NAFTA contains special provisions concerning immigration between the three signatory countries. Chapter 16 of NAFTA, entitled "Temporary Entry for Business Persons" provides the mechanisms to facilitate the movement of business persons between the three countries.
Chapter 16 eases, on a reciprocal basis, the temporary entry of citizens of the United States, Canada and Mexico, in specific areas of business activity detailed in the Agreement. However, it must be noted that NAFTA does not replace existing general legislation concerning immigration matters in any of the three countries.
NAFTA grants preferential treatment to certain business persons and professionals who are citizens of any of the three countries and who require temporary entry for a purpose recognized by this treaty.
The temporary entry provisions of Chapter 16 are restricted to citizens of the United States, Mexico and Canada. In the case of the United States, citizens of Puerto Rico are covered by NAFTA, but citizens of Guam, the Northern Mariana Islands, American Samoa, and the United States Virgin Islands are excluded from NAFTA. Permanent residents of the United States, Canada and Mexico are not covered, and they continue to be governed by the general provisions concerning temporary entry for foreign workers found in each country's immigration laws.
Business Visitors are business persons who plan to carry on business activity related to research and design, growth, manufacturing, production, marketing, sales, distribution, after-sales service and general service.
The business activities covered by Appendix 1603.A.1 of the NAFTA are of a commercial nature and reflect the components of the business cycle.
Applicants who wish to gain entry under the "After-Sales Service" sub-category of Business Visitors must comply with a number of additional requirements, and must demonstrate that: the purpose of entry is to install, repair, service, supervise, or train workers to perform services; the equipment or machinery (including computer software) is commercial or industrial (not household or personal); it was manufactured and purchased outside the country; the work is done pursuant to an original sales contract and any warranty or service agreement is incidental to the sale; the work is carried out during the validity of the warranty or service agreement or any extensions of same; the work requires specialized knowledge, and excludes hands-on building or construction work. "Specialized knowledge" is considered to be a very high degree of knowledge given only to persons who are already skilled in their occupation and have undergone extensive training.
Persons applying under the After-Sales Service sub-category must possess the level of skill or knowledge necessary to perform the occupation, which must be at least post-secondary education relevant to the area of service, or the possession of a license, certification or other accreditation issued by a competent authority or administrative supervisory body. The person seeking entry must also possess the appropriate training, which is viewed as essential to providing the service and may include training and supervising others who will actually perform the activities of the machinery, equipment or software.
Professionals identified in Appendix 1603.D.1 of the NAFTA may qualify for temporary entry under the treaty, if they have the necessary qualifications to work in their professions, have pre-arranged employment, enter a signatory country for the purposes of providing professional-level services in the same field of their qualification, and comply with existing immigration requirements for temporary entry.
Appendix 16.03.D.1 contains over sixty occupations and is the mechanism by which selected professionals can enter to provide their services. It must be noted that the Appendix is a comprehensive list of occupations and cannot be interpreted. An occupation which does not appear in the list is automatically excluded. However, there is some room to allow for different job titles, which may be within the occupations defined in the Appendix. The Appendix also details Minimum Educational Requirements and Alternative Credentials for each profession. These are the minimum criteria for entry and do not necessarily reflect the educational requirements, accreditation or licensing necessary to practice a profession in a signatory country.
Professionals can also be admitted as Business Visitors under the General Service provisions of Appendix 1603.A.1, when they are not seeking to enter the labor market but will be performing activities such as soliciting business, consulting, providing services and meeting clients.
It must be noted that the Professionals category does not allow self-employment. A person wishing to be self-employed should consider making an application under the Trader or Investor category, rather than the Professional category.
The temporary Work Permit issued under the Professionals category is initially valid for a maximum of one year, but can be extended, provided that the professional continues to meet entry requirements under that category. Although there is no time limit on extensions, applicants must satisfy Immigration officers that their employment continues to be "temporary" and that they are not using the NAFTA entry provisions as a means to circumvent normal immigration procedures.
Business persons who are employed in a managerial or executive capacity, or in a position which involves specialized knowledge, may be transferred between NAFTA countries to a firm, corporation, affiliate or subsidiary.
An executive does not generally perform duties necessary in the production of a product or in the delivery of a service. In smaller businesses, the title of the position may not be sufficient to establish that the position is managerial or executive. In order to qualify as a manager or executive as described in the Intra-Company Transferee category, the person must be engaging in managerial or executive duties. A first-line supervisor is not considered to be acting in a managerial capacity unless the employees supervised are professional. A manager does not primarily perform tasks required in production of a product or in the delivery of a service. An applicant seeking to open a new office on behalf of the enterprise may also qualify under this category, if the new branch is expected to support a managerial or executive position or, in the case of specialized knowledge, is to be doing business in a signatory country.
Work Permits issued under this category can have a maximum validity of three years. However, individuals admitted to open an office or to be employed in a new office are normally issued an initial authorization for a maximum of one year. Extensions can be granted for up to two years, if the person continues to comply with the eligibility requirements of Intra-Company Transferees. It must be noted that the Intra-Company Transferee visa is the only one to have a maximum duration of three years. The total period of stay for a person employed in a position requiring specialized knowledge may not exceed five years.
An applicant can be granted Trader status if he is a business person who is seeking temporary entry to carry on substantial trade of goods or services principally between signatory countries.
The applicant may be trading on his or her own behalf, or as an agent of a person or organization, or he may also be an employee of a person or corporation maintaining Trader status. The individual or corporate persons who own at least a 50% interest (directly or by stock) in the entity established must hold citizenship of a signatory country. Joint ventures and partnerships are limited to two parties only. The applicant who is seeking temporary entry must do so to carry on substantial trade in goods or services, principally between signatory countries.
When a person is applying under the Trader category but will occupy the position of employee, he must be employed in a capacity that is supervisory or executive or involves essential skills. There is an exception to the criterion of essential skills for highly trained technicians. These are persons who are employed by the firm to train or to supervise personnel employed in manufacturing, maintenance and repair functions, and may be granted Trader status even though some manual duties may be performed, provided that the firm cannot obtain the services of qualified local technicians. The emphasis is on "highly trained."
Traders are issued Work Permits that can have a maximum duration of one year, but can be extended for up to a maximum of two years, provided that they continue to meet the requirements of the category.
Investor is defined as a business person who is seeking temporary entry to develop and direct the operations of an enterprise, in which they have invested, or are actively in the process of investing, a substantial amount of capital.
The criteria that must be met include the following:
* The applicant must be a citizen of a signatory country.
* The enterprise or firm to which the applicant is coming has Canadian, American or Mexican nationality. This is determined by means of control or ownership of at least a 50% interest (directly or by stock) in the entity established. Joint ventures are limited to two partners. They may also include parent/subsidiary situations, and the nationality of the corporate entity established must be then considered. The place of incorporation of an enterprise is not an indication of nationality; it is only an indication of ownership and control.
* The applicant who is seeking temporary entry must solely "develop and direct" the operations of the enterprise in which he has invested, or is actively in the process of investing, a substantial amount of capital.
If the applicant is in the process of investing, mere intent to invest or prospective investment arrangements without present commitment will not suffice. The applicant must be close to the start of actual business operations, not merely in the stage of signing contracts or investigating suitable locations and property. The investment funds must be irrevocably committed to the business. Whether an investment has been, or will be made, the applicant must demonstrate prior or present possession and control of the funds or other capital assets.
There is no minimum dollar figure established for meeting the requirement of "substantial" investment. Substantiality is normally determined by using a "proportional test" in which the amount invested is weighed against the total value of the particular enterprise in question; or the amount normally considered necessary to establish a viable enterprise of the nature contemplated. Letters from chambers of commerce or statistics from trade associations may be reliable for this purpose. Only the amount already invested or irrevocably committed for investment can be considered in determining substantiality.
The enterprise must be a real and active commercial undertaking which operates to produce some service or commodity for profit. It cannot be a paper organization or a speculative investment. For instance, passive investment in developed or undeveloped real estate or stocks does not qualify.
The objective of Investor status is to promote productive investment. Therefore, an applicant is not entitled to this status if the investment, even when substantial, will return only enough income to provide a living for the applicant and family.
Work Permits are issued to an Investor at the time of entry normally for one year, although they can be extended for up to two years provided that the Investor continues to meet the requirements of the category.
NAFTA reflects the already existing preferential trading relationship between American and Canada, and has been expanded to include Mexico. Future expansion is possible, and Canada has already negotiated a treaty with Chile, the Canada-Chile Free Trade Agreement (CCFTA), with a view of incorporating Chile into NAFTA. If that happens, CCFTA will be suspended and NAFTA will be modified accordingly to accommodate the new technical requirements.NAFTA has been instrumental in promoting and accelerating the economic integration of North American economies.