Canada: Crossing The U.S. Border: Tips On Entering The U.S. For Business Purposes

By William R. MacGregor

Volume 3:3 July 2000

The main market for most Canadian technology companies is the United States. Canadian-based personnel must therefore be able to enter the U.S. for business purposes. Canadian companies must ensure that their personnel comply with U.S. immigration laws and obtain any necessary work permits. Failure to comply may have dire consequences on a person's ability to enter the U.S..

The key is to analyse the applicant's background and the purpose of the entry to determine: (a) whether a U.S. work permit is needed; and (b) if so, under which immigration category? A comprehensive, well-organized set of supporting documentation must then be prepared to support entry.

Outlined below are some immigration categories that technology companies may find useful.

The NAFTA is the most important tool available to facilitate Canada-U.S. movement. Canadian citizens may use it. There are four main categories under NAFTA:

1. Business Visitors,
2. Professionals,
3. Intra-Company Transferees, and
4. Traders/Investors.

Most Canadian business persons enter the U.S. under this category. There are seven defined Business Visitor "sub-categories": Research and Design; Growth, Manufacture and Production; Marketing; Sales; Distribution; After-Sales Service; and General Service. Care must be taken to ensure that the person's activities truly fit under one of the sub-categories. Otherwise, a work permit will likely be needed.

The after-sales service category is important for Canadian technology companies selling product into the United States. This includes installation, training and service work. It is also the most closely scrutinized sub-category. To use it, certain conditions must be met, including:

• the goods/software being sold to the U.S. customer must originate outside the U.S. and must be purchased from a source outside the U.S.;
• the activity must be supported by wording in the sales agreement or in a service or warranty agreement related to the sale;
• no employee remuneration may be paid directly by a U.S. Source;
• the employee entering must have specialized knowledge necessary for the work being done.

NAFTA lists about 60 professions that may qualify for a U.S. work permit. Minimum educational and/or experiential criteria are set out for each profession. The applicant must be entering to apply the skills of that profession. Professions that are particularly applicable to the technology area are: computer systems analysts, engineers, mathematicians, management consultants and scientific technicians/technologists. Note that particular care must be taken when applying under the latter two professions as they are closely scrutinized.

This category may be used by persons who have executive or managerial positions, or who have specialized knowledge, to transfer from a Canadian entity to a related U.S. entity. The "specialized knowledge" category is useful for Canadians who have unique technical knowledge. To qualify, the transferee must have been employed by the Canadian entity for 12 continuous months out of the preceding three years prior to the transfer. There are special rules for managerial level transfers to newly formed U.S. affiliates.

There are a number of business visitor and work permit categories available outside the NAFTA which may be of use. For example:

Citizens from any country may apply for an H-1B work permit. Therefore, Canadian landed immigrants may find this category to be a useful option. The applicant must have a bachelor's or higher degree or equivalent work experience, and the position in the U.S. must require the degree. The U.S. employer must first file a labour condition application with the Department of Labour. A major problem is that the number of H-1B work permits are capped annually, and usually run out well before U.S. Immigration's year end of September 30th.

This type of U.S. work permit is available to Canadians under the NAFTA and to a number of other nationalities outside NAFTA. Applications under this category are complex and significant paper work is required. The applicant must be an owner, executive, manager, or have essential skills. E visas may sometimes be used by Canadian technology companies to assist in the start-up of a U.S. subsidiary. As well, since no degree is required, this category may be used by personnel that do not have the requisite education to use the professional category under NAFTA.

Tips When Considering Entry into the U.S.

Here are some tips and/or issues to consider and implement before sending Canadian-based personnel to the United States for business purposes.

• Be pro-active: Consider immigration issues and solutions from the outset and determine whether a work permit is needed or is available well in advance of the anticipated entry date.
• Sales/service agreements, corporate structure and business transactions may be designed to assist and support later entry of Canadian-based personnel.
• Consider staffing issues for U.S. based work. Some examples: NAFTA, the most straightforward mechanism, is available only to Canadian citizens; employees' educational background may influence available options; and, Canadian-based landed immigrants and foreign workers may have to obtain a U.S. visitor visa from a U.S. consulate prior to attempting to enter the United States, depending on their citizenship.
• Develop internal procedures or guidelines to educate employees on the immigration implications of cross-border movement, to allow for the timely and efficient collection of information required to prepare supporting materials, and to provide guidance on how to deal with immigration officers.
• Different ports of entry have different reputations and sometimes different processing times. The selection of the port of entry may be important.