on.
With the L, you have to show that you have a foreign parent company, let's say in France, and a US subsidiary, and that you're bringing people over as managers or specialized knowledge workers. So for the L, if we deal with USCAS they're very tough, so what large companies do is they get a blanket L, where the workers can go straight to the US Embassy, bypass the immigration agency here in the States. So you're very large multi-national companies that are doing at least 25 million in sales in the US use the blanket.
So even though the E-2 nice, it will limit you to French nationals, so the blanket L is really the best, but it won't work for a startup. You need 25 million in sales and you need at least four entities around the work.
Ines Briand:
So for our smaller clients that don't do $25 million in sales, this wouldn't apply?
Greg Berk:
Right.
Ines Briand:
Then what's the difference between the L-1B or the L-1 and the O-1 visa?
Greg Berk:
So the O-1 is for extraordinary ability. The L-1 would require that you show that the individual has worked, for example, for the French company for at least one year and so on, and sometimes you don't have that situation, or maybe you don't have 25 million in sales, and you don't have four entities around the world. So the O-1, if you have a very seasoned executive, they've got 20-30 years under their belt, and they're well-known at the industry, and they speak at conferences, or they write articles, and they have a high salary, we can get them to 0-1.
Ines Briand:
And so which one would be the fastest one to get amongst all of those?
Greg Berk:
Probably the E-2 on balance.
Ines Briand:
And then there's the H-1B visa. What can you tell us about it?
Greg Berk:
Sure. The H-1B is for professionals with a four-year college degree and the job offer is related to the degree. The problem is that Congress put this visa on a quota system, so there's a limited quota, and they put it into a lottery system. So, you know, you need somebody badly, they have special skills and they have a four year degree, you have to put them through a lottery. No other country does this, but that's how the H-1B works.
Ines Briand:
This is unfortunate. It made a lot of noise last year, with the new process and all of the duplicate applications. Let's hope that this year it's going to work better.
Greg Berk:
Absolutely.
Ines Briand:
So let's look at some examples. For example, what if one of our clients has an executive coming for let's say one week, and it just takes one week, but it comes for like two to three months in a row for this period of one week. What type of visa would that require.
Greg Berk:
Is that for meetings or for work?
Ines Briand:
Just to oversee the setting up of the office. Would ESTA work, or would this person need another visa?
Greg Berk:
ESTA is fine. Setting up a US company, meeting with lawyers, meeting with accountants, hiring a few Americans, those are permissible activities under ESTA, no problem at all.
Ines Briand:
And so you were just saying hiring a few Americans. Is that a requirement for a foreign entity in the US, to have a certain number of American employees before the entity can bring foreign employees into the structure?
Greg Berk:
There's no quota, but generally speaking the more Americans you can hire it looks better. Certainly if you're creating a company and you're an entrepreneur, the sooner you can hire an American so you can tell Customs and Border Protection, "I have an American manager doing the heavy lifting day-to-day. I'm just here for meetings," the better and safer.
Ines Briand:
So let's talk strategy now. When should the French entity start planning to send managers or officers or employees to the US? Would it be better to start at the initial development stage and think about this at that time, or send people once your entity is already settled and well-established? So like how long in advance should one plan?
Greg Berk:
Pre-planning is always good. Most businesses, particularly in startup mode, are not able to, for various reasons, plan too far ahead, too many moving parts. But it's good to kind of know who you may be wanting to send over and then have a discussion with counsel about it for sure.
Ines Briand:
And so what's the usual turnaround when you apply for a visa?
Greg Berk:
It's gotten faster. The US Embassies now are waiving interviews, honoring new rules, which cuts down on the wait time. Some US Consulates are busier than others. US Embassies now will accept third country nationals. So if you're French but the wait time in Paris is too long, you could go to the US Consulate in Frankfurt, no problem.
Average wait time depends. Right now Paris is really backed up, and the Olympics are coming too. Frankfurt is a good choice. Frankfurt might be a three or four week wait, Paris might be a six month wait.
Ines Briand:
Oh, yeah? There's a huge difference between the countries now? I didn't know that. That's interesting. That's great, that we can go to another country to apply for the visa. So you went through the Holy Grail. When does someone need a green card, and how to get one?
Greg Berk:
Great question. A green card is not everything that it's stacked up to be. Sometimes a green card is a little bit of a curse. I mean you need to spend six months a year here ideally. You're taxed on worldwide income. You're also taxed on worldwide income if you spend enough time here as a non-immigrant.
You really only need a green card if you're really planning on permanently living here. Otherwise it kind of gets in the way, and a lot of people end up abandoning and giving it up eventually, so a lot of times a non-immigrant visa works just fine.
Ines Briand:
What are the tax implications for the non-immigrant visas we discussed previously?
Greg Berk:
If they spend substantial time here and we would connect them with tax counsel, they will be taxed as if they're a permanent resident. They would be taxed on worldwide income. It's a good question, because part of every [inaudible 00:12:10] to the US should include a tax consultation.
Ines Briand:
Okay. Just to make sure that the people coming are aware of what's coming up, because filing taxes in the US can be complicated.
Greg Berk:
Right. And there could be tax treaties that allow for an offset for payment in one country.
Ines Briand:
Great to know. And so what about passports? Are there any special rules on passports to travel to the US?
Greg Berk:
There is hard stop rule on a passport. Most nationalities need a passport valid for six months beyond the intended stay. France is a member of what CBP calls the six month club, which means that if your passport is expiring within six months they will still admit you up until the passport expiration date.
Suffice to say it's always good to renew your passport so you have a minimum of a year. I recommend renewing passports when you have two years left, because it can sneak up on you and it can create problems.
Ines Briand:
Yes. And you don't want to have to cancel a business trip or a vacation because your passport is not valid anymore.
Greg Berk:
That's right. The airlines will not board you.
Ines Briand:
Yeah. So tell me more about ESTA. What are the dos and don'ts there?
Greg Berk:
So ESTA is a wonderful program. It's a waiver. It's a visa waive. One goes online and, you know, in a half hour completes a short questionnaire, and within 24 hours typically will have a yes answer. That allows the person to come here. The registration is valid for two years. Every two years one has to renew their ESTA, and then they don't need to get a visa.
For most people, 90 days is more than sufficient. If somebody is spending more than 90 days here, at least in the eyes of CBP, either they're working, or they might be a grandparent spending time with grandchildren, in which case they could easily get a B-1 or B-2 visa.
Ines Briand:
Okay. So suppose someone's ESTA is denied? Then what? Should they go to a B-1, B-2? Like are there any alternatives?
Greg Berk:
No. Then you have to go to the US Consulate and apply for the B-1/B-2. You know, sometimes somebody is rejected in ESTA, it's not because they have a criminal conviction or something. It could be their name is too similar to somebody else's and the system can't really differentiate, or something.
But certainly if somebody is overstayed in the past, or has a criminal conviction, or if they've traveled to certain countries, it could possibly disqualify them from ESTA. So usually they wouldn't have a problem of getting the B-1/B-2.
Ines Briand:
Okay. And so, think about disqualified countries, if, for example, the executive the company wishes to send has been to Cuba, or Iran, or North Korea, would that be an issue in applying for a working visa?
Greg Berk:
It would for ESTA. It will terminate their ESTA, and if they apply for ESTA they would be denied as well. We've heard of passengers who have come to the United States, the airline is boarding them, and somehow CBP has figured out in the nine hour flight that they're coming into the US has figured out that they were in Cuba last year, and they will turn them around.
Ines Briand:
Okay. And send them back home?
Greg Berk:
Yes, but usually they won't do a deportation. That's call expedited removal. Those are reserved for serious offenders and things. They usually let you do what's called withdraw your application for admission to the US, meaning we'll pretend you never were here. We'll let you leave on the next plane on own. There's no deportation. You can apply for a visa and everything will be fine.
Ines Briand:
And so if you've been to Cuba and then the company wants to apply for a L-1 or O-1 or E-2 visa, would that be a problem?
Greg Berk:
No, as long as it's disclosed.
Ines Briand:
Okay. Sometimes we hear stories of passengers being sent to secondary inspection for additional questioning. Any official advice there?
Greg Berk:
That can be triggered by all sorts of things. When the plane wheels up out of Charles de Gaulle the airline is electronically transferring their passenger manifest to CBP, and CBP has computer systems and algorithms and artificial intelligence looking at all the passengers' background, security databases are being checked, criminal databases, and also Facebook, LinkedIn and so on. They're checking.
There are a lot of reasons why they might send somebody to secondary. Sometimes it's just a mistake. Sometimes they might see something on Facebook that says this person is coming to New York to get married tomorrow. Well, they're not supposed to come on ESTA to get married, so they may have a few questions.
Or it may show in LinkedIn that the person was promoted to president of the company in New Jersey and CBP, they want to know what's going on there. Maybe there should be a work visa, unless the person is truly going to be living and working from France.
Ines Briand:
Yeah. It's true that CBP does check social media accounts.
Greg Berk:
They do, and if it's a slow day they're going to pull some people for some of these smaller things. On a busy day they really have to triage and deal with the more serious cases.
Ines Briand:
Fair enough. They don't want to have a huge line, like when you land in JFK you have to wait for four hours because they're checking all of the minor things with Instagram or TikTok throughout the whole day.
Greg Berk:
Exactly.
Ines Briand:
So if CBP is not happy with a passenger for any reason are there any other options besides a deportation? I think you talked about expedited removal. Is there something else?
Greg Berk:
Well, expedited removal is a deportation, but they could as to withdraw their application for admission, which is sort of a nice thing about well, we'll just pretend this didn't happen. You can go back and apply for a visa.
Ines Briand:
So what is your overarching advice in dealing with CBP?
Greg Berk:
Honesty is important, and being conservative I think is important. Yeah, that would be the overarching.
Ines Briand:
And with that client in the past that were being pulled into secondary questioning all the time, and then after three minute interviews they're told their fine, what's going on there?
Greg Berk:
Yeah. Usually it's a hit in the system. You know, there could be a thousand Charles Smiths for that date of birth, and they're mixing up... Their computer system is just not able to articulate the correct person. So the passenger can go online a few days later and fill out what's called a CBP redress and request CBP to review the file and correct the system so that the next time they come in there isn't this false hit in the computer system.
Ines Briand:
That's great that there's a program that allows someone to remediate to this, because it must be really annoying to be pulled out all the time. So if someone can't get global entry, what would be the other options?
Greg Berk:
Not to worry. The CBP is working very hard to bring on additional technology enhancements for expedited clearance with retina scans and facial recognition, so over time global entry is not going to be the only way to get a fast clearance.
Ines Briand:
So there's hope for shorter queues in immigration?
Greg Berk:
Uh-huh. For sure.
Ines Briand:
Thank you very much, Greg, for coming onto the podcast. Do you have any last words or any words of wisdom that you want to give to our listeners when going to the US?
Greg Berk:
I think planning is good, being conservative in terms of how much time you're going to spend here and what you're going to be doing. When you get off the airplane and you're here for a meeting, the correct answer is, "I'm here for a meeting." If you say, "I'm here for work," they will get nervous and think that there's something wrong. It's true that the meeting is work, but that's the wrong answer. You can't say work. You must stick to the script, which is meetings.
Ines Briand:
Okay. Well, thank you very much, Greg. This is very interesting. Can our listeners reach out to you if they have any question regarding immigration?
Greg Berk:
Absolutely. Thank you.
Ines Briand:
Thank you.
Greg Berk:
Safe travels.
Contact Information
Inès Briand
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