Can a TN visa holder be a contractor (1099)? Although a TN Visa holder is not allowed to be self employed, this does not prevent them from working in the United States on a TN Visa as a contractor. Many self-employed business professionals work as independent contractors, this alone does not signal self-employment. If a business professional is performing work in the United States under an employment agreement, a pre-arranged contract with a U.S. employer/U.S. entity, they can still qualify for a TN visa. In these scenarios their work in in the United States is tied to a contract with a U.S. entity who 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. We have helped many business professionals obtain TN visa status through contractual relationships with U.S. entities. This includes being paid through a contractual relationship with a foreign company owned by a TN visa professional. We see this scenario often with I.T. professionals and Management Consultants who have foreign companies through which they contract their services to U.S. companies as contractors.
Contact us if you have questions about working as a Contractor (1099) on a TN visa!
What is self-employment for TN Visa purposes?
Self-Employment: 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.
Employment in the United States arises to self-employment when the TN Visa professional provides professional services to a U.S. entity that they own, or in which they hold a controlling interest (50% or more).
Can a TN visa holder obtain a TN visa through their foreign company?
Self-employment for TN visa purposes is when a TN visa holder has ownership of 50% or more in a U.S. company. If the a TN visa holder owns a foreign company that has contracts with a U.S. entity, this is not considered self-employment. The TN visa holder is being paid by a U.S. entity through their foreign company. Majority ownership in a foreign company does not bar TN visa status. This type of arrangement is common for self-employed I.T. professionals and Management Consultants. We also see this scenario when a foreign corporation has a contract with a U.S. entity requiring them to send employees to the United States under the contractual agreement.
Can a TN visa holder obtain a TN visa through their U.S. company?
Self-employment is not allowed under the TN Visa. This means that if a foreign national owns a U.S. company (50% or more) they cannot obtain a TN visa through that company. We have seen many scenarios where CBP has even denied a 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 have 50% or more interest in a U.S. company, the L1 Visa, E-1 Visa, or E-2 Visa might be a better fit. In fact, the E-1 and L1 visas are often a better option for foreign nationals who have multiple U.S. clients.
Can a TN visa holder be a contractor (1099)?
Neither the USMCA (NAFTA) or USCIS define how a TN visa holder must be paid. They simply state that there must be a contractual/employment arrangement between a foreign national and a U.S. entity. Only self-employment through a U.S. company is barred. This means a TN visa holder can be paid either on a W2 or 1099. The arrangements for wages is between the TN visa holder and the contracting party in the United States. Many I.T. professionals and Management Consultants opt to be paid via a 1099 through their foreign company. In fact, a Management Consultant is typically paid as an independent contractor.
In what type of arrangements can a TN Visa holder be contractor?
We most often see TN Visa holders as contractors (1099) under the Management Consultant profession. However, it is also common to be an independent contractor as an I.T. professional. This does not mean that other TN Visa holders cannot be contractors on a 1099. As long as the TN visa professional is not engaged in self-employment, renumeration is between the U.S. employer and the TN Visa professional.
If you have questions about whether your employment arrangement in the United States qualifies for a TN Visa, we can help.