L-1

L-1 – Intracompany Executive or Specialized Knowledge

L-1 Visa

The L-1 Visa is a temporary non-immigrant visa which allows international companies to bring foreign employees in the managerial, executive, or specialized knowledge category to its U.S. subsidiary or parent company. The family members (spouse and unmarried children under the age of 21) of the L-1 nonimmigrant are entitled to admission in the L-2 visa. L-1 Visas can be used by large multinational companies to transfer their foreign employees to the U.S. or by small or start-up overseas companies to expand their business and services to the United States. This category requires that the employee holds an executive or managerial position, or has specialized knowledge about company products or processes.

There are two different L-1 visa classifications: L1A and L1B

L-1A Visa – Intracompany Transferee Executive or Manager

L-1A Visas enables a U.S. employer to transfer an executive or manager from its foreign office to its existing office in the U.S.  or to send an executive or manager to the U.S. with the purpose of establishing a new affiliated office in the U.S. An L-1A Visa is granted initially for one year for a new office in the U.S. or three years for a U.S. company with more than one year in existence with extensions available in two-year increments until the employee has reached the maximum limit of seven years.

L-1B Visa – Intracompany Transferee Specialized Knowledge

L-1B Visas enables a U.S. employer to transfer a professional employee with specialized knowledge relating to the organization’s interests from its foreign office to its existing office in the U.S. or to send specialized knowledge employee to the U.S. with the purpose of establishing a new affiliated office in the U.S. An L1B Visa is granted initially for one year for a new office in the U.S. or three years for a U.S. company with more than one year in existence with extensions available in two-year increments until the employee has reached the maximum limit of five years.


 

Requirements for Obtaining L-1 Status

Requirements of L-1 Employer

To qualify for L-1 Visa petition, the employer must:

(1)  Have a qualifying relationship with a foreign company (i.e. parent company, branch office, subsidiary, or affiliate of the foreign company, collectively referred to as qualifying entities or qualifying organizations); AND

· “Parent” means a firm, corporation, or other legal entity which has subsidiaries. Any business entity, which has subsidiaries, is a parent.

· “Branch” means an operating division or office of the same organization housed in a different location. Any such office or operating division, which is not established as a separate business entity, is considered a branch.

· “Subsidiary” means a firm, corporation, or other legal entity of which a parent owns, directly or indirectly:

· More than half of the entity and controls the entity; or

· Half of the entity and controls the entity; or

· 50 percent of a 50-50 joint venture and has equal control and veto power over the entity; or

· Less than half of the entity, but in fact controls the entity.

· “Affiliate” means:

· One of two subsidiaries, both of which are owned and controlled by the same parent company or individual; or

· One of two legal entities owned and controlled by the same group of individuals, each individual owning and controlling approximately the same share or proportion of each entity;

(Note: subsidiaries are affiliates of each other.  The affiliate relationship arises from the common ownership and control of both subsidiaries by the same legal entity.  The following are not affiliate relationships for purposes of L1 Visas: ownership of small amount of stock in another company, exchange of products or services, licensing or franchising agreements, membership on boards of directors, or the formation of consortiums or cartels.)

(2)  Currently be, or will be, doing business as an employer in the U.S. and in at least one other country directly or through a qualifying organization for the duration of the beneficiary’s stay in the U.S. as an L-1.

· While the business must be viable, there is no requirement that it be engaged in international trade.

· Doing business manes “the regular, systematic, and continuous provision of goods and/or services” and does not include the mere presence of an agent or office of the qualifying organization in the U.S. and abroad.

Requirements of L-1A Employee

To qualify for an L-1A Visa, the employee must also:

(1)  Have worked abroad in an executive or managerial position capacity for the overseas company for one continuous year within the three years immediately preceding his or her admission to the U.S.; AND

(2)  Be seeking entry into the U.S to provide service in an Executive or Managerial capacity for a branch/ subsidiary/ affiliate of the same employer;

· “Managerial Capacity” means that the Applicant/Employee:

· Manages the organization, or a department, subdivision, function, or component of the organization;
· Supervises and controls the work of other supervisory, professional, or managerial employees, or manages an essential function within the organization, or a department or subdivision of the organization;
· Has the authority to hire and fire or recommend those as well as other personnel actions if other employee(s) are directly supervised by the Applicant.  If no other employee is directly supervised by the Applicant, the Applicant must function at a senior level within the organizational hierarchy or with respect to the function managed; and
· Exercises discretion over the day-to-day operations of the activity or function for which the employee has authority.  A first-line supervisor is not considered to be acting in a managerial capacity merely by virtue of his or her supervisory duties unless the employees supervised are professional (i.e. hold bachelor’s degree or higher, and work in positions requiring such degree).

· “Executive Capacity” means that the Applicant/Employee

· Directs the management of the organization or a major component or function of the organization;
· Establishes the goals and policies of the organization, component, or function;
· Exercises wide latitude in discretionary decision-making; and
· Receives only general supervision or direction from higher level executives, the board of directors, or stockholders of the organization.

Requirements of L-1B Employee

To qualify for an L-1B Visa, the employee must also:

(1)  Have worked abroad in specialized knowledge capacity for the overseas company for one continuous year within the three years immediately preceding his or her admission to the U.S.; AND

(2)  Be seeking entry into the U.S. to provide services in a specialized knowledge capacity to a branch of the same employer or one of its qualifying organizations.

  • Specialized knowledge is defined as either special knowledge possessed by an employee of the petitioning organization’s product, service, research, equipment, techniques, management, or other interest and its application in international markets, OR an advanced level of knowledge and expertise in the organization’s processes and procedures.

Additional Requirements for New Office L-1 Visa

L-1 Visa Program allows companies the opportunity to send employees to the U.S. to expand their business by opening up a new office in the U.S. The new office means an organization which has been doing business – i.e. providing regular, systematic, and continuous goods or services, but not just through an agent – in the U.S. through a parent, branch, affiliate, or subsidiary for less than one year. A petition involving a new office L-1 Visa can be approved for only a one-year initial period, rather than the usual three-year initial approval, and will have to file for an extension after one year.

For a new office, the “doing business” requirement is eased. The new office must only demonstrate that the U.S. operations will within a year satisfy the “doing business” requirement and can otherwise support the beneficiary.

If the foreign company wishes to send an L-1 visa employee to the U.S. for the purpose of establishing a new office, the following criteria must also be met:

(1)  The U.S. employer must have a federal employer identification number (FEIN);

(2)  Evidence that sufficient physical premises to house the new office have been secured (petitions for companies planning to use “virtual offices” or to operate from locations zoned for residential not commercial use have been denied);

  • i.e. a lease or contract of sale and deed for property.

(3)  Evidence that the foreign national’s required one year of previous employment was in an executive or managerial capacity and that the proposed employment involves executive or managerial authority over the new operation;

(4)  The organizational structure of the foreign entity;

(5)  A business plan for the new office will support an executive or managerial position within one year of approval of the position;

(6)  Evidence that the U.S. employer has the financial ability to pay the transferee’s salary and to commence doing business in the U.S. within one year of receive petition approval; AND

  • i.e. statement by the employer including the proposed nature of the office, describing the scope of the entity, its organizational structure, and its financial goals as well as the size of U.S. investment and the financial ability of the foreign entity to remunerate the employee and to commence doing business in the U.S.

(7)  Foreign company will remain in operation during the full period of the employee’s transfer.

  • i.e. size and length of existence of the foreign company, ongoing contracts for provision of goods or services and provision for management of the foreign operation while the employee is transferred, particularly when the employee is the owner or a principal of the foreign company.

 


 

Proposed Business Plan Additions – for New Office L-1A

Business plan cannot be based on mere speculation. Instead, it must be based on research, sound business principles, and knowledge of the specific industry in the local market. Most importantly, the business plan must be credible.

There is another strong incentive to create a reliable and credible business plan which the company can live up to. Namely, if at the end of the first year, when the company files to extend the transferee’s L-1A status, if the company can show that it lived up to its business plan then USCIS would find it difficult to deny an L-1 extension on the basis that the company hasn’t grown sufficiently to support a manager or executive. If the company hasn’t lived up to the plan, denial is more likely.

Business plan must include:

  • The proposed nature of the office, describing the scope of the entity, its organizational structure, and its financial goals
  • The size of U.S. Investment. No set of minimum exists for the L1 Classification.  The test is rather whether the investment is large enough to cover the U.S. company’s calculated startup costs and to be able to support a managerial or executive position within 1 year of the petition’s approval.
  • The financial ability of the U.S. company to pay the beneficiary’s salary and to commence “doing business” in the U.S.

 

Business plan should include:

  • Market analysis should include the names of competing businesses in the local market, their relative strengths and weaknesses, their products/ services and pricing structures – in order to demonstrate knowledge of the specific industry in the local market.
  • A description of the target market/ prospective customers of the U.S. company
  • Any permits or licenses that may be required in order to engage in the proposed business.
  • Market strategy toward potential investors (e.g., pricing, advertising, servicing).
  • The business’ organizational structure
  • Experience of the key personnel
  • The business’ staffing requirements, including timetable for hiring
  • Job descriptions for all positions
  • Sales, cost, and income projects, and the bases for these projections.

Extension of New Office L-1A after 1 year

There are more detailed requirements to extend L-1A manager or executive status for “new offices” in the U.S. To determine whether to grant an extension after the first year, USCIS considers aspects such as the number of employees, growth in revenues, attainment of significant clientele, etc.

The L-1A extension petition must include the following evidence:

  • Evidence that the U.S. and foreign entities still have the required relationship and are still “doing business.”
  • The duties performed by the foreign national for the previous year and the duties he or she will perform under the extended petition.
  • The staffing of the new operation, including the number of employees and types of positions held accompanied by evidence of wage paid to employees when the foreign national will be employed in a managerial or executive capacity. The best evidence is copies of all IRS W-2 for employees and IRS 1099s for independent contractors. Also, an updated organizational chart showing the company’s employees and independent contractors can be helpful.
  • Evidence of the financial status of the U.S. operation. The U.S. operation’s federal tax return is particularly important. The operation’s U.S. bank statements for the year are also key. A current balance sheet and year-to-date income statement can be helpful too.

Given that during the foreign national’s first year in L-1A status the requirement that the applicant be doing “managerial” or “executive” duties is softened to allow the applicant to undertake the less glamorous duties associated with starting up the new office, the USCIS hopes to see evidence of significant growth in cash flow and customers consistent with the size of an enterprise employing a “manager” or “executive.” It can also be helpful to show that the company has met the goals for the first year set forth in the business plan in the initial L-1 petition and has invested the sums called for in the plan. In case of many small businesses, it is not easy to meet this requirement, so plans and backup plans need to be made starting from even before the “new office” L-1 petition is filed.


 

L-1 Blanket Visa

USCIS has provided a special set of procedures to be used by companies that are frequent users of the L-1 visa category or are large multinational organization. This is called “L-1B Blanket Petition Program”, and under this program, the company need only receive one approval from the USCIS to transfer all other managerial and executive employees and professionals with specialized knowledge during an initial three-year period, and that period can be extended indefinitely upon making an extension request at the end of the first three years.

Eligibility for blanket L certification may be established if:

(1)  The petitioner and each of the qualifying organizations are engaged in commercial trade or services;

(2)  The petitioner has an office in the United States which has been doing business for one year or more;

(3)  The petitioner has three or more domestic and foreign branches, subsidiaries, and affiliates; and

(4)  The petitioner along with the other qualifying organizations, collectively, meet one of the following criteria:

  • Have obtained at least 10 L-1 approvals during the previous 12-month period;
  • Have U.S. subsidiaries or affiliates with combined annual sales of at least $25 million; or
  • Have a U.S. work force of at least 1,000 employees.

In order to qualify under the blanket petitioning process, the employee having specialized knowledge must also be a professional


 

Procedure for Obtaining an L-1 Status

Step 1: Prepare the USCIS Petition

L-1 petitions must include the following forms and supporting documents:

  • Form I-129 (Petition for a Nonimmigrant Worker) and L Classification Supplement Forms;
    • In case petitioner seeks its employee’s L-1 status through a previously approved blanket L-1 petition, Form I-129S (Nonimmigrant Petition Based on Blanket L Petition) should be submitted in lieu of Form I-129 and L Classification Supplement.
    • Petitioner’s support letter, demonstrating that the petitioner and the beneficiary meet the necessary L-1 eligibility requirements;
      • In L-1A cases, the letter should describe:
        • the beneficiary’s typical managerial or executive duties and the % of time to be spent on each;
        • how the beneficiary will manage the organization;
        • how the beneficiary will supervise and control the work of other supervisory, professional, or managerial employees or manage an essential function, department, or subdivision of the organization;
        • whether the beneficiary will have authority to hire and fire or recommend similar personnel actions;
        • how the beneficiary will make decisions on daily operations of the activity or function, establish goals and policies of the organization and exercise wide latitude in discretionary decision-making; and
        • whether the beneficiary will receive only general supervision or direction from higher level executives, the board of directors, or stockholders.
  • In L-1B cases, the letter should describe:
    • The beneficiary’s specialized knowledge duties and % of time to be spent on each;
    • How the knowledge for the position is different that that for similar positions in the industry;
    • State the product, service, tool, research, equipment, process, or procedure that the beneficiary will use that involves specialized knowledge;
    • How the knowledge involved in the position is advanced within the organization’s processes and procedures;
    • How the equipment, system, product, technique, or service is “special” and how it is applied in the international marketplace;
    • Minimum time and training required to obtain that knowledge; and
    • How the beneficiary’s role will enhance the employer’s productivity, competitiveness, image, or financial position.

 

  • Other supporting documentation, which may include:

 

  • From the U.S. Company
    • Most recent SEC Form 10-K, which lists all affiliates, subsidiaries, and branch offices, and % ownership
    • Most recent annual reports, which lists all affiliates, subsidiaries, and branch offices and percentage of ownership
    • Meeting minutes, which list the stock shareholders and the number and % of share owned
    • Articles of Incorporation and bylaws
    • Application for EIN (form SS-4)
    • Stock certificates, stock ledger, and proof of stock purchase
    • Lease of Business Location
    • Bank statement, wire transfer receipts, cancelled checks or deposit receipts
    • Audited accounting reports (balance sheets, profit/ loss statements, cash flow reports)
    • Corporate income tax return
    • Description of company business, company structure, plan of employing new employees
    • Commercial contracts, invoices, bills of lading, letters of credit, etc.
    • Company brochure and pictures of the main office (interior and exterior)
    • Company letterhead

 

  • From the Foreign Company
    • Business license
    • Most recent SEC Form 10-K, which lists all affiliates, subsidiaries, and branch offices, and % ownership
    • Most recent annual reports, which lists all affiliates, subsidiaries, and branch offices and percentage of ownership
    • A detailed list of owners, which includes the foreign entity’s owners’ names, and what percentages they own
    • Meeting minutes, which list the stock shareholders and the number and % of share owned
    • Articles of Incorporation and bylaws
    • Stock certificates, stock ledger, and proof of stock purchase
    • Audited accounting reports (balance sheets, profit/ loss statements, cash flow reports)
    • Corporate income tax return
    • Documents of business transaction (i.e. contracts, bills of lading, letters of credit)
    • Bank statement or transactional records
    • Company letterhead with company logo, name, and address
    • Pictures of company’s main office, factories, or buildings

 

  • From the Beneficiary  
    • Resume
    • Diploma
    • Organization charts showing his or her position
    • Employment verification letter from the foreign company, describing the beneficiary’s qualifying experience, skills and knowledge obtained from the foreign entity
    • A letter from the foreign entity’s Human Resource Department that discusses the beneficiary’s work history
    • Board resolution or appointment documents verifying the transfer
    • Copies of beneficiary’s pay records
    • Copies of beneficiary’s personnel records
    • Copies of beneficiary’s training records
    • Evidence of work product
    • Performance reviews
    • Any other documents showing beneficiary’s capability to conduct business in executive, managerial or specialized knowledge capacity

Step 2: Submit the L-1 Petition to the USCIS Service Center

All forms and supporting documents, together with the correct filing fee, must be submitted to the appropriate USCIS Service Center.

The aliens who are in the U.S. with another nonimmigrant status may apply for an L-1 with the USCIS and request for a change of status (COS). Generally, in order to be eligible to petition for a COS in the U.S. the alien:

  • Must have been lawfully admitted into the U.S. as a nonimmigrant;
  • Must have not committed any act that would make them ineligible to receive immigration benefits;’
  • Must have no other factor that requires them to depart the U.S. prior to making a re-entry based on a different classification;
  • Must request a COS application in the L-1 application before the expiration of their I-94.

If the aliens are already outside of the U.S. and seeking L-1 status, they must use consular processing. Generally, the alien must present the following materials in person at the U.S. consulate once their approved L-1 petition has been sent to the National Visa Center:

  • Form DS-160, the standard nonimmigrant visa application;
  • Passport of the visa applicant;
  • One photographs following Department of State requirements;
  • Applicable application fee;
  • USCIS approval notice (I-797B);
  • Supporting documentation establishing the alien’s eligibility for the particular; nonimmigrant visa sought.

Step 3: USCIS issues official Notice of Receipt

Step 4: USCIS processes Petition

Step 5: L-1 employees obtain an L-1 Visa

From L-1A Status to Green Card Status

Eligibility requirements for the EB-1C green card petition are so similar to the eligibility requirements to qualify for L-1A visa that L-1A visa provides a stepping stone to lawful permanent resident status under EB-1C category. Although there is no requirement for the alien to first obtain L-1A status, an applicant with L-1A visa working for the same company will have a stronger case for the EB-1C immigrant petition.

For more information on EB-1C, please click here.

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