NAFTA Business Visitors
Canadian
Canada Business Visitor – After Sales / Lease & Service
The Law – Work Without a Work Permit
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Chapter 16 of the NAFTA, entitled Temporary Entry for Business Persons, provides the mechanisms to achieve that objective. Chapter 16 does not replace, but adds to the existing provisions in the Immigration Regulations.
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R187 defines the criteria for entry as a business visitor. This broad category facilitates the entry of persons to Canada who intend to engage in business or trade activities, and parallels the NAFTA business visitor criteria.
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R187(3) provides the general criteria that must be met, and R187(2) provides specific examples, which are meant to be illustrative. Included in this category are persons providing after-sales service.
General Criteria
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Business Visitors are persons who engage in international business activities related to research and design, growth, manufacture and production, marketing, sales, distribution, after sales services, and general service.
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Key Requirement-Elements
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Foreign Employe
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The primary source of the worker’s remuneration remains outside Canada
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The principal place of the worker’s employer is located outside Canada
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The accrual of profits of the worker’s employer is located outside Canada
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No intent to enter the Canadian labour market, that is, no gainful employment in Canada
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NOTE: Business visitors should have all relevant documents on hand to present to the officer when seeking entry to Canada including letters of support from the business visitor’s parent company and a letter of invitation from the Canadian host business.
After Sales / Lease Services
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The person seeking entry as a Business Visitor must be a citizen (not a permanent resident) of Mexico or the United States. In order to facilitate entry the applicant should have proof of their citizenship in the form of a birth certificate, passport, or certificate of naturalization.
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After-sales/lease services include those provided by persons repairing and servicing, supervising installers, and setting up and testing commercial or industrial equipment (including computer software). “Setting up” does not include hands-on installation generally performed by construction or building trades (electricians, pipe fitters, etc.). This allows persons seeking entry to repair or service specialized equipment, purchased or leased outside Canada, provided the service is being performed as part of the original or extended sales agreement, lease/rental agreement, warranty, or service contract.
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After-sales/lease service also includes situations where the sales/lease agreement or purchase order is for a software upgrade to operate previously sold or leased equipment, a service person coming to Canada to install, configure, or give training on the upgraded software should receive consideration as a business visitor, as long as the after–sales/lease service activity is clearly articulated in the new sales/lease agreement or purchase order. A sales/lease agreement or purchase order for upgraded software is a new contract for a new product. The fact that the upgraded software will be used to operate older equipment that may no longer be under warranty or under a service agreement is irrelevant.
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Service personnel coming to perform service work on equipment or machinery that is either out of warranty, or where no service contract exists, continue to require a Labor Market Opinion (LMO) and a Work Permit. As with NAFTA, hands-on building and construction work is not covered by this provision.
Warranty or Service Agreement
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Service contracts must have been negotiated as part of the original sales or lease/rental agreements or be an extension of the original agreement. Service contracts negotiated with third parties after the signing of the sales or lease/rental agreement are not covered by this exemption. If, however, the original sales agreement indicates that a third company has been or will be contracted to service the equipment, R187 applies and a Business Visitor Record is obtainable. Where the work is not covered under a warranty, a work permit and an LMO is required.
Not Business Visitors (NAFTA Professionals and other Service Providers)
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Where a Canadian employer has directly contracted for services from a foreign company, the employee of the foreign company performing the services for the Canadian company requires a work permit. This situation arises most often in the context of NAFTA. The service provider is not to be considered a business visitor simply because they are not directly receiving remuneration from a Canadian source. Since there is a contract between the Canadian company and the foreign worker’s employer there is a labour market entry. Since that foreign employer is receiving payment for the service that is being provided, it is deemed that the worker is receiving payment from a Canadian source. Consequently, the worker cannot receive consideration as a business visitor.
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Example:
A Canadian airport undergoing expansion engages the services of an American architectural firm located in the U.S. The American architectural firm sends one or more of their architects to Canada to work on the project on site. Since the architects are working in Canada, and since their American employer is receiving payment for their services, the architects do not meet the business visitor criteria and cannot receive consideration as business visitors.
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Documentation
As was the case for persons providing service under NAFTA, all business visitors coming in to do after-sales service for work periods of longer than two days must be documented on a Visitor Record. This requirement serves both as a facilitation and a control measure.
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Supervisors
This provision also covers persons who enter Canada to supervise the installation of specialized machinery purchased or leased outside Canada, or to supervise the dismantling of equipment or machinery purchased in Canada for relocation outside Canada. As a guide, one supervisor can normally be expected to supervise five to ten installers or other workers.
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Trainers and Trainees
R187(2)(b) also covers persons entering Canada to provide familiarization or training services to prospective users or to maintenance staff of the establishment after installation of specialized equipment purchased or leased outside Canada has been completed. It also covers intracompany trainers and trainees.
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Intra-Company Training and Installation Activities
When a person is coming to provide training or installation of equipment for a branch or subsidiary company, they are considered to be business visitors. The same prohibition against hands-on building and construction work as for after-sales service applies. The foreign national should maintain their position in their home branch and not be paid by the Canadian branch above expenses. This provision may also apply to a trainer or specialized installer under an after sales contract by the foreign branch (with the same conditions applying), as long as the service is provided company-wide and not just for the Canadian office.
USA
U.S. Business Visitor – After Sales / Lease & Service
The B-1 (Business Visitor) Visa is a method to bridge the gap during the initial set-up of a U.S. business operation and servicing a client’s immediate needs. The balance of this correspondence will address the B-1 Visa for entry into the United States.
Business Visitors
Business visitors that maintain a foreign country residence may enter and remain in United States for a period of up to one year (six months normal), for the following business activities:
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Research and design, including technical, scientific, and statistical research.
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Growth, manufacturing, and production, including harvest owners supervising harvesting crews and purchasing and production management personnel conducting commercial transactions.
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Marketing, including market researchers and analysts and trade fair and promotional personnel attending trade conventions.
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Sales, including sales representatives and agents taking orders and negotiating contracts for goods or services, but not delivering goods or providing services; buyers purchasing for an enterprise located in Canada.
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Distribution, including transportation operators delivering to, or loading and transporting from, Canada or the United States, with no intermediate loading or delivery within the United States; customs brokers performing brokerage duties associated with the export of goods.
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After-sales service, including installers, repair and maintenance personnel, and supervisors possessing specialized knowledge essential to the seller’s contractual obligation, performing services or training workers to perform such services pursuant to a warranty or other service contract incidental to the sale of commercial or industrial equipment or machinery, including computer software purchased from an enterprise located outside the country, during the life of the warranty or service agreement.
Application as a business visitor may be made at the U.S. POE (Port of Entry) for Canadian and Mexican citizens, otherwise a U.S. Consulate application is required.
Requirements
The requirements for B-1 status, which together we will prepare to ensure compliance, are the following:
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Must leave the United States when the trips purpose is completed.
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Must perform services for non-U.S. employer
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Must be compensated from source outside of the United States
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Must be entering to perform acceptable B-1 duties
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Ownership of the employing company must be located outside of the United States
Non-Canadians – Additional Requirements
Specifically regarding foreign business investment:
Persons who may eventually qualify for E-2 treaty-investor status, once the investment activities have progressed sufficiently to justify its issuance can use the B-1 visa. The B-1 visa can be used only to take the steps necessary to set up the investment, however, such as the opening of bank accounts, acts of incorporation, signing of contracts, and the like. It cannot be sued to actively manage the investment, an activity that constitutes local employment.
Supporting documentation is similar to the E-2 visa category and includes:
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Documents showing the transfer of a large sum of money to the U.S.
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Letters evidencing preliminary negotiations for the sale or purchase of property
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Correspondence with US lawyers/accountants/real estate agents re the E-2 business development plan/strategy
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Contracts/Agreements
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Corporate filings, banking, lease documents for the Canadian enterprise
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Business Plan (comprehensive and/or summary/executive)
For non-Canadian Citizens, the following forms will also be necessary:
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DS-156 (provide online by our firm for completion)
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DS-157 (provide online by our firm for completion)
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Employer correspondence (even if self-employed) setting out the particulars of the business purpose, which includes:
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Purpose of the trip
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Details of the itinerary
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Assurances of continued employment abroad
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Source of salary
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Previous two years income tax return (notice of assessment)
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Children, if minor children – letter confirming enrollment (report cards etc.)
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Property ownership/lease documentation – latest utility bills
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Familiar ties to foreign country
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Supporting documentation establishing:
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Non-immigrant intent
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Legitimate business activity to be engaged in the U.S.
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Passport
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Photograph (passport size)
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Application Fee
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Machine-readable visa fee
