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H-1B for Small Company with Negative Profits

H-1B for Small Company with Negative Profits

  • Applicant: Ms. Cheng*
  • Nationality: China
  • Applying For: H-1B
  • Challenges:
    • Small company who have never hired someone for this position previously
    • Company is a start-up and is posting negative financial statements
    • Company did not have a clear business plan for the future
    • USCIS is rejecting H-1B visa applications at an extremely high rate

BACKGROUND

It is a difficult time for any company in the United States to have a worker successfully apply for an H-1B visa. Due to changes in enforcement, but not the law itself, United States Citizenship and Immigration Services (USCIS) are rejecting H-1B visa applications at alarming rates, even for massive, important companies in the tech industry. If massively profitable, huge, and well-resourced companies are getting somewhere around half of their H-1B applications, what chance do smaller, newer businesses have? That was what our client, Ms. Cheng, and the start-up company that wished to employ her were facing. When Ms. Cheng came to us, we took a look at her company and found that there were several roadblocks to her securing an H-1B visa. First, the start-up was quite small. The H-1B visa is for highly specialized workers, why would they need a highly specialized worker if they were so small?

 

KEYS TO SUCCESS

Next, as with most new companies and certainly with start-up companies, they were posting negative financial statements and had been for a period of several years. This is always a knock against the client and company when a USCIS case officer looks over their file, as financial statements that show loss set a negative tone in a case officer’s mind and may indicate that the company is likely to fail. Finally, this was the first time that the company was attempting to hire a person to fill Ms. Cheng’s type of position, and their business plan was not clear on her role within the company or what the company hoped to accomplish by hiring her. With all of these things pointing against her, we knew that Ms. Cheng’s case was on life support. However, because we have seen all of these things in the past, we were confident that if she became our client, we could give her a good chance at success. Ms. Cheng agreed, and we set about making sure that she could get her H-1B visa.

KEYS TO SUCCESS

Even though Ms. Cheng’s situation did not look great from the outside, we knew that we not only had the tools to help her and her start-up employers, but we had already done very similar work in the past. We can do everything from analyzing financial statements to building business plans for our clients, and we knew that we would be doing so for Mr. Cheng and her employers.

The first step was putting together an introduction package for the start-up company. People lose sight of the fact that the documentation package that they submit to USCIS is all the evidence that the case officer is going to consider. It is very unlikely that the case officer is going to research a company on their own. We understand this, and we know that if the case officer has a good understanding of what a company does and how they do it, they are more likely to see the bigger picture into which the H-1B applicant fits. Without that understanding, they are more likely to send a Request for Evidence (RFE) or outright deny a case. While every case officer is different, we know how to put together a comprehensive but necessarily short introduction to our client’s employers to give the case officers this necessary understanding while also not wasting a case officer’s time and energy.

The next step was to mitigate all damages that negative profit margins would have in the mind of any case officer. Once we were able to assess all of the start-up company’s documentation, we were very confident that this would not be an issue. Yes, the company was not making money, but the negative numbers were well within reason for such a small and new company. Negative profit looks like mismanagement to any case officer, but there’s a big difference between acceptable loss and mismanagement. We knew we could present and properly argue that in the case of this start-up, their losses were in the acceptable range and were not due to mismanagement. We wanted any case officer to know that the start-up was run by serious people who, despite the losses, were on top of their business and had kept everything legally up to date in compliance with California law.

Negative profit margins also may cause a case officer to think that a business is in danger of folding, mitigating the need for an H-1B visa. We were able to argue and show that this was not the case with this start-up, mainly by providing a customized cash flow chart showing that they were not in danger of running out of money any time soon. The combination of supporting documentation like the cash flow chart and the legal documents from the state of California and our argumentation completely flipped a negative into a positive for the start-up and Ms. Cheng.

The last step was to tackle the lack of a clear business plan. No matter how much argumentation we do, no matter how long a company can prove they can last without making money, a case officer is going to want to see a complete and clear business plan with the end goal of being a successful, money-making business. Without it, a case officer has little reason to approve an H-1B visa for a worker for that company, as they have no proof that the company should continue to exist. Without a clear business plan, a company might be nothing more than a waste of money, and they shouldn’t approve a foreign worker to come to the U.S. to just cost the business’ bankrollers more money. Fortunately, just because there is a lack of a paper business plan doesn’t necessarily mean that there is no plan. Some companies just don’t operate the way that USCIS is used to operating. We can bridge that gap, and we were able to with this start-up. After meeting with Ms. Cheng and her employers, we were able to map a clear plan for the future of the company, one that Ms. Cheng was a vital part of. We drew up a customized business plan for the company, something that we have done for many clients over the years.

 

OUTCOME

We sent in Ms. Cheng’s H-1B application, complete with our argumentation, company introduction, business plan, and financial statements along with a cash flow chart and information from the state of California proving the company’s strict adherence to the law. Instead of getting rejected, like most H-1B applications, or even getting an RFE, Ms. Cheng was quickly notified of her approval. She was free to stay in the United States and to begin working for her new employer.