Mark Pestronk
Q: A longtime friend of mine owns a large agency in another country. How easy would it be for him or his company to open a branch in the United States to service the U.S.-based employees of corporate accounts in his home country? What legal obstacles would he face? Does ARC allow foreigners to own U.S. agencies? Would he have a hard time getting the required visa from the State Department? Given all the potential obstacles, wouldn't my friend be better off just doing a joint venture with my agency, rather than trying to start from scratch?
A: Compared with many countries, the U.S. is exceptionally welcoming to foreigners who want to set up businesses here. Although your friend could certainly save time and effort by creating a joint venture with you, there is probably nothing to stop him from going it alone if he really wants to do so.
ARC does not prohibit non-U.S. citizens from owning or operating U.S. travel agencies. ARC's rule is that "Any person who is involved in the day-to-day operations of the agency and has access to monies from services issued on ARC Traffic Documents must be a U.S. citizen, U.S. national or an alien authorized to work in the United States." So a foreign citizen without a U.S. visa can certainly own an agency, but he cannot be involved day to day and cannot handle the agency's money until he has the required work visa.
ARC also requires that the "Agent is legally authorized and registered, according to federal, state and local requirements to conduct business in the United States." Here, "Agent" means agency, so the new U.S. agency can even be a foreign corporation, if it is simply registered to do business in the state or states in which it will operate.
Every international business attorney would advise your friend to set up a U.S. corporation or limited liability company rather than have the U.S. agency operate as a mere division or branch of the foreign company. With just one transnational company, the taxing authorities of each country will eventually want to get their hands on the profits of the entire company.
Regardless of whether the new U.S. agency is a new company or just a division of the foreign company, it cannot be classified as a branch office by ARC, so it will need a new ARC appointment, which takes several months at least. Alternatively, the new company could get tickets and even GDS access from your agency, thus avoiding the need for an ARC appointment of its own.
For your friend, the appropriate visa may be the "Treaty Investor" visa, which is for citizens of 80 friendly countries who plan to invest in and own a new U.S. business. The investment must be "substantial" and "sufficient to ensure the successful operation of the enterprise." The visa holder must "have control of the funds," which may mean that your friend will need the visa before applying to ARC.
Your friend's staff might get "Treaty Trader" visas if they are engaged in trade with the home country and work in a supervisory capacity. Otherwise, they might get "Intercompany Transferee" visas for temporary assignments at the U.S. agency.
For specific immigration questions, your friend should consult a U.S. lawyer who specializes in immigration law.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].