As the crackdown by U.S. immigration authorities on the joint Hyundai Motor–LG Energy Solution battery plant has entered a negotiating phase, Japan, which has made larger investments in the United States than in Korea, avoided the enforcement sweep. Japanese corporations are known to enter the United States in a relatively lawful manner by obtaining expatriate (E, L) visas through U.S. local subsidiaries, rather than using the Electronic System for Travel Authorization (ESTA) or business (B-1) visas.
According to explanations on the 10th by Japanese and U.S. attorneys at domestic law firms, Japanese corporations use expatriate visas when their employees enter the United States. Many set up U.S. subsidiaries earlier than their Korean counterparts, so their approval rate for expatriate visas is high, they said. Expatriate visas are divided into intracompany transferee (L-1), treaty trader (E-1), and treaty investor (E-2), and most Japanese corporations receive E-2 visas. Toyota, the Japanese automaker, established a U.S. subsidiary in California in 1957 and has expanded investment in the United States since the 1990s.
Most Japanese corporations choose to build plants in the United States together with larger-scale partner companies when constructing factories. A U.S. attorney at a domestic firm said, "Japanese corporations do not use as many partner companies as Korea does. Even when they contract with partners, there is a strong tendency to choose firms that have secured means for visa issuance."
By contrast, domestic corporations prefer domestic partner companies out of concerns over communication and technology leakage. These partner firms lack the time and money to set up U.S. entities and have limited records of employing Americans. That is why many partner company employees were arrested and detained in the crackdown at the Hyundai Motor–LG Energy Solution joint plant.
Attorney Lee Jeong-woo of Yulchon said, "Domestic partner companies have no reason to remain in the United States after completing the contracted work, but partner companies of Japanese corporations are larger than Korean firms and some maintain corporate activities in the United States, so visa issuance is relatively smoother." He added, "Japanese corporations spend a lot on legal counsel. Establishing local subsidiaries is costly, but it is that much safer."
Analysts say Japan's corporate culture, which puts great effort into risk management, also plays a role. Toyota, a Japanese automaker, is said to prohibit business trips involving long stays on ESTA under internal guidelines.
A U.S. attorney at a domestic law firm with Middle East deployment experience said, "Expatriates at Japanese corporations are not even allowed to drive overseas under company policy. They manage risk meticulously, being cautious about even minor matters."