Strategic Research Sponsor of the American Bar Association's Section of International LawThe Queen's Award for Enterpise 2012

Research: Trends and Conclusions: Corporate Immigration 2014

Compliance and reform remain the two key issues facing corporate immigration lawyers worldwide. The clear conclusion is that immigration “has gone mainstream” – both legally and politically. This has led to an increase in the number of firms and practitioners on previous years, as larger firms attempt to bulk up their immigration practices, and a greater number of sole practitioners branch out to go it alone.

IMMIGRATION REFORM

Immigration reform has been the bugbear for many practitioners across the world as national governments implement contradictory or piecemeal policies that have served to confuse clients more than aid them. In the US, talk of comprehensive immigration reform has been rife for the last few years, with no solution in sight. Local practitioners all agree that the immigration system is broken: as one source puts it, “The current regime is decades old and so is not capable of coping with the demands of modern immigration policy.” This sentiment was reiterated by many who are struggling to gauge the sentiment in Congress and come up with a suitable timeline for clients as to when potential changes might occur.

In the UK lawyers are also struggling with the political asides inherent in the field of immigration and note a disconnect between the government promoting its “open for business” policy with real-life circumstances. The political nature of immigration law and the different systems in use for EU/non-EU immigration have led the government to focus on immigration they can control, thus leaving non-EU corporate clients perplexed at the over-complication of various processes. Lawyers have noted that despite a nominally simplified system a greater number of clients are now coming in for general advice regarding applications and a significant number of practitioners have now started offering training sessions as an extra branch of their practice. In particular, the regulations surrounding business visitors “leave a lot to be desired” and are seen as a real concern. However, there is hope: increased lobbying from lawyers and pressure from government body UK Trade and Investment has had some success. In an effort to become more business-friendly, the Home Office has been rolling out a number of initiatives aimed at streamlining and facilitating the business immigration process. Examples include the Great Club – an invitation-only fast-track visa service aimed at top business executives, and the Business Helpdesk launched in July 2013, which provides a single point of contact for UK immigration questions.

A similar story can be heard in other jurisdictions, such as Singapore. The Ministry of Manpower announced a new Fair Consideration Framework (FCF) in September 2013, which will take effect from August 2014. Lawyers in Singapore highlight the recent change in mindset, both on the part of the public and the government, with a greater emphasis on protecting local workers. The FCF will therefore require employers to show that they were unable to hire suitable Singaporean candidates for any job vacancies before submitting new Employment Pass applications. This form of restriction shows the changing tide in countries with previously lax immigration rules, which are now sitting up and starting to take more notice of migration and employment statistics. The failing economies in many jurisdictions following the financial crisis had inevitably led to an increase in unemployment. In these circumstances, it has been governments’ natural reaction to become wary of an influx of foreigners arriving for work as has been seen throughout previous decades, as the economic impact of high unemployment rates takes its toll. This most recent financial crisis, and the negative effect which has rippled around the globe, have now led to a greater number of protectionist policies, aimed at ring-fencing jobs for local workers and limiting migration numbers. It is therefore anticipated that workload will increase as enterprises require advice as to how to manage the new restrictions and thresholds.

By contrast, over in South America it is, in fact, the current restrictive policies that are hindering companies. Lawyers in Chile note that immigration is now fairly rapidly on the rise, but their job is made more difficult due to the fact that “current laws do not provide the tools to cope with the increase in applications”. The same can be said in Brazil, where the government has recently been mulling over a new policy with more flexible rules. Recent statistics show that in 2012, foreigners represented only 0.3 per cent of Brazil’s workforce and lawyers talk of the “uphill struggle” to wade their way through laws created during a time of military dictatorship when national security was at the forefront of the government’s agenda.

Whatever the public opinion, all governments want to attract the “brightest and the best” in terms of skilled workers, investors or entrepreneurs. The media perception around the Western world is one of despair and worry that immigration is out of control – but as our practitioners observe, “That is not really the case on the corporate side.” Striking a balance between popular immigration policy and catering for the business community is an issue that all are having to keep track of and many hope that the negative impacts of the former on the latter that have been seen in the recent past have served as a wake-up call for policy-makers. Taking into account the wider context in terms of the global economic slowdown and its effect on corporate entities in their jurisdictions, policy-makers are now even more aware of the importance of aligning new regulations with their “open for business” mantra. In this way, they will be able to ensure that the blocks for building up the economy once again are available. 

 

COMPLIANCE

Advisory work stemming from compliance and the continued growth in audits that was noted last year is still a highly talked-about trend. As one lawyer explains, there has been a real “professionalisation of compliance” which has even led some lawyers to now devote all their time to this particular area. In the US, there has been a sharp increase in the number of audits conducted by the US Immigration and Customs Enforcement (ICE) and also the number of fines handed out to companies. Data provided by ICE shows that from fiscal years 2009 to 2012 the total amount of fines grew from $1 million to over $13 million. This trend towards more aggressive investigations is likely to continue, with ICE also reporting an increase in the number of company managers arrested for I-9 inconsistencies. In this tense environment, with companies ever more concerned about potential liabilities, lawyers are anticipating a steady stream of due diligence work in the years to come.

This is particularly apparent following the infamous Infosys case which saw the largest ever settlement paid in an immigration case, according to the US Justice Department. Infosys, an Indian tech company, was accused of securing business visas (B1s) for its skilled workers to circumvent the requirements of the H1-B work visa programme. The record $34 million civil settlement was announced in October 2013, and many US practitioners have referred to a “post-Infosys world” where the government has been even more difficult to deal with now that its suspicions have been fuelled by previous misdemeanours.

It is not just the US that has observed this rise. The Canadian government is expected to publish new regulations expanding the powers of the compliance wing of Employment and Social Development Canada over employer compliance reviews and worksite inspections. Across in Mozambique, the General Work Inspectorate has launched an immigration compliance campaign in an effort to end work authorisation certificate fraud. Across the globe governments are cracking down on fraudulent behaviour and lawyers will need to ensure that client concerns regarding potential liabilities are alleviated through increased due diligence work.

Another interesting result from this rise in compliance is the growing sophistication of companies that are very much frontloading their application processes to reduce the risk of compliance issues further down the line. Because of this, lawyers working on the immigration aspects of M&A transactions are finding themselves called in earlier than before as clients wish to ensure that the immigration side is dealt with as early as possible.

 

VISA CATEGORIES AND SERVICE DELIVERY

The tech sector has continued to be a boom area, although there are questions as to how well tech companies, and in particular start-ups, are catered for by current immigration rules. In the UK, recent Home Office statistics show that there was a 7 per cent increase in sponsored visa applications from skilled individuals (Tier 2). Of the 42,112 certificates issued, the majority related to the information and communication sector (18,006), closely followed by the professional, scientific and technical activities sector, and the financial and insurance activities sector.

There has also been an increase in both investor and entrepreneur visa applications – particularly on the entrepreneur side. Statistics shows that during the financial year to April 2012, there were 594 investor applications and 1,682 entrepreneur applications. On the entrepreneur side this marks a 1,520 per cent increase between February and December 2012, which has been largely put down to the closure of other routes such as the Tier 1 post-study work category. The much publicised backlog of 9,000 cases that this created also led to frustration on the part of lawyers who were sometimes seeing a huge delay from application to approval or refusal. 

This contrasts with the overall decrease in work-related visas to 141,800 in total – the lowest 12-monthly total recorded since 2005. Our sources gave a number of reasons that may explain this low total figure, and it is likely to be a culmination of the problems being faced across the Tier 1 and 2 categories. The psychological effect of the negative publicity should also not be underestimated: practitioners note that clients may not even be inclined to submit an application if they believe the process would be easier elsewhere in another EU country.

However, in terms of visa-wide service delivery, the situation is very up and down. Following the exposure of the failings in the UK Border Agency which led to its division and the formation of the new UK Visas and Immigration command, several UK lawyers are pleased to note that there has been a speeding up in terms of application processing times. While there is still a lot of “process” involved and “a huge number of boxes to tick”, times are still reasonable, particularly for the ever-increasing number of firms signing up for premium processing – which is definitely “worth the cost” according to one source.

Unfortunately, this has not been the case for all. A number of practitioners bemoan the lack of consistency across the board depending on the centre at which the application is processed. This has led to situations where an average wait of seven and a half days at a New York centre for a Tier 1 type application is starkly contrasted with a 63-day wait at a UK office. Looking at a snapshot of average times for decisions made in October 2013, a Tier 2 application took anything from 10 days at centres in Rio de Janeiro and Ottawa up to 60 days if the application was made in New Delhi. In jurisdictions such as South Africa, permanent residence applications can take anything between one and three years – a situation which the government promised to address in its May 2013 budget vote. 

In the US, the biggest trend has been somewhat negative, and circles around the restrictive nature of L1 visa (intra-company transfer) approval. With the US immigration service under more pressure and applicants needing to provide significantly more documentation and evidence, there has been a sharp increase in time from filing to approval. Therefore from a business standpoint, lawyers are required to put far more effort and time into cases, thus impacting on workload and fees.

The pick-up in the economy has also led to a renewed enthusiasm for the H1-B visa. For the first time since 2008, the US Citizenship and Immigration Services (USCIS) reached the statutory cap of 65,000 for the 2014 fiscal year within the first week of the filing period. According to the USCIS website, it received approximately 124,000 H1-B petitions within the first five business days and thus used a lottery to select a sufficient number of petitions to meet the caps of 65,000 for the general category and 20,000 for the advanced degree exemption. Described as the “workhouse” of the US immigration system, practitioners expressed concern over the intense competition surrounding the granting of this visa, and the inadequacy of the current quota. Again, the tech industry was singled out as a sector hit particularly hard by the lack of H1-Bs given the large number of skilled workers in the top technology firms who hold such visas (an example can be shown with Intel, which has about 5 per cent of its US employees on a H1-B visa). This is one aspect of the system that lawyers hope will be improved once immigration reform finally comes about.

 

LEGAL MARKETPLACE

Corporate immigration is a three-tier system according to our sources – from sole practitioners to medium-sized firms up to the big powerhouses Fragomen and Berry Appleman & Leiden. The type of work therefore also varies as each style of firm deals with a different aspect of the broad immigration field. Immigration, and in particular corporate immigration, can be described as highly commoditised compared to most other practice areas: as already stated, there is a lot of process involved. Wading through the various forms to fill in as well as potentially dealing with multiple jurisdictions may be best dealt with by one type of firm, whereas more individual cases involving smaller companies will require another. There is room for all – as demonstrated by the fact that this tiered system has been in existence for many years. But it is important to note that corporate clients, whether they are tech start-ups or large multinationals, are also aware of this difference and therefore will choose a firm most suited to their specific needs at that time.  

An interesting development in the UK market is the rise of OISC-regulated consultancies, adding a fourth branch to the already varied field. In order to provide professional immigration advice, it is possible to be regulated solely by the Office of the Immigration Services Commissioner (OISC) as opposed to the standard legal professional bodies: the Solicitors Regulation Authority (SRA) and the Bar Standards Board (BSB). Such providers that are not regulated by the SRA or the BRB must comply with the OISC’s Code of Standards and Rules instead. While there has always been a number of OISC-regulated immigration advisers, lawyers have marked the frequency with which these consultancies are now taking on bigger name clients. Sources observe that this incidence of a new wave of immigration advisers is also likely to increase as other companies (such as accountancy firms) move towards the alternative business structure model in order to be able to deliver more legal services. Corporate immigration appears to be an area that they are likely to focus on, given the commoditised nature of certain aspects of the field, and traditional law firms will need to keep watch of this as competition will inevitably increase.

That being said, everyone is in agreement that the system is becoming so complicated to the point that it is now “impossible to dabble in”, because of the constant changes in the rules and regulations. Whereas before it could have been the case that an employment lawyer at a larger firm might deal with any small immigration issues as and when they come along, this is becoming increasingly difficult to achieve.

Fee pressure is a constant worry, expressed by lawyers across the globe. As one source put it, “Clients are expecting more bang for their buck.” One of the challenges for practitioners looking forward is being able to provide top-level advice with a reasonable fee structure, as clients looking for value for money are “more than happy to shop around”.

Experience is vital and integration is key according to our specialists. While many will have a specialism, it is still important to have breadth in terms of knowledge, as it is only possible to provide the best immigration advice with awareness of all the potential options. Following on from this, “it is all about providing a joined-up service,” particularly with the aforementioned pressure on fees. Despite the fact that there will always be immigration cases, firms will need to be “faster, better and more cost-effective” if they do not want to get left behind.

Back to top

Follow us on LinkedIn

News & Features

Community News

Analysis

Features

Pro Bono

Corporate Counsel

Women in Law

Future Leaders

The UK Bar

Practice Areas

Firms

The Who's Who Legal 100

Awards

Special Reports

Events

Shop

About Us

It is not possible to buy entry into any Who's Who Legal publication

Nominees have been selected based upon comprehensive, independent survey work with both general counsel and private practice lawyers worldwide. Only specialists who have met independent international research criteria are listed.

Copyright © 2017 Law Business Research Ltd. All rights reserved. | http://www.lbresearch.com

87 Lancaster Road, London, W11 1QQ, UK | Tel: +44 20 7908 1180 / Fax: +44 207 229 6910

http://www.whoswholegal.com | editorial@whoswholegal.com

Law Business Research Ltd

87 Lancaster Road, London
W11 1QQ, UK