Page 13 - Expat Living Winter 2017

AMERICA
purposes, you must obtain USCIS approval. You may
also be required to file paperwork with the Department
of Labor. Typically this is handled by the employer.
There are several subcategories of non-immigrant visas,
depending upon the length of stay, multiple or single
entries, and other factors. Consulates can advise you on
the appropriate visa, which often can be processed and
issued on the same day.
Over the years the American dream has been an
alluring proposition for a number of investors where the
prospects of year round sun, an outdoors lifestyle and
the chance to be a part of the world’s largest economy
has been too tempting to resist.
While obtaining a green card is not without its
challenges and often requires an investment of
$500,000 or more, an alternative and more suitable
option could be the E-2 Investor Visa. Within six to eight
weeks the visa allows the holder to establish a business
in the US and while the level of investment has no clear
definition, experience shows the amount required would
be at least $100,000.
An increasingly popular consideration for investors who
don’t want to build a new business from the ground up,
is investing in a pre-existing franchise that gives you the the IRS a long time to sift through it all but at some point,
necessary training, support and branding that can often
take years to obtain.
By investing in a US franchise and taking an active role
in the day-to-day management of the company, you,
your spouse and any children under the age of 21 could
find that the E-2 Visa an attractive option.
FATCA
The foreign account tax compliance act (FATCA)
became law in March 2010. A key focus of this piece
of legislation is reporting by US taxpayers of certain
foreign financial accounts and offshore assets. It also
covers reporting by financial institutions about financial
accounts held by US taxpayers.
The objective of FATCA is to ensure the US government
gets its tax dollar from assets US taxpayers have hidden
or not reported outside of the US. British expats in the
US may well not consider themselves a tax dodger as
they believe they are paying the correct amount of tax
in the US and UK. But they may have an issue if they
have left behind bank accounts or investments. FATCA
will look at the underlying structure of the accounts or
investments and if they deem it non-compliant, there
could be further taxes to pay.
An example of this is an offshore investment bond
which would likely be deemed as a passive foreign
investment company (PFIC) and would have its own tax
consequences. For a good number of reasons British
expats in the US may want to keep assets outside of
the US denominated in sterling. There are investment
options to cater for this scenario which are compliant
with the rules of the US taxman, the IRS. They allow a
British expats in the US to retain sterling investments
outside of the US and become tax compliant. They also
allow expats to manage currency risk by allowing a
switch to US dollars should it be advantageous to do so
(and back again if required).
Another area which will be affected by FATCA is the
use of qualifying recognised overseas pension schemes
(QROPS) by British expats in the US. The majority of
QROPS are based in Malta, which has signed up to
FATCA reporting. There is a widely-held belief that
should a British expat transfer their UK pension to a
QROPS while US resident, this will create a tax charge
on the transfer as it will no longer be a qualifying UK
pension scheme. Currently the IRS doesn’t know when
this happens and Britons just report income, which is
taxed through self-assessment.
FATCA reporting will mean that the IRS will find out
when they transferred to the QROPS and could quite
easily issue a tax bill as this a chargeable event. There
are compliant pension schemes available for Britons
living in the US which allow them to make use of tried
and tested double taxation agreements without using
QROPS. These allow the expat to have a US dollar-
denominated pension which stays in the UK - therefore
remains a qualifying UK pension in the eyes of the IRS.
FATCA’s powers are far reaching and the quantity of
information it will uncover will be staggering. It will take
if your US/UK financial planning isn’t compliant, you may
well get a very unwelcome letter from the taxman.
Restrictions On
Highly-Skilled
Entrants To The USA
The US Citizenship and Immigration Services
(USCIS) has announced multiple measures to
deter and detect H-1B visa fraud and abuse.
The H-1B visa programme was designed to help
US companies recruit highly-skilled foreign
nationals when there is a shortage of qualified
workers in the country. But the US government
reckons the system is being abused to the
detriment of American workers.
The USCIS will now take a more targeted
approach when making site visits across the
country to H-1B petitioners and the worksites of
H-1B employees. USCIS will focus on:
l Cases where USCIS cannot validate the
employer’s basic business information
through commercially available data
l H-1B-dependent employers (those who have
a high ratio of H-1B workers as compared to
US workers, as defined by statute
l Employers petitioning for H-1B workers
who work off-site at another company or
organisation’s location.
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