A recent inquiry from one of our clients, a Chinese tech company planning to expand operations in the U.S. and seek federal grants, brought attention to a new proposal requiring federal grant recipients to certify diversity, equity, and inclusion (DEI) compliance when registering with the System for Award Management (SAM). This development, while not directly an immigration policy change, has important implications for Chinese enterprises aiming to leverage U.S. government funding or contracts alongside visa strategies like L-1 and EB-1C.

Under the proposed rule, entities applying for or renewing federal grants must affirmatively certify that they meet DEI standards as part of their SAM registration. SAM is the primary platform for federal contract and grant eligibility, and failure to comply could result in disqualification from receiving federal funds. For companies planning U.S. branch offices or subsidiaries, this adds another layer of compliance beyond immigration filings.

From our practical experience, many Chinese clients underestimate the importance of operational compliance when pursuing government contracts or grants. While the L-1 visa focuses on intracompany transfers and EB-1C green cards prioritize managerial roles, the ability to secure federal funding can be a strategic advantage for establishing a strong U.S. presence. We note that the Code of Federal Regulations (2 CFR Part 200) already emphasizes non-discrimination and equitable treatment in federal grant administration, and this proposal seeks to formalize DEI certification as a prerequisite.

In one recent case, a client planning an EB-1C petition for their U.S. subsidiary also intended to apply for a small business innovation research (SBIR) grant. We advised them to initiate an internal DEI compliance review and document policies accordingly before SAM registration. This proactive approach helped avoid delays in grant approval and ensured alignment with USCIS expectations regarding the subsidiary’s operational integrity and governance.

Attorney Insight
Based on these insights, we recommend two immediate actions for clients in a similar position: First, review your company’s current DEI policies and practices, including recruitment, promotion, and workplace culture, to ensure they meet or exceed federal expectations. Second, begin preparing the necessary certification documentation required by SAM, which may include policy statements, training records, and diversity data reports.

While this proposal does not directly affect visa adjudications such as L-1 or EB-1C, it intersects with your broader U.S. business strategy. USCIS reviews often consider the legitimacy and operational substance of the U.S. entity, and being compliant with federal grant requirements can strengthen your case. We also observe that federal agencies increasingly value corporate social responsibility, which may influence future immigration policy interpretations or business evaluations.

In summary, companies seeking to expand to the U.S. and participate in federal grant programs should not delay integrating DEI compliance into their operational framework. This development offers an opportunity to enhance corporate governance and competitiveness in the U.S. market. If you plan to pursue federal contracts or grants, coordinate your immigration filings with compliance updates to present a unified, robust application.

This means for you: Start by auditing your DEI initiatives and prepare your SAM registration materials now. Doing so will streamline your federal grant applications and support your immigration objectives, reducing risks of delays or denials. As always, we are available to assist you in navigating these interrelated processes efficiently.