Why Immigration Should be Part of the Due Diligence Process
October 7th, 2010As the economy improves and we experience an up-tick in business deals, it is more important than ever to remember to include immigration on due diligence checklists. Your business' competitiveness is highly dependent upon your staffing decisions and due diligence in immigration law is necessary to ensure existing staff is not jeopardized by a merger, acquisition, or other reorganization.
The reality is that very few dealmakers are eager to think about immigration until after the closing of the transaction. Unfortunately, late stage or inadequate planning often results in the needless assumption of liability, loss of key personnel, and even the unwitting commission of immigration violations, which may carry significant fines, asset forfeiture, debarment from government contracting or from sponsorship of additional foreign workers, and even jail time for business owners, executives, managers, or human resources personnel. Due diligence is not just about illegal immigrants; it is also about analyzing whether or not foreign workers can move with the business after it's been restructured. Violations are often triggered by the actual closing of the deal, meaning that the moment the transactional documents are signed, foreign employees may find themselves in illegal status and subject to deportation. There is sometimes a small window of time for corrective action, but it is much more difficult after closing than before and frequently the need for action is not discovered until long after the closing celebration when it is too late to reverse the damage.
A sound immigration due diligence will ensure that your business maintains competitiveness in an increasingly global economy.