(It is my pleasure to introduce this Guest Column by my colleague Immigration attorney Maria Cifuentes-Marrero)

 

By: Maria C. Cifuentes-Marrero, Esq.
 

It's common, in Miami-Dade County, to have a prospective client, sitting in your conference room from Brazil, Mexico, Colombia, somewhere in Europe or Asia, asking you about the legal ramifications of an IT development or service agreement entered into between their foreign IT service Company and a United States corporation.

This scenario goes beyond the legal agreement in front of you, and it should make the Business Lawyer probe further as to the specifics of the work to be performed and to listen carefully as to the future intentions of that business person sitting in front of you.
 

I recently counsel the CEO of a Brazilian IT company about the immigration ramifications of an IT development contract with a Chicago company. The IT development work to be performed for the Chicago Company requires delivering the developed IT product to the Chicago Company's client located in Puerto Rico. The CEO has consulted a business attorney who told him that since the IT development was going to be done in Brazil, and wrongfully assume that the delivery of the IT product did not require a person in the United States, he did not need to worry about visas or having a business legal entity in the United States.
 

IT services are particularly different to other products or services because they may be provided via the Internet without the physical presence of any employees of the foreign entity in the United States. However, this is not the usual case, more often than not; employees of the foreign entity must visit the US Company to learn about their business practices in order to develop the IT product, to deliver, or to render the IT services. These visits depending on the purpose, length, education and/or hierarchy of the foreign personnel will require a US visa, and sometimes a US work visa.
 

Questions that will highlight the need to create a legal entity and explore immigration consequences:

• Is the service or product going to be physically delivered to the US Company?
• Does it require foreign personnel to go on-site at the US Company?
• Does the foreign entity intend to obtain more US clients?

If the answer to any of these questions is yes, then probably the need to create a US corporation has risen.
 

Choosing the Right Legal Entity for the Business and Structuring Foreign Related Companies.
 

It's in this stage than business lawyers should team up with a business immigration attorney focus on IT businesses to explore the business entity that would best suit the future needs of this foreign client. This election is based on the ownership of the foreign entity, and a meticulous study of the possible US visas available to each individual based on many factors. To name a few of the criteria that must be explore are:

• Ownership of the Foreign Entity or entities;
• Which foreign entities will participate in the execution of the contract
• Nationality of the Foreign Entity based on the citizenship/nationality of its shareholders;
• How many employees are working on each of the foreign entities
• Activity to be performed in the US;
• Nationality of the foreign individual;
• Educational credentials of the foreign individual;
• Length of time working in the foreign entity;
• Position at the foreign entity;
• Length of time required to stay in the United States to perform its duties under the agreement.

Based on this careful study the business lawyer will choose to incorporate one of the following business entities:

• S Corporation
• C Corporation
• Sole Proprietorship
• Partnership
• LLC

 

And linked the US and foreign entity in a particular manner to maximize the work visas available for the entity, such as:

• Parent/Subsidiary
• Affiliate
• Joint Venture
• Branch Office

Many business entities get created without an understanding of their ultimate purpose. This can happen when the foreign client's needs are not explored fully and cautiously in light of their ultimate business goal. The earlier a business lawyer can identify the possible immigration issues that may arise from a business transaction with a foreign entity, the better position the client will be to succeed in their business venture in the US economy.

 

MCifuentes@cifuentesmarrero.com
or 305-573-7418 
            www.cifuentesmarrero.com