Why TN Visa Holders Can’t Be Self-Employed by the Sponsoring Employer

Today, we’re diving into an important topic for those looking to work in the U.S. under the TN visa category: why self-employment is a no-go. If you’re researching the complexities of immigration law or just curious about your options, you’re in the right place.

First off, let’s understand what the TN visa category is all about. Created under the North American Free Trade Agreement (NAFTA), now succeeded by the United States-Mexico-Canada Agreement (USMCA), the TN visa allows citizens from Canada and Mexico to work in the U.S. in prearranged business activities for U.S. or foreign employers. It’s a fantastic pathway for professionals with certain qualifications to engage in employment stateside. But here’s the twist: being self-employed or possessing a majority of the petitioning entity’s ownership/control is absolutely prohibited. 

Why, you ask? Well, according to the regulations governing TN status (found in 8 CFR 214.6), the visa requires a clear employer-employee relationship…

§ 214.6 Citizens of Canada or Mexico seeking temporary entry under NAFTA to engage in business activities at a professional level. (a) General. Under section 214(e) of the Act, a citizen of Canada or Mexico who seeks temporary entry as a business person to engage in business activities at a professional level may be admitted to the United States in accordance with the North American Free Trade Agreement (NAFTA).

Section 214.6(b) then describes what it means to “engage in business activities at a professional level…

Engage in business activities at a professional level means the performance of prearranged business activities for a United States entity, including an individual. It does not authorize the establishment of a business or practice in the United States in which the professional will be, in substance, self-employed. A professional will be deemed to be self-employed if he or she will be rendering services to a corporation or entity of which the professional is the sole or controlling shareholder or owner.

The rule of thumb is that self-employment – where the visa holder would control the conditions of their employment – does not satisfy this requirement. This stipulation ensures that the visa holder’s role and responsibilities are well-defined and regulated, aligning with the visa’s intent to fill specific employment gaps in the U.S. workforce.

Now, for those of you wondering how you might navigate these waters successfully, let’s talk strategy. The key lies in the structure of your employment relationship. If you’re aiming to work under TN status without crossing the self-employment line, ensure that the petitioning entity retains control over your work. This means that even if you have a significant stake in a company, you should not hold majority ownership or control. By maintaining a traditional employer-employee dynamic, where the company directs your tasks, sets your hours, and provides your benefits, you align with the legal requirements.

Success in these cases often hinges on clear, concise documentation. Be prepared to present contracts, corporate documents, and detailed letters from the petitioning entity that both outline…

1. the nature of the employment relationship re: your role, and how the company retains control over your work conditions, and
2. that you do not possess majority ownership and control within the operating of the company itself.

Note that ownership and control are not one in the same; merely holding shares itself doesn’t connote control. Control is often understood by the amount, if any, of the voting rights a shareholder possesses within a company. A powerful way to overcome presumptions of self-employment may be to present articles of incorporation or other legal documents confirming that fellow shareholders in the company possess more than 51% of the company’s share as well as more voting power collectively than you. The more clearly you can demonstrate the specifics of this ownership and control structure, the smoother the process will be.

Navigating the intricacies of TN visas and self-employment rules can seem daunting, but with the right approach and understanding, a TN approval is entirely possible. Remember, every situation is unique, so consulting with a seasoned immigration professional can provide tailored advice and peace of mind. Here’s to your success, and may your journey be smooth and straightforward – contact us if you need help!