TN changing to E2?

[ith123 0]

I have a bit of a fuzzy situation that if anyone can offer advice it would be helpful.

I'm a Canadian citizen and graduated 2 years ago with a Bachelors and Masters' in Engineering from an Ivy League school. Right after, I co-founded a company making educational software with the university as the first customer. On paper I kept my ownership to less than 50% to avoid breaking the self-employment rule for the TN visa. Then shortly after founding the company, I was hired as an engineer by my co-founder and majority owner (who is a US citizen). I understood this to be ok since I was just a minority holder.

2 years have gone by without an issue and then somehow just coming in a week ago, they start asking me questions about who owns the company, etc. and I tell them my co-founder is a majority holder and I'm a minority holder. I have no idea what flagged them to this - especially after 2 years?? They're not sure about that and say that I might need to get an E2 visa instead and take away my TN visa and say I have to go back to the NAFTA specialist when he's available (they were nice and let me in under a temp B1 visa for now). I was actually unaware of the E2 when we started the company and probably would have just started under that if I knew about it (I thought that the E status needed 1M in capital which I don't have!).

So I'm preparing to talk to the specialist and I just want to know the things to make sure I avoid - I've heard all these horror stories of people getting banned and I really don't want that to happen, I've lived in the US for 8 years since first year of university and would prefer to stay - it's a much better entrepreneurial environment than Canada, as much as I like Canada.

The complication comes here - so while I was at first a minority holder, my co-founder got burned out and became much less involved around a year ago and since then the business has shrunk a bit to the point where I'm in charge and we are exclusively providing services to the College we started with (and I went to) to the point where I'd basically argue that I'm just a contract employee of the College.

So I'd prefer if I could just get another TN, hired directly by the College (which I think they would do since as I said it's basically the situation at this point). Another option seems to be to buy out my partner and get the E2 visa but that takes a lot of paperwork and time and I don't have long term plans for this business beyond this year. My TN was going to expire in Sept 2011 and I was just going to deal with it then, most likely just starting another company or buying one and getting an E2 visa then, but now they have accelerated things for me and I'm not ready yet to do that (I would have enough money to buy a small business and get an E2 that way also which is the idea a year from now).

I'm just worried about two things: first that I was flagged somehow for questioning, I don't know what that means going forward, if I'm always going to get stopped? Also, I should mention that I also have a side investment account where I invest my own and some friends money, so I'm not sure if that matters or if they know about it or if it matters - it's not a job, there is no salary or anything, just a pooled account with stocks that I manage like my own money. I understand that couldn't qualify for an E2 since it's not an operating business, just passive investments.

Thanks for any advice! Mostly just want to avoid doing anything that could get me banned or flagged or in trouble!

[Boiler 45,749]

It does not sound from what you have said that the business is E2 eligible.If you are thinking of that route you need to so some research.

H1b or TN employer of the Uni looks best bet.

[ith123 0]

Why do you say you think the business is not eligible for an E2? It's a software company that doesn't need a lot of capital to be put in, we put in only 20k originally though it has produced 200k in profits since then 2 years ago.

Would I be able to get an E2 if I bought out my partner so I owned 100% of the company? If that happened would they care how much I bought it for? Is that where the $50k or $100k comes from?

What if I hire someone to run the business in the US and I just remain a partial owner but am not active with the business, is there a visa for that or am I just entering as a tourist? If they're suspicious that I am still working for the company, how could I prove to them that I actually hired someone else to do this? (I actually would I'm not talking about faking this, I already have the guy I could just give him more responsibility, I'm ok with that change.)

Thanks!

[Boiler 45,749]

If you set up a US subsidiary staffed by US employees then you have no Visa issues.

You seem to be talking about your Canadian investment, which is sort of irrelevant for complying with US Requiremenr for a US operation.

[ith123 0]

If you set up a US subsidiary staffed by US employees then you have no Visa issues.

You seem to be talking about your Canadian investment, which is sort of irrelevant for complying with US Requiremenr for a US operation.

What do you mean by Canadian investment? I've lived in the US for 8 years and don't have anything in Canada, I co-founded the company in the US after graduating school. There's no Canadian operation, just the US company...

Thanks!

[Dakine10 5,452]

I have a bit of a fuzzy situation that if anyone can offer advice it would be helpful.

I'm a Canadian citizen and graduated 2 years ago with a Bachelors and Masters' in Engineering from an Ivy League school. Right after, I co-founded a company making educational software with the university as the first customer. On paper I kept my ownership to less than 50% to avoid breaking the self-employment rule for the TN visa. Then shortly after founding the company, I was hired as an engineer by my co-founder and majority owner (who is a US citizen). I understood this to be ok since I was just a minority holder.

2 years have gone by without an issue and then somehow just coming in a week ago, they start asking me questions about who owns the company, etc. and I tell them my co-founder is a majority holder and I'm a minority holder. I have no idea what flagged them to this - especially after 2 years?? They're not sure about that and say that I might need to get an E2 visa instead and take away my TN visa and say I have to go back to the NAFTA specialist when he's available (they were nice and let me in under a temp B1 visa for now). I was actually unaware of the E2 when we started the company and probably would have just started under that if I knew about it (I thought that the E status needed 1M in capital which I don't have!).

So I'm preparing to talk to the specialist and I just want to know the things to make sure I avoid - I've heard all these horror stories of people getting banned and I really don't want that to happen, I've lived in the US for 8 years since first year of university and would prefer to stay - it's a much better entrepreneurial environment than Canada, as much as I like Canada.

The complication comes here - so while I was at first a minority holder, my co-founder got burned out and became much less involved around a year ago and since then the business has shrunk a bit to the point where I'm in charge and we are exclusively providing services to the College we started with (and I went to) to the point where I'd basically argue that I'm just a contract employee of the College.

So I'd prefer if I could just get another TN, hired directly by the College (which I think they would do since as I said it's basically the situation at this point). Another option seems to be to buy out my partner and get the E2 visa but that takes a lot of paperwork and time and I don't have long term plans for this business beyond this year. My TN was going to expire in Sept 2011 and I was just going to deal with it then, most likely just starting another company or buying one and getting an E2 visa then, but now they have accelerated things for me and I'm not ready yet to do that (I would have enough money to buy a small business and get an E2 that way also which is the idea a year from now).

I'm just worried about two things: first that I was flagged somehow for questioning, I don't know what that means going forward, if I'm always going to get stopped? Also, I should mention that I also have a side investment account where I invest my own and some friends money, so I'm not sure if that matters or if they know about it or if it matters - it's not a job, there is no salary or anything, just a pooled account with stocks that I manage like my own money. I understand that couldn't qualify for an E2 since it's not an operating business, just passive investments.

Thanks for any advice! Mostly just want to avoid doing anything that could get me banned or flagged or in trouble!

I think you are OK being minority owner (to get around the no self employment rule). The concern is that if you were hired as an engineer, that should be primarily what you are doing. You stated that you are basically in charge now. If your co-founder is not involved and you are making executive or managerial type decisions that may be a problem.

Another problem that may come up is that Tn status is for temporary employment. Nothing you posted indicates that your intent or the position created is temporary.

Working as a contract employee of the college may work going forward but don't try to argue the case retroactively since you were authorized only to work as an employee of your co-founder. Working for the college as a contract employee will also make it easier to show that this would be temporary employment.

Were I in your situation, I would be looking for a good business immigration attorney who has Tn experience. I think your situation is a bit outside the scope of the average Tn holders experience.