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Nationality Issue Relevant In The Representation Of Multinational Korean Companies

by Young H. Noh

The issue of nationality is encountered quite frequently during U.S. immigration practitioners' representations of foreign clients applying for E-1 or E-2 clients, but in the context of private or closely-held companies it usually suffices to verify that the shareholders are nationals of the applicable foreign country. A recent encounter has revealed how the issue of nationality can get quite interesting where a multinational Korean company is involved.

For example:
A Samsung Electronics (a Korean multinational company) manager applies for an E-2 visa to enter the U.S. to work at one of its US subsidiaries. The American Embassy in Seoul denies the E-2 visa application on nationality grounds. For an employee applying for an E-2 visa, the nationality of the employee must be the same as that of the US Employer Petitioner. In this hypothetical involving the U.S. subsidiary of Samsung Electronics, one must look at Samsung Electronics for the controlling nationality, since Samsung Electronics owns 50% or more of the U.S. subsidiary. Due to recent acquisitions by non-Koreans of shares in large, Korean conglomerate companies, there are many large, multinational Korean companies which no longer quality as "Korean" companies (non-Koreans have been aggressively purchasing large Korean companies, whereas local Korean investors have remained sluggish). Samsung Electronics no longer qualify as a "Korean" company in the eyes of the American Embassy in Seoul, Korea.Therefore, the proportion of non-Korean purchases has more than doubled to 43.5%, up from 20.6 percent four and a half years ago.

To date, companies which are no longer considered to be "Korean" companies for the purpose of E-2 visas include:

  • Samsung Electronics
  • Kookmin Bank
  • Hyundai Motor Co.
  • LG Electronics
A strong argument can be made, that despite the controlling FAM provision, Samsung Electronics should still be considered a "Korean" company for E-2 visa purposes, because practically speaking, it is extremely difficult, if not impossible, for foreign shareholders to obtain a de facto control of the company.

The controlling FAM provisions are 9 FAM 41.51 N3.1, N3.2:

"Pursuant to 22 CFR 41.51 (c)2, nationals of the treaty country must own at least 50 percent of the business in question. In corporate structures one looks at the nationality of the owners of the stock. If a business in turn owns another business, then nationality of ownership must be traced to the point of reaching the 50 percent rule with respect to the parent organization. In most cases, this should pose no real problem, but, in modern business structures and layered relationships, consular officers will have to rely heavily on the evidence presented to adjudicate whether the business entity in question possesses the requisite nationality." In addition to this general rule used for determining nationality, the FAM further elaborates on the case of a multinational corporation, which often necessitates consular assistance due to the complex corporate structure that is likely to exist.[1]

The latest word from the American Embassy in Seoul is that it has requested an opinion from the Washington, D.C. whether the companies such as Samsung Electronics should be considered a "Korean" company for purposes of E-2 visas. It would not be surprising if the Washington, D.C. affirms the current practice and issues a cable guidance regarding this issue. One interesting question I might raise is whether the USCIS and/or other Embassies around the world are aware of this issue. In conclusion, immigration practitioners representing large, Korean companies should no longer take for granted that the adjudicating consular officer will consider these companies to possess "Korean" nationality for the purpose of E-2 visa.

[1] 9 FAM 41.51 N3.2 Place of Incorporation "…In case of a multinational corporation whose stock is exchanged in more than one country, then the applicant muse satisfy the consular officer by the best evidence available that the business meets the nationality requirement..."

About The Author

Young H. Noh is an expat U.S. attorney working and residing in Korea. He is co-author of the Chapter on American Embassy in Seoul in Visa Processing Guide published annually by AILA. Young Noh represents Korean clients with their immigration and visa cases and also works with Korean-licensed attorneys to represent non-Korean clients with business and litigation cases involving Korean law. Mr. Noh can be reached at:

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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