I'm a Canadian permanent resident with an Indian passport having a B-1/B-2 US visa. I want to visit US for two months as a freelancer for non-US company to meet one manufacturer and review their work progress.
Is it legal?
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Yes, assuming the activities you intend to engage in are allowed under B-1 status, and, as DJClayworth notes in his answer, assuming that you are an employee of the company that is sending you to the US. The default period of admission for B-1/B-2 travelers is six months.
You will of course have to convince the immigration officer to let you into the country, so you'll need a plausible story, and the specific activities you plan to engage in must be permissible for a B-1 visitor. Supervising work for a foreign client of a US manufacturer seems like it would be permissible.
If your activities appear to be too much like working, you won't be allowed in. You might want to speak with an immigration lawyer to get more clarity on the kinds of things you are and are not allowed to do in B-1 status.
If you'd rather avoid the expense, you can try to make do with this page from United States Citizen and Immigration Services:
A relevant excerpt:
Requirement 1 - You must be coming to the United States only for a short, defined period of time.
Requirement 2 - You must be coming to the United States to engage in “business.”
The B-1 visa is intended only for business activities that are a “necessary incident” to your business abroad. This covers a wide range of activities such as attending meetings, consulting with associates, engaging in negotiations, taking orders for goods produced and located outside the United States, attending conferences, and researching options for opening a business in the United States (such as locating or entering into a lease for office space). Generally speaking, you cannot engage in any activity or perform a service that would constitute local employment for hire within the United States. What constitutes local employment for hire will depend on the circumstances of each case, but generally speaking, any activity you perform in the United States must be directly connected with and part of your work abroad.
Requirement 3 - You cannot draw any salary from a United States entity.
Another factor to consider is whether you have already spent a lot of time in the United States in recent months. If so, your period of entry may be reduced somewhat, and if you've been in the country for more than four months recently, you are likely to be given a shorter period than two months.
Finally, as pointed out by DJClayworth, working as a contractor for a foreign company is generally treated as "engag[ing] in [an] activity or perform[ing] a service that would constitute local employment for hire within the United States." That's because the foreign company could presumably hire an American contractor to do this.
If your employer has a good reason for needing to send you instead of hiring someone else, they should either hire you as an employee or hire a US immigration lawyer to advise them on how to achieve this.
Very likely not.
A very similar question was asked and answered here, and I recommend reading the answer thoroughly. The issue is with being a contractor. An employee of a Canadian company would probably be allowed to do this, but a contractor will probably not.
In essence this is because while it might be reasonable for a company to need its own employees to go and supervise work, if the job could be done by a contractor then it could be done by an American contractor, and therefore the Canadian would be taking a job from an American. I don't believe the fact that you are a PR makes any difference, and if it did make a difference it would be less likely that it would be OK.
A key point is requirement 2 of the conditions of the B1 visa:
The B-1 visa is intended only for business activities that are a “necessary incident” to your business abroad. [...]Generally speaking, you cannot engage in any activity or perform a service that would constitute local employment for hire within the United States. What constitutes local employment for hire will depend on the circumstances of each case, but generally speaking, any activity you perform in the United States must be directly connected with and part of your work abroad.
You have to be able to say "Here is the work I am doing outside the US, and because I am doing that it is necessary to come to the US and do this." That would be difficult if, for example, you were hired mainly to do this supervision.
You might want to consult a lawyer.