Dear Sophie: How do I successfully expand my company to the US?

​​Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.

“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”

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Dear Sophie,

I’m an entrepreneur in Guatemala and would like to come to the United States to expand my tech company.

What is the best way to do that?

— Groundbreaking Guatemalan

Dear Groundbreaking,

What fantastic news that you’re looking to tackle the U.S. market. In a recent podcast (which is actually trending in your country the last several weeks!), I discussed my take on how to best establish a startup for immigration success. Whether a founder wants to make their way to the United States – or if they’re already here and want to start a venture of their own – we discussed the details. There are even options for companies that are newly formed with limited funding.

It’s important to know your options when setting up your company in the United States. This knowledge enables your company to successfully sponsor you, your founding team, and other prospective hires for visas and green cards if needed – prospective investors will also feel more comfortable investing in your company. Super important, right?! Before you get too deep into your plans, I recommend you consult both a corporate attorney and an immigration attorney to assist you in your efforts.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

LLC versus Delaware C-corp

One of the first decisions you’ll need to make is how to structure your company in the U.S. A business or corporate attorney will be able to help you make this decision. In general, both corporations and LLCs are able to sponsor individuals for a U.S. visa or green card.

What I typically see in the startup ecosystem are that most VCs prefer investing in a C corporation created in Delaware (Delaware C-corp). That’s primarily because Delaware laws protect investors, and Delaware C-corps can distribute two or more classes of stock and stock options to employees, investors, and board members.

There is no U.S. residency or citizenship requirement to set up a Delaware C-corp, and it can be done within a day. For more info on this topic, listen to my chat about startup law with my good friend and trusted colleague Lindsey Mignano, founding partner of Smith Shapourian Mignano, a corporate law firm based in San Francisco that focuses on startups.

Also, talk to your business attorney about the ownership structure of these entities as well. For example, one possibility is that your Guatemalan company could own your U.S.-based company. However, most investors prefer to invest in a parent company based in the United States, so you could consider setting up your U.S. company to own your company in Guatemala. However, if you’ve already distributed shares in your company in Guatemala, this could be a cumbersome process that might best wait until you’re ready for a funding round. Then, you could do what’s called a Delaware flip — and you should definitely have your corporate attorney advise you on doing that.