Can a TN Visa holder work as an independent contractor (1099 or W-2)? - Resources Blog - US Immigration FAQs - Richards and Jurusik Immigration Law - Buffalo NY

Neither the USMCA (NAFTA) nor USCIS defines how a TN Visa holder must be paid. They simply state that there must be employment or contractual arrangements between a foreign national and a US entity. Only self-employment through a US company is barred. We discuss compensation and self-employment on a TN visa here.

What is “self-employment?”

Employment in the United States rises to self-employment when the TN Visa professional provides professional services to a US entity that they own, or in which they hold a controlling interest (50% or more). As defined by the USDOS Foreign Affairs Manual and Handbook, 9 FAM 402.17:

“An alien cannot qualify for a TN visa to establish a business or practice in the United States in which the professional will be, in substance, self-employed (including by rendering services to a corporation or entity of which the alien is the sole or controlling shareholder or owner). If the alien seeks self-employment, the alien should pursue that employment under another visa category, possibly to include the Treaty Trader (E-1) or Investor (E-2) visa classification.

Another factor to consider when determining self-employment  in “substantial control”:

  • Did you establish the US entity?
  • Do you have sole or primary contrail of the US entity (Regardless of your ownership % or share ownership)?
  • Are you the sole or primary owner of the business?
  • Are you the sole or primary recipient of income from the business?

If you cannot sufficiently separate yourself from the US entity, then the E Visa or L visa might be more appropriate for your situation.

What ISN’T “self-employment?”

If the TN visa holder owns a foreign company that has contracts with a US entity, this is not considered self-employment, as the TN Visa holder is being paid by a US entity through their foreign company. The majority of ownership in a foreign company also does not bar TN Visa status—a type of arrangement that is common for self-employed IT professionals and management consultants. We also see this scenario when a foreign corporation has a contract with a US entity requiring them to send employees to the United States under the contractual agreement.

Many self-employed business professionals work as independent contractors, and this fact alone does not signal self-employment. If a business professional is performing work in the United States under an employment agreement or a pre-arranged contract with a US employer or US entity, they can still qualify for a TN Visa. In these scenarios, their work in the United States is tied to a contract with a US entity that controls their employment. Either party can terminate the contractual relationship at any time. Such employment arrangements are not considered self-employment for TN Visa purposes.

How you get paid is your choice.

So as long as the TN visa professional is not engaged in self-employment, the arrangements for wages are between the TN Visa holder and the contracting party in the United States. This means a TN Visa holder can be paid either on a W-2 or a 1099. Many IT professionals and management consultants opt to be paid via 1099 through their foreign companies. In fact, a management consultant is typically paid as an independent contractor.

What should I do if I’m considered “self-employed?”

We have seen many scenarios where CBP has even denied foreign professionals entry to the United States on a TN visa for simply having a U.S. company because of the perception of self-employment. If you are self-employed, or you have 50% or more interest in a US company, the L-1 Visa, E-1 Visa, or E-2 Visa might be a better fit. In fact, E-1 and L-1 visas are often a better option for foreign nationals who have multiple US clients.

About TN Visas

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About E Visas

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Don’t know where to start? If you have questions about whether your particular situation qualifies, contact Richards and Jurusik for help with your TN Visas. We have more than 30+ years of experience helping people live and work in the US on TN Visas.

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