july 26, 2010
Vol. 36, No. 30 • $10.00
ctlawtribune.com
Foreign Independent Contractors Need Proper Visas
Stringent, limiting requirements can make process burdensome
By BRENDA ECKERT
and LESLEY SALAFIA
T
he conundrum of engaging the services
of the foreign independent contractor
never ceases to frustrate U.S. companies.
e usual scenario is: U.S. Company needs
a consultant for a project. U.S. Company is
introduced to the “perfect” consultant for
its needs. However, the individual is for-
eign and in the U.S. as a visitor. Luckily, the
project can be completed through a series of
brief trips into the U.S.
Because the consultant isn’t an “employee”
and there is no obligation to complete a Form
I-9, the question of obtaining U.S. work autho-
rization never arises until about the consultant’s
third entry into the U.S. as a visitor within a
brief period of time. en a Customs and Bor-
der Protection ocer probes the foreign inde-
pendent contractor about the exact purpose of
his visit. e foreign national answers honestly
that he is fullling a consulting contract with
U.S. Company. U.S. Company ends up franti-
cally calling its lawyer to report that its key con-
tractor has been denied entry to the U.S. with
instructions to not enter again unless he has a
“work visa.” Until the mess is straightened out,
U.S. Company’s project is on hold.
ere is no magic solution to engag-
ing the services of the foreign independent
contractor. e few visa options have strin-
gent and oen limiting requirements which
either preclude engaging the foreign inde-
pendent contractor’s services or make the
engagement too burdensome. erefore, the
best way for U.S. companies to
engage foreign independent
contractors is to consider the
available visa options before
the engagement.
B-1 Business Visitor
It is important to under-
stand what a B-l business or
visa waiver visitor can and can-
not do in the U.S. A B-1 visitor
cannot engage in productive
employment in the U.S. ei-
ther as an employee or as an
independent contractor. An
employee of a foreign business
can enter on the B-1 to consult with a U.S. cli-
ent for work that will be performed abroad.
For example, a computer soware designer
can enter the U.S. to consult with a U.S. com-
pany about its requirements for a new system
and to examine its current hardware and net-
work if the principal activity — the designing
of new soware — will be performed abroad.
e self-employed foreign national, how-
ever, will nd entry dicult even for this
permissible B-1 activity. In the eyes of CBP,
the arrangement appears to be a circumven-
tion of work authorization laws by paying a
foreign individual in exchange for work, even
when payment is made to a foreign account.
Furthermore, in the independent contractor
situation, the actual “work” oen involves
consulting, research or analysis that primarily
takes place on U.S. soil. If the principal activity
happens in the U.S. and the benet is retained
by the U.S. company, it will constitute unau-
thorized employment by a business visitor.
Foreign business heads who wish to ex-
pand their business by entering into con-
tracts for services with U.S. companies oen
look to the L-1A Multinational Executive
and Manager visa. is might be a viable op-
tion. A crucial question is whether the for-
eign company will continue to operate while
its business head is in the U.S. performing
services. If the foreign oce will be empty
with its lights o, then the foreign business
head does not have the existing foreign com-
pany needed for the L-1A.
In addition, even the foreign contrac-
tor with an existing foreign company must
commit to establishing a new oce in the
U.S. with other employees to obtain an L-1A
visa. Such a commitment is rarely justiable
economically unless the foreign contractor
is condent of obtaining multiple contracts
with U.S. companies.
E Treaty-Traders
Some countries have entered into recip-
rocal treaties with the U.S. allowing their
This arTicle is reprinTed wiTh permission from The july 26, 2010 issue of The connecTicuT law Tribune. © copyrighT 2010. alm media properTies, llc all righTs reserved. duplicaTion wiThouT permission is prohibiTed. all righTs reserved.
Brenda Eckert is a partner in the Hartford office of Shipman & Goodwin where she
practices in the areas of Labor and Employment and Immigration Law. She can be
reached at [email protected]. Lesley Salafia is an associate in the Hartford office of
Shipman & Goodwin where she practices in the areas of Labor and Employment and Im-
migration Law. She can be reached at lsalafi[email protected].
Brenda eckert LesLey saLafia
2
EMPLOYMENT & IMMIGRATION LAW
JULY 26, 2010
foreign nationals to come into the U.S. to
conduct trade or oversee a U.S. investment,
including the trade or investment of a ser-
vice. To be eligible for an E visa, it must rst
be determined whether the U.S. has an ap-
plicable treaty with the foreign national’s
home country. For example, the U.S. has no
such treaties with India.
erefore, Indian foreign nationals can-
not obtain an E visa. Second, the trade or
investment must be “substantial,” as in sub-
stantial trade between the two countries or a
substantial investment risking the investor’s
own resources. In the case of the independent
contractor as a treaty-trader, it is oen hard to
show that contracting work results in an ex-
change of services between two countries.
As to an independent contractor treaty-
investor, the foreign national would have
to invest personal funds into an actual U.S.
business rather than engage in a brief con-
sulting relationship. e business investment
is further expected to create U.S. jobs, rather
than support just the foreign independent
contractor.
TN Visas
Canadian and Mexican independent con-
tractors have more options available through
the TN visa under the North American Free
Trade Agreement. Under NAFTA, Canadian
and Mexican professionals can engage in
self-employment under a prearranged ser-
vice contract with a U.S. company for a work
product generated in the U.S.
In these circumstances, the foreign na-
tional must be in a profession that qualies
for the TN, and the TN visa holder may not
establish a business in the U.S. in which he
is self-employed. NAFTA also expanded
the scope of allowable B-1 business visitor
activities for Canadian and Mexican nation-
als. However, even under NAFTA the self-
employed business visitor must be paid from
an overseas source, and the principal activity
must be predominantly performed abroad.
Unless the proposed independent con-
tractor meets the high “extraordinary ability”
O-visa standards or U.S. Company wishes to
pursue employment rather than a contrac-
tual relationship, these are the only visa op-
tions available to foreign contractors. None
lend themselves to the traditional “indepen-
dent contractor” relationship envisioned by
U.S. companies. It is best to consider these
limited options before entering into a con-
tractual relationship rather than receive the
unexpected news during a crucial project
that the key foreign contractor can no longer
gain entry into the U.S. n
