In the face of onerous tariffs imposed by the Trump Administration, global fashion and luxury brands are scrambling to navigate this new trade crisis and their already thinning margins. Given the steady decline in sales in recent years, most global fashion brands cannot afford ...
KEY POINTS
- Amid steep tariffs and declining luxury sales, global brands are considering relocating manufacturing to the U.S. to protect their margins and market share.
- This shift in how companies are thinking about manufacturing requires careful immigration planning to bring in foreign experts essential for U.S. operations.
- The various different types of visas offer pathways for companies to legally employ foreign talent, but come with distinct requirements and challenges.
In the face of onerous tariffs imposed by the Trump Administration, global fashion and luxury brands are scrambling to navigate this new trade crisis and their already thinning margins. Given the steady decline in sales in recent years, most global fashion brands cannot afford to bear the additional cost of tariffs themselves, nor would they want to pass on this cost to their customers at the risk of further sales losses. As American consumers represent one of the leading groups of luxury buyers, many global fashion and luxury brands may consider shifting their global supply chains and manufacturing operations to the U.S. to soften the economic blow of the new tariffs.
Building and growing a manufacturing operation is a significant undertaking in any country, let alone in the U.S. This logistical jigsaw is even more daunting for global companies, which must also navigate the complex legal landscape of U.S. immigration. While many companies may ultimately rely on the local U.S. workforce in the long-term, it will be critical for these top-shelf brands to import foreign experts from their headquarters and production facilities abroad to establish the foundation of new production centers, as well as to train local workers to ensure quality standards.
Global companies must start U.S. immigration discussions early on when considering their team of foreign experts who will spearhead development of U.S. production sites. U.S. immigration processes have historically been difficult from a timing-perspective, and under the current administration, the process is now even more challenging. If you are planning to scale up your production capacity in the United States, here are a few work visa options that you will want to to consider and discuss with an immigration attorney.
H-1B Specialty Occupation Visa
The H-1B specialty occupation visa category is one of the most discussed visas in the media. While it is typically considered the bread-and-butter visa for technology and finance sectors, the H-1B visa category can also be a helpful option for fashion and luxury companies. It may be used for professional positions in fields such as: distribution planning, merchandising, supply chain analytics, industrial engineering, design, quality control, and product development, all of which are frequently needed in the fashion and luxury manufacturing process. One key challenge for the H-1B is that there is always more demand than supply, forcing the U.S. Citizenship and Immigration Services ("USCIS") to conduct a lottery. This lottery runs only once a year, in early March, and much like the actual lottery, the odds of being selected is generally low.
L-1 Intracompany Transferee Visa
The L-1 nonimmigrant visa classification is a commonly used route for global fashion and luxury companies with an existing U.S. presence. It allows a U.S. employer that is part of an international organization to temporarily transfer employees from one of its related foreign offices to offices /facilities in the U.S. The employee must have worked for at least one full year out of the prior three in a qualifying role for a company that shares common ownership with the U.S. entity to which she is coming to work. In particular, the L-1A classification applies to intracompany transfers of managers (e.g., Production Managers) and executives and the L-1B classification applies to intracompany transfers of employees with specialized knowledge of the company's processes and systems (e.g. Senior IT Analysts).
Moreover, they must be coming to serve in a managerial, executive or specialized knowledge position. One benefit of the L-1 visa category is that it is not subject to a lottery like the H-1B. Additionally, dependent spouses may work without having to make any filings with USCIS.
E-2 Treaty Investor Visa
The E-2 nonimmigrant visa category is dedicated to individuals who will be employed in executive, supervisory or essential skills position by an ultimately foreign-owned company in the United States (that has made a substantial investment in its U.S. operations). The employee must share the same nationality as the E-2 investor or business (and there must be a treaty of friendship, commerce and navigation in place between the United States and the country of nationality of at least 50 percent of the ultimate foreign owners of the U.S. company).
One of the benefits of the E-2 visa is that it is eligible for renewal indefinitely, as long as the visa holder continues to meet the eligibility requirements. Moreover, like spouses of L-1s, spouses of E-2s may work as soon as they enter the United States, without any USCIS filings.
O-1 Extraordinary Ability Visa
The O-1 non-immigrant visa category is reserved for those in the arts who have achieved distinction and business people who have risen to the very top of their field. Within the context of global fashion and luxury brands, O-1 visas can be extremely useful for accomplished fashion designers, creative directors, photographers and visual arts professionals, as well as individuals on the business side of the company. The O-1 standard for those in the arts (possessing a degree of skill and recognition substantially above that ordinarily encountered) is easier to meet than the O-1 standard for business (the person is one of the small percentage who have risen to the very top of the field of endeavor). Careful vetting and analysis are particularly important when preparing an O-1 case.
In the midst of the new wave of tariffs and unstable consumer markets, U.S. immigration may be a tiny drop in the bucket of worries for global fashion and luxury brands. However, when expanding U.S. operations, it is critical, now more than ever, for global corporations to ensure compliance with USCIS, and the Department of Labor. Preemptive planning and immigration counseling are more important than ever.
Originally published by The Fashion Law.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
