Introduction
The TN visa is an excellent option for Canadian and Mexican citizens seeking to work in one of the professional occupations listed under the North American Free Trade Agreement (NAFTA).
TN visas are relatively straightforward if you have a job offer from a U.S. company and possess a bachelor’s degree in one of the fields specified in the NAFTA regulations. However, TN visas become more complex if you are or will be an owner of a startup.
NAFTA specifically prohibits self-employment for TN visa holders. This restriction poses challenges for entrepreneurs who wish to start a business in the United States.
Common professions for TN visa holders include: Accountants, Architects, Computer Systems Analysts, Economists, Engineers, Graphic Designers, Lawyers, Management Consultants, Mathematicians, Medical Laboratory Technologists, Pharmacists, Physical Therapists, Scientific Technicians, Scientists, Social Workers, Teachers, Veterinarians.
A. How Entrepreneurs Can Meet TN Visa Requirements
The TN visa application process is typically straightforward and quick. However, there are specific challenges for startup founders and entrepreneurs.
1. Educational Requirements
The first challenge is ensuring the applicant meets the educational requirements:
- University Degree: Most TN visa occupations require a university degree. Unlike the H-1B visa, where work experience can sometimes be used to obtain a degree evaluation, TN visa regulations typically require a formal degree if the degree is required.
- Specific Occupations: Some professions might require a specific degree or a combination of a post-secondary diploma and experience (e.g., interior designer, hotel manager, or computer systems analyst).
2. Self-Employment Restrictions
The second challenge is addressing the prohibition on self-employment for TN visa holders:
- CBP Stance on Self-Employment: U.S. Customs and Border Protection (CBP) officers consistently interpret TN visa regulations to prohibit self-employment. This means if a TN visa applicant is identified as an entrepreneur or founder, their application may face heightened scrutiny and potential denial.
- Definition of Self-Employment: A professional is considered self-employed if they will be providing services to a corporation or entity where they are the sole or controlling shareholder or owner. This interpretation poses significant challenges for founders and business owners seeking a TN visa.
3. Practical Considerations For Entrepreneurs
Entrepreneurs can still meet TN visa requirements with careful planning and structuring:
- Ownership Structure: To avoid the appearance of self-employment, it may be beneficial for the entrepreneur to have a diversified ownership structure in their company, ensuring they are not the sole or controlling shareholder.
- Employment Offer: The applicant should secure a job offer from a U.S. company that clearly outlines their professional role and responsibilities, separate from ownership interests.
- Documentation: Providing thorough documentation to demonstrate the professional nature of their employment and compliance with TN visa regulations is crucial. This includes contracts, offer letters, and detailed job descriptions.
Understanding these challenges and addressing them proactively can help entrepreneurs navigate the TN visa application process successfully.
B. Avoiding Self-Employment Issues For TN Visa Applicants
For Canadian and Mexican entrepreneurs and individuals with ownership interests in U.S. entities, securing TN status can be challenging due to specific regulations that prohibit using TN status for self-employment. However, with careful planning, it is possible to meet TN visa requirements.
Key Points To Consider
1. Regulatory Restrictions:
- TN visas are generally not intended for individuals who wish to establish a new business or for those who own 50% or more of a U.S. entity and/or control its management.
- However, regulations do not explicitly prohibit foreign nationals who do not own a controlling share of the petitioning entity and can demonstrate a valid employer-employee relationship from obtaining TN status.
2. Ownership And Employment Structure:
- Ownership Interest: The Canadian or Mexican co-founder should not be the sole incorporator of the U.S. entity. It is recommended that they own less than 50% of the company and do not control its management.
- Employment Relationship: The co-founder should not be in the highest ranks of employees or hold an executive-level position. Instead, they should have a role where they report to another employee who has the authority to hire, fire, pay, supervise, or otherwise control them.
- Board of Directors: If the co-founder serves on the board of directors, they must not control the board. Ideally, the board should have multiple members, and the co-founder should only hold one of several seats.
3. Documentation and Demonstration of Employer-Employee Relationship:
- Employment Agreement: An executed employment agreement should specify that a majority of the board has the authority to fire the TN applicant.
- Board Structure: Establish a formal board of directors where the TN applicant holds only one of several seats, if any, reducing their control over the company.
- Intellectual Property Assignment Agreement: Having an intellectual property assignment agreement in place can further demonstrate the separation of ownership and employment responsibilities.
4.Strategies For Compliance:
- Employment Agreement: Ensure that the employment agreement clearly outlines the applicant’s role, responsibilities, and reporting structure.
- Minority Shareholder: The applicant must be a minority shareholder without direct or indirect control over the company’s management.
- Supervision And Control: Demonstrate that the applicant is supervised by another employee who has the authority to make employment decisions regarding the applicant.
By following these guidelines and ensuring a clear separation between ownership and employment roles, Canadian and Mexican entrepreneurs can potentially qualify for TN status. While USCIS and Customs and Border Protection (CBP) have different processes, a well-documented employer-employee relationship can help address concerns about self-employment. Adopting these strategies increases the likelihood of a successful TN visa application for entrepreneurs.
Conclusion
Embarking on the U.S. entrepreneurial journey as a foreign-born founder with a TN visa presents unique opportunities and challenges. Whether you’re navigating the educational and employment requirements or structuring your business to comply with TN visa regulations, we’re here to support you at every step.
We’re not just about facilitating startups; we’re about empowering dreams. Our dedicated team guides you from ideation to launch, ensuring your business aligns with TN visa criteria while addressing any self-employment concerns. We handle all your immigration needs, so you can focus on growing your venture in the U.S.
The success stories of foreign-born entrepreneurs inspire us, and we’re ready to help you create your own. Let’s turn your vision into reality. Take the first step. Schedule A FREE Assessment with our seasoned Immigration Lawyers today, and let’s structure your business for TN visa success!
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