The New Immigration LandscapeStrategic Immigration Planning for Cross-Border Businesses,

Investors and Travelers

Introductory Concepts in U.S. Immigration

• Nonimmigrant v. Immigrant.• Visa v. Status.• Adjudicating/Controlling Agencies.

– Department of State (“DOS”).• Embassies/Consulates.

– Department of Homeland Security (“DHS”).• U.S. Citizenship and Immigration Services (“USCIS”).• U.S. Customs and Border Protection (“CBP”).• U.S. Immigration and Customs Enforcement (“ICE”).

– Department of Justice (“DOJ”).• Board of Immigration Appeals (“BIA”).

– Department of Labor (“DOL”).• Employment and Training Administration (“ETA”).

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories

• A-1 - Foreign government officials: ambassador, public minister, career diplomat or consular officer, or immediatefamily.

• A-2 - Foreign government officials: other foreign government official or employee, or immediate family.• A-3 - Foreign government officials: attendant, servant, or personal employee of A-1 or A-2, or immediate family.• B-1 - Business travelers: meetings, conferences, trade shows, contract negotiations.

‒ In Limited cases: investigating investment opportunities, after sales services North American Free TradeAgreement (“NAFTA”), B-1 in lieu of H-1B, training programs, professional athletes.

• B-2 – Tourists/travelers: temporary visitor for pleasure or medical treatment.• C-1 - Alien in transit.• C-1/D - Combined transit and crewman visa.• C-2 - Alien in transit to United Nations Headquarters District under Sec. 11.(3), (4), or (5) of the Headquarters

Agreement.• C-3 - Foreign government official, immediate family, attendant, servant or personal employee, in transit.• D-1 - Crewmember departing on same vessel of arrival.• D-2 - Crewmember departing by means other than vessel of arrival.

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories – Cont’d

• E-1 - Treaty trader, spouse, and children under the age of 21.• E-2 - Treaty investor, spouse, and children under the age of 21.• E-3 - Specialty occupation - Australian citizen primary, as well as spouse, and children under the age of 21.• F-1/F-2 - Academic student/spouse and children under the age of 21.• F-1/F-2 - Alien in transit.• G-1 - Principal resident representative of recognized foreign government to international organization, staff, or

immediate family.• G-2 - Other representative of nonrecognized foreign government to international organization or immediate family.• G-3 - Representative of recognized foreign government to international organization or immediate family.• G-4 - International organization officer or employee, or immediate family.• G-5 - Attendant, servant, or personal employee of G-1 through G-4 or immediate family.• H-1B1 - Specialty occupation - Singapore or Chile citizen primary, as well as spouse, and children under the age of

21.• H-1B - Specialty occupation - primary, as well as spouse, and children under the age of 21.

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories – Cont’d

• H-2A - Aliens who come to the U.S. to perform agricultural labor on temporary basis.• H-2B - Aliens who come to the U.S. to perform nonagricultural labor on temporary basis.• H-3 - Aliens who come to the U.S. to participate in training program.• H-4 - Spouse and children under the age of 21 of H primary.• I - Representative of foreign information media, spouses, and child.• J-1 - Work and study-based exchange visitor, including interns, trainees, au pairs, alien physicians, camp

counselors.• J-2 - Spouse and children under the age of 21 of J-1.• K-1 - Fiancé of a U.S. citizen.• K-2 - Child (under 21) of fiancé of a U.S. citizen.• K-3 - Spouse of a U.S. citizen.• K-4 - Child (under 21) of spouse of a U.S. citizen.• L-1A - Intracompany transferee (executive or managerial).• L-1B - Intracompany transferee (specialized knowledge).• L-2 - Spouse and children under the age of 21 of L-1A or L-1B.

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories – Cont’d

• M-1 - Vocational student or other nonacademic student.• M-2 - Spouse and children under the age of 21 of M-1.• N-8 – Parent of an alien classified as SK-3 special immigrant (NATO).• N-9 - Children under the age of 21 of N-8 or of an SK-1, SK-2, or SK-4 special immigrant.• NATO-1 - Principal permanent representative of member state to North Atlantic Treaty Organization (“NATO”)

(including any of its subsidiary bodies) resident in the U.S. and resident members of official staff; secretary general,assistant secretary general, and executive secretary of NATO; Other permanent NATO officials of similar rank, orimmediate family.

• NATO-2 - Other representative of member state to NATO (including any of subsidiary bodies) includingrepresentatives, its advisers and technical experts of delegations, members of immediate Art. 3, 4 UST 1796 family;dependents of member of a force entering in accordance with the provisions Status-of-Forces Agreement or inaccordance with the provisions of the protocol on the status of International Military Headquarters; members of sucha force if issued visas.

• NATO-3 - Official clerical staff accompanying representative of member state to NATO (including any of itssubsidiary bodies) or immediate family.

• NATO-4 - Official of NATO (other than those classifiable as NATO- 1) or immediate family.• NATO-5 - Expert, other than NATO officials classifiable under the NATO-4, employed in missions on behalf of

NATO, and their dependents.

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories – Cont’d

• NATO-6 - Member of a civilian component accompanying a force entering in accordance with the provisions of theNATO Status-of-Forces agreement; member of a civilian component attached to or employed by an alliedheadquarters under the protocol on the status of International Military Headquarters set up pursuant to the NorthAtlantic Treaty; and their dependents.

• NATO-7 - Attendant, servant, or personal employee of NATO-1, NATO-2, NATO-3, NATO-4, NATO-5, and NATO-6classes, or immediate family.

• O-1A - Individuals with extraordinary ability in the sciences, education, business, or athletics.• O-1B - Individuals with extraordinary ability in the arts, including motion picture and television industries.• O-2 - Individuals who will accompany an O-1 artist or athlete to assist in a specific event or performance.• O-3 - Spouse and children under the age of 21 of O-1 or O-2.• P-1 - Athletes, entertainment groups, and support personnel.• P-2 - Reciprocal exchange program for artists.• P-3 - Artistic exchange (culturally unique program).• P-4 - Spouse and children under the age of 21 of P-1, P-2, or P-3.• Q-1 - Participant in an international cultural exchange program.• Q-2 - Irish peace process cultural and training program (“Walsh Visas”).• Q-3 - Spouse and Children under the age of 21 of Q-1 or Q-2.

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories – Cont’d

• R-1 - Aliens in religious occupation.• R-2 - Spouse and children under the age of 21 of R-1.• S-5 - Certain aliens supplying critical information relating to a criminal organization or enterprise.• S-6 - Certain aliens supplying critical information relating to terrorism.• S-7 - Spouse and children under the age of 21 of S-5 or S-6.• T-1 - Victim of a severe form of trafficking in persons.• T-2 - Spouse of a T-1.• T-3 - Child of a T-1.• T-4 - Parent of T-1 (if T-1 is under 21).• TN - Professional workers under NAFTA.• TD - Spouse and Children under the age of 21 of TN.• U-1 - Victim of certain criminal activity.• U-2 - Spouse of a U-1.• U-3 - Child of U-1.• U-4 - Parent of a U-1 (if U-1 is under 21).

U.S. Immigration’s Alphabet Soup of Nonimmigrant Categories – Cont’d

• V-1 - Spouse of an Lawful Permanent Resident (“LPR”) who is the principal beneficiary of a family-based petition(Form I-130) which was filed prior to December 21, 2000, and has been pending for at least three years.

• V-2 - Child of an LPR who is the principal beneficiary of a family-based visa petition (Form I-130) that was filed priorto December 21, 2000, and has been pending for at least three years.

• V-3 - The derivative children of a V-1 or V-2.• TPS – Temporary protected status (El Salvador, Haiti, Honduras, Nepal, Nicaragua, Somalia, South Sudan, Sudan,

Syria, and Yemen.

Applicable U.S. Federal Tax Rules• Two key distinctions for tax.

‒ “Lawful permanent resident” or not.‒ Type of U.S. income.

• Note that state law does not necessarily follow federal, including treaties.‒ Taxability generally a question of “nexus” with a state under its laws (as limited by the U.S. Constitution).‒ Most states have more than one type of tax that applies to businesses and their employees: income or gross receipts, sales,

unemployment, etc.

• Lawful permanent resident = “green card”.‒ Like U.S. citizens, taxed on worldwide income and subject to information reporting until formally terminate green card or card is

revoked/determined to have been abandoned through administrative or judicial hearing (I.R.C. § 7701(b)(6)).‒ Merely letting a green card expire, moving to another country, or handing it to a border guard not sufficient to terminate for tax.‒ “Long term” green card holders subject to U.S. exit tax upon termination (“8 of 15 year” test).‒ Green card does not necessarily mean resident for estate and gift tax purposes (domicile test).

• Individuals without green cards (including those on immigrant visas not yet “converted” to green cards) are taxedbased on day count and type of U.S. income.

• Special rules for first and last years of U.S. tax residency – “dual status” income tax return required for both greencard holders and non-green card holders.

Applicable U.S. Federal Tax Rules – Individuals Without Green Cards – Cont’d

“Substantial presence test” (I.R.C. § 7701(b)(3)): 183 or more U.S. days based on 3 year weighted test

• Example: U.S. days 2018 + 1/3 U.S. days 2017 + 1/6 U.S. days 2016 = 2018 substantial presence day count.‒ Substantial presence day count exceeding 183 days = U.S. resident taxable on worldwide income and subject to all U.S.

information reporting requirements‒ Days = total days (not just days spent working, etc.; exception: days transiting through a U.S. airport between two other

countries)‒ Can override substantial presence test with “closer connection exception” (Treas. Reg. § 301.7701(b)-2).

o File IRS Form 8840, either by itself (if no required U.S. tax return) or with Form 1040NR (U.S. tax return of nonresident noncitizen).o Not available if present in the United States for 183+ days in a single calendar year.

‒ If closer connection exception not available, may use treaty residency provisions to “break back” to other country.o File IRS Form 8833 (Treaty-Based Return Position Disclosure) with Form 1040NR.o Must still file all U.S. information reporting forms.

• Individuals with work authorization generally eligible for U.S. Social Security Numbers (SSNs).

• Nonresident noncitizens and residents ineligible for U.S. SSNs obtain Individual Taxpayer Identification Numbers(ITINs) to file tax returns.

Applicable U.S. Federal Tax Rules – Individuals Without Green Cards – Cont’d

Taxation of nonresident noncitizens

• Income effectively connected with a U.S. trade or business (“active”).‒ Taxed the same as income earned by U.S. residents, tax return (1040NR) required.‒ Includes income for services performed in the United States.‒ “U.S. trade or business” defined by case law rather than statute or regulation, but threshold quite low.‒ Possible to override with treaty (for example, make certain types of income taxable only in Canada) but

generally need to file U.S. treaty-based return (1040NR + 8833) to do so.

• Fixed, determinable, annual and periodical (“FDAP”) income (“passive”).‒ 30% U.S. withholding applies by default (I.R.C. § 871); no U.S. tax return required.‒ Possible to override with treaty; may need to file U.S. treaty-based return.

U.S. Family-based Immigrant Visa Categories

• F1 - Unmarried sons and daughters of U.S. citizens.• F2A - Spouses and children of permanent residents.• F2B - Unmarried sons and daughters (21 years of age or older) of permanent residents.• F3 - Married sons and daughters of U.S. citizens.• F4 - Brothers and sisters of adult U.S. citizens.

Family-Sponsored

All ChargeabilityAreas ExceptThose Listed

CHINA-mainlandborn INDIA MEXICO PHILIPPINES

F1 08JAN12 08JAN12 08JAN12 08AUG97 15MAY07

F2A 15MAY17 15MAY17 15MAY17 01MAY17 15MAY17F2B 01FEB13 01FEB13 01FEB13 15FEB98 01OCT07F3 08NOV06 08NOV06 08NOV06 15FEB96 08OCT96F4 15FEB06 15FEB06 01AUG04 08FEB98 01MAR97

U.S. Employment-based Immigrant Visa Categories

• EB-1 - Extraordinary ability, outstanding professors and researchers, and multinational executives/managers.• EB-2 - Members of the professions holding advanced degrees or persons of exceptional ability.• EB-3 - Skilled workers, professionals, and other workers.• EB-4 - Certain special immigrants.• EB-5 – Employment creation.

Employment-based

All ChargeabilityAreas ExceptThose Listed

CHINA-mainlandborn

EL SALVADORGUATEMALAHONDURAS

INDIA MEXICO PHILIPPINES VIETNAM

1st 01MAR18 22FEB17 01MAR18 22FEB17 01MAR18 01MAR18 01MAR182nd C 15MAY16 C 16APR09 C C C3rd C 22AUG15 C 01JUL09 C 01JUN18 COther Workers C 01SEP07 C 01JUL09 C 01JUN18 C4th C C 08MAR16 C 01AUG18 C CCertain Religious Workers C C 08MAR16 C 01AUG18 C C

5th Non-Regional Center(C5 and T5)

C 22SEP14 C C C C 22SEP16

5th Regional Center(I5 and R5) C 22SEP14 C C C C 22SEP16

Trump Administration Immigration Priorities

• Border wall with Mexico.• Deportation of Deferred Action for Childhood Arrivals (“DACA”) kids.• Restrict travel and work visas for travelers from 8 countries.

‒ Chad, Iran, Libya, North Korea, Somalia, Syria, Venezuela, and Yemen.• Elimination of diversity lottery.• Restrict asylum seekers and refugees (process and criteria).• Review of H-1B visa program.• Curb legal immigration and adoption of merit-based system.

‒ Would prioritize those who were financially self-sufficient, educated, highly skilled, and spokeEnglish.

• Higher scrutiny level applied by USCIS, CBP, DOS, and DOL.• Tightening of scrutiny level, procedures, and policies applied to Canadian travelers.