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Purchasing a franchise is rightly considered an effective means of making not only a promising investment, but also a way to acquire temporary or even permanent residency in the United States. There are various visas that are suitable for the franchise scenario. An E-2 visaĀ is the most common and accessible visa when acquiring a franchise. However, only a limited number of countries have the requisiteĀ E-2Ā treaty with the U.S. The other most common option is anĀ L-1 visa.
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AnĀ L-1 can be an effective vehicle for acquiring temporary residency while purchasing a franchise. However, there are quite a few more requirements that need to be satisfied in the L-1 scenario. Some of these include the fact that there might be an affiliated company outside the U.S. where the investor worked as an executive for at least a year prior to the application. That the investor can only work as an executive or manager at a U.S. company. And that more employees need to be employed at the U.S. business than in an E-2 scenario.
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One clear advantage, however, of using an L-1 is the ability to convert from an L-1 to a Green Card through an EB-1c petition. With the E-2, there really is no direct means of converting to a Green Card. The only possible route of converting an E-2 to a Green Card is through anĀ EB-5. However, this can be a challenging route since it requires hiring at least 10 employees, investing at leastĀ $500,000. Depending on the location of the business (which amount is quite likely to increase this year to approximatelyĀ $800,000). And proving the source of funds of the investorās money.
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However, the L-1 route with later conversion to an EB-1c is not without challenges too. First, given the visaās requirements, the business being acquired or opened for an L-1 generally needs to be larger than that of an E-2 both in terms of investment amount and employees being hired. Given recent adjudication trends, our view is that at the bare minimum, 5-6 employees need to be hired by the end of the first year of the L-1 visa (assuming the firm was just opened). By comparison, an E-2 business does not necessarily need that many employees. In addition, USCIS wants to see a more complicated management structure in an L-1 business.
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This means that there generally needs to be at least 2 managers (included in that number of 5-6 employees mentioned above) under the management of the L-1 applicant by the end of the first year of operations. Again, with an E-2 there is no need such as this for mid-level managers.
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Where things get a bit trickier is when making the transition from the L-1 visa to the Green Card through an EB-1c petition. First, the requirements to extend an L-1 are not equivalent to those to successfully file for an EB-1c. There are similarities, but generally, the requirements are nonetheless higher to receive a Green Card. In short, the general requirements to receive an EB-1c are the following:
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Other features that improve the chances of approval of a Green Card are:
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In any event, the likelihood of success truly depends on the circumstances of each individual case. Since there are often mitigating factors that could affect the outcome. It is best to consult with an experienced immigration attorney to determine what approach would be best for you and most likely lead to success.
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Charles Raether is the Managing Partner and founder of AmLaw Group (www.amlawglobal.com), a boutique immigration law firm in the Miami metro area, dedicated to assisting foreign businesses and entrepreneurs with their business, investment, and immigration matters in the U.S.Ā AmLaw advises on EB-5, L-1, E-2, EB-1, and other investor and business-related visas for clients seeking to acquire temporary or permanent residency in the United States.