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Global Immigration Law Services
 Immigration Law Update
 
November 2009
In This Issue
H-1B Cap Count and Diversity Lottery
Immigration Through Investment - Focus on Renewable Energy
November Tax Tip
Global Update - India
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This month we focus on immigration options available via investment, especially since the U.S. has now extended its investor green card program until 2012.  Foreign investors who are interested in this program should however carefully read this month's Tax Tip, which provides information about the expatriation (exit) tax rules, when someone gives up their U.S. citizenship or lawful permanent resident (green card) status.  Next month we will highlight global options for obtaining citizenship through investment.  Last, but not least, there were important changes on the Global immigration front, in India, which we explain below. 
 
H-1B Cap Count and Diversity (Green Card) Lottery
 
H-1B Cap Count
The United States Citizenship and Immigration Service (USCIS) reports that as of November 13, 2009, it had received approximately 55,600 petitions for H-1B visas towards the cap of 65,000 (cap-subject petitions).  This is an increase of almost 9,000 in less than a month.  So the pace is picking up with H-1B filings.  For the 20,000 H-1Bs that are set aside for graduates with Master's or higher degrees from U.S. universities (advanced degree petitions), USCIS has already received 20,000 petitions.  Employers should make sure to send in their applications as soon as possible as the cap may be reached at any time.  USCIS will continue to accept both cap-subject petitions and advanced degree petitions until a sufficient number of H-1B petitions have been received to reach the statutory limits.
 
Diversity Lottery
The annual Diversity Lottery will end on November 30, 2009.  Applicants must apply on-line through the Department of State website, www.dvlottery.state.org. 55,000 visas are usually made available each fiscal year to persons from countries with low rates of immigration to the United States.  If you would like to participate in the lottery, you should apply as soon as possible, as documentation such as photos must be uploaded with the application.  For more information, you can check our website or please contact us.
Immigration Through Investment - Focus on Renewable Energy
 
The EB-5 Regional Center Program, a pilot program for obtaining a green card via investment in a government approved and designated Regional Center, was extended until September 30, 2012 as a result of President Obama signing a Department of Homeland Security Appropriations Bill.
 
Because of President Obama's focus on developing clean energy projects, the U.S. is quickly becoming a top market for such renewable energy projects.  The wind power industry is currently the fastest growing area; however, many companies worldwide that focus on other energy areas such as biomass, or solar power also have plans to build facilities in the U.S. or have already started building plants.  Having an immigration plan prepared and ready for the potential transfer of key personnel to set up or work at these facilities will be vital to a smooth transfer process.  Furthermore, with the U.S. government awarding millions in cash grants to companies developing renewable energy projects, investing in these projects will be a very attractive prospect for foreign investors.  Therefore, foreign investors can use this opportunity to secure visas or green cards to reside for longer periods or even permanently in the U.S. to better direct and manage their renewable energy project investments.

Non-immigrant Investor Visa (E-1/E-2 Visa)
Non-immigrant investor visas may be available to foreign investors who are nationals of a country with which the United States maintains a treaty of commerce and navigation.  Currently, the U.S. maintains treaties with over 75 countries.  Nationals of these countries who are coming to the United States to carry on substantial trade (including in services or technology) between the U.S. and the treaty country, or to develop and direct the operations of an enterprise in which they have invested or are in the process of investing a substantial amount of capital, may be eligible for an E-1 Treaty Trader or E-2 Treaty Investor visa, respectively.

Investors apply for these E visas at a U.S. consulate or embassy abroad.  The visas are granted for an initial period of five years or less, depending on the nationality of the investor; however, the visa may be indefinitely renewed as long as the foreign investor/trader continues to remain involved and maintain their status with the enterprise in the U.S.  Spouses and unmarried children under 21 years of age, regardless of nationality, may receive E visas to accompany the treaty trader or investor spouse. The spouse of an E visa holder also may apply for eventual employment authorization.

Immigrant Investor Visa (EB-5 Green Card)
10,000 immigrant visas are made available every year to qualified individuals seeking permanent resident status on the basis of their engagement in a new commercial enterprise (investment).  To qualify under this category, the individual must have invested at least $1 million (or at least $500,000 if investing in a rural or high unemployment area) and through that investment create or save at least 10 jobs for U.S. workers.  
 
3,000 of these visas are set aside for those who apply through a "Regional Center."  A Regional Center is a private enterprise, corporation, or a regional governmental agency with a targeted investment program within a defined geographic region.  The Regional Center Investment Program does not require that the foreign investor's enterprise itself directly employ 10 U.S. workers.  Instead, it is enough if 10 or more jobs will be created directly or indirectly as a result of the investment in the Regional Center. The Regional Center Investment Program directs and manages the foreigner's investment in the designated business and geographic focus of their Regional Center.  As a result, the foreign investor may reside anywhere in the U.S., regardless of in which Regional Center he/she invests.  Regional Center programs are located across the U.S., including a new program in New York City, and programs in California, Florida, Vermont and Hawaii.

EB-5 applicants first receive a conditional green card valid for two years. At the end of that time they must file another application showing that their money was "at risk" during the two-year period and that the jobs have been created. Once that has been approved, they become regular green card holders, along with their spouse and unmarried children. 
 
The E-1/E-2 non-immigrant visas or the EB-5 immigrant investor visa are two very concrete ways for foreign investors to obtain authorization to direct, manage or invest in renewable energy projects in the U.S. and take advantage of this opportune time - financially and procedurally - to participate in these projects and reside in the U.S. 
 
Please contact us if you would like more detailed information on eligibility for these visas and the application process, as well as the tax implications of becoming a long-term or permanent resident of the U.S. (see Tax Tip below).  More information on the EB-5 category can be found on our website.   
Tax Tip - This Month: Voluntary Disclosure Update and New Exit Tax Guidance
 
By Melissa Gillespie, Of Counsel
 

Voluntary Disclosure Program

According to IRS Commissioner Douglas H. Shulman, more than 14,700 individuals requested to participate in the IRS's offshore disclosure initiative. This is almost twice the initial projection of 7,500 participants.  The IRS initiative, which opened in March 2009, concluded on October 15, 2009.  This deadline was extended twice in hopes of allowing more individuals to voluntarily contact the IRS to disclose these accounts.  Individuals  may still come forward and make a voluntary disclosure in order to avoid criminal prosecution by the IRS.  The reduced penalty framework is no longer in place, but it is still recommended to come forward.  The IRS is conducting a global investigation into tax evasion; accordingly, Switzerland is not the only country that is being reviewed.  This effort to reduce offshore tax evasion is in the beginning stages. 

 

IRS Internal Revenue Code Section 877A- Expatriation

The U.S. imposes a worldwide income tax, gift tax and estate tax on its U.S. citizens and green card holders, regardless of where they are residing.  Because of this never ending U.S. taxing system, many individuals consider relinquishing their U.S. citizenship or their green card in order to escape the long taxing arm of the U.S.  Those who consider such a relinquishment need to be aware of Internal Revenue Code (IRC) Section 877A as added by Section 301 of the Heroes Earning Assistance and Relief Tax (HEART) Act, P.L. 110-245.  This went into effect for those who expatriated (relinquished their U.S. citizenship or U.S. green card) after June 17, 2008.  In essence, the HEART Act imposes an exit tax on the assets of the expatriating individual which assumes all of the assets of such individual were sold on the day before he or she expatriates (the mark-to-market regime).  On November 9, 2009, Notice 2009-85 was issued, which provides guidance to individuals who are subject to the rules of IRC Section 877A.  Notice 2009-85 does not address IRC section 877 which still applies to those individuals who relinquished their U.S. citizenship or green card prior to June 17, 2008.  A summary of Notice 2009-85 will appear in our December newsletter. 
 
Accordingly, individuals who are considering obtaining green cards or U.S. citizenship should carefully weigh the tax implications should they ever decide that they no longer want to retain such status.  The consequences can be very costly and there may be other suitable immigration options available.  In any event, a tax strategy in conjunction with an immigration strategy is critical.
 
Please contact us for more information and if you have questions about the tax implications of being a resident in the U.S. - whether as a permanent resident or even as a temporary non-immigrant working and residing in the U.S.
Global Update - India
 
Globe

The Indian Ministry of Home Affairs ("MHA") issued new guidelines at the end of September which impose new requirements on foreign nationals who apply for business and employment visas.  The scope of allowable business activities under the business visa has been drastically restricted and there will be stricter enforcement of employment visas.

 
Business (B) Visa
Foreign nationals can no longer use a business visa to engage in project or contract work in India.  Only business-related activities will be permitted, including: attending business meetings, conferences, attending company trainings, short visit to monitor the progress of a project, exploring investments opportunities, establishing a business, or purchasing or selling industrial products.  The visa must be issued either from the foreign national's country of origin, or country of domicile if the national has had permanent residence in that country for more than two years. Business visa holders who were already in India performing project or contract work had to leave the country by October 31, 2009 and apply instead for employment visas in their home countries or countries of permanent residence.
 

Employment (E) Visa

Employment visas will be scrutinized to determine if the entering worker will hold a senior-level or skilled position with the sponsoring company.  Applications for low-skilled, routine, or clerical jobs, or jobs where qualified Indian nationals are available will not be approved.  As with the B visa, foreign nationals applying for employment visas must do so through consulates in their country of origin, or country of domicile where they have had permanent residence for more than two years.
 
You can find more information on the Indian Ministry of Home Affairs website.  If you need assistance applying for an Indian business or employment visa from within Germany, please contact us.
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I hope you enjoyed the November edition of our newsletter.  Please feel free to forward to others who may have an interest in these topics.  If you have any questions, comments or suggestions, please e-mail me at [email protected].
 
Sincerely,
 
Magdale Labbe Henke
Attorney-at-Law (U.S.) and Solicitor (England and Wales)
Principal, MLH Consular Consulting