Traditionally, the L-1 visa is known for relocating senior employees of large foreign companies to the U.S. However, it is also a suitable immigration option for those opening businesses in America. Thus, a foreign company owner and manager can open a subsidiary in the U.S. and, if meeting legal requirements, qualify for a green card. This means a business owner managing his or her company doesn’t necessarily need the more complex and costly investor visa to obtain immigration status and conduct business in the U.S.
Under Section 101(a)(15)(L) of the U.S. Nationality and Immigration Act, international managers and senior corporate employees can obtain an L-1 visa if certain conditions are met. First, the applicant must have worked for a foreign company, its subsidiary, or an affiliate for at least one of the three years preceding the L-1 visa application and arrival in the U.S. Second, the employee-manager must prove their intention to continue working for the same employer or a subsidiary in the U.S. Third, the employee coming to America must engage exclusively in managerial work.
An employee manager applying for an L-1 visa must demonstrate that the purpose of his or her stay in the United States is to continue working for the same employer or a subsidiary. Additionally, the employee is required to perform exclusively managerial tasks.
When applying for immigrant status using Form I-140, the application is made on behalf of the employer. The employer bears the responsibility of proving that the position offered to the alien meets the requirements of the Immigration Act by a preponderance of the evidence. The immigration officer will make grant the petition if the totality of the evidence suggests that the facts stated in the application are more likely than not true.
Who is an international manager?
Under the Immigration Act (see 8 U.S.C. § 1101(a)(44)(A)), a managerial position involves overseeing the entire organization or a specific department or function thereof. The definition includes employees who assume full responsibility for the organization’s specific functions. Managers must supervise other subordinate managers, professional employees, or those performing supervisory functions. This can be demonstrated by showing responsibility for the organization’s key tasks or a specialized part of the company. Additionally, if managing other employees, the manager should have the authority to hire and fire staff, or at least make recommendations on corporate policy regarding employees. If there’s no system to monitor work performance, the manager applying for immigrant status should hold the highest position in the organizational hierarchy or manage a particular section of the company. The manager should have autonomy in decision-making regarding routine functions of the enterprise.
The Immigration Act (see 8 U.S.C. § 1101(a)(44)(B)) defines “executive capacity” similarly. “Company executives” eligible for an L-1 visa are those in a managerial position with the authority to oversee other employees, control significant parts of the enterprise, and bear full responsibility for setting the organization’s main objectives and policies. Executives should have considerable freedom in decision-making and their actions should not be subject to detailed scrutiny by other employees. They should only receive general advice and recommendations from senior employees, board members, or shareholders.
The regulations implementing the above provisions of immigration law (see 8 C.F.R. §§ 214.2(l)(1)(ii)(B) and (C)) provide further details about the permissible activities of “managers” and “senior corporate employees.”
Opening a New Enterprise in the U.S.
Applicants for L-1 visas are often sent to the United States by their foreign companies to open American representative offices. To open a new office in the U.S., the L-1 visa application must include evidence that the company has secured the necessary office space through purchase or lease. It must also be proven that the executive has served as a “manager” or “senior executive” in the main company located outside the U.S. for at least one year in the last three years. The application should detail the structure of the proposed U.S. enterprise, providing convincing arguments that the U.S. office will be organizationally well-developed and that the positions of “manager” or “executive” will indeed be justified. Detailed information about the goals of the new office and the company’s expected financial performance is important. Immigration authorities will be interested in the size of the company’s investment in America. Crucially, evidence of the U.S. company or its foreign parent company’s ability to pay the specified compensation to its “executive” or “manager” must be provided. An organizational chart of the foreign enterprise is also needed.
Affiliates and Subsidiaries
The terms “affiliate” and “subsidiary,” as used in section 101(a)(15)(L) of the Immigration Act, have clear definitions. An affiliate is a company that is part of the same corporate group as another company, with one legal entity or individual controlling both. Alternatively, affiliates can be companies with the same groups of legal entities or individuals as shareholders, owning approximately equal shares in each enterprise.
According to 8 C.F.R. § 214.2(l)(1)(ii)(K), a subsidiary is a company more than 50 percent owned, directly or indirectly, by a parent entity. In this arrangement, the parent company must have control over the subsidiary.
According to the second, alternative definition of a subsidiary, a joint venture can be considered a subsidiary if exactly 50 percent of the shares are owned by another enterprise. In this scenario, the parent company must still maintain equal control over the “subsidiary” and have the right to veto decisions made by this company. A third definition of a “subsidiary” applies to a company where less than 50 percent of the shares are owned by another firm. However, in such cases, one must show that the parent company still exercises control over the subsidiary.
The Number of Employees
Section 101(a)(44)(C) of the Immigration Act allows immigration officers to consider the company’s number of employees when determining if a manager or executive meets U.S. law’s high standards. Thus, officials from U.S.C.I.S. and the U.S. Department of Justice may consider the organization’s operational requirements and assess the application in light of the company’s overall objectives and level of organizational development. However, merely managing a large number of people does not solely qualify an employee as a “manager” or “senior executive of a company.” Conversely, it is not advisable to apply for “manager” or “senior executive of a company” status if the company employs only a few individuals.
There have been federal cases involving the deportation of unsuccessful L-1 applicants where the plaintiffs argued that the Immigration Act discriminates against small businesses compared to larger ones, in violation of the U.S. Constitution. These individuals, whose companies had limited staffing, contended that immigration rules effectively forced small businesses to employ an unrealistically large workforce to justify international management positions. They claimed that the law de facto prevented small businesses from obtaining L-1 visas for their international managers and executive employees. Unfortunately, American courts did not accept the plaintiffs’ arguments that such a restriction constituted unlawful discrimination.
Consequently, the number of employees in an organization is a significant factor for immigration officers in deciding the organization’s ability to reach a level of corporate development where executive and senior management positions are justifiable. If a company lacks employees to perform ordinary daily tasks, it is evident that it does not genuinely require a manager for the international export department. The size of the company also becomes crucial if immigration officers begin to doubt the credibility of the applicant when reviewing the application.
Applying for a green card using an L-1 visa as a starting point for permanent residence in the United States is advantageous compared to many other immigration routes. This is because the first priority category of business immigration is reserved for “international managers” and “senior executives of companies.” The appeal of the L-1 visa primarily lies in the fact that the L-1 visa petition (I-140) and the petition for permanent resident status (I-485) can be submitted simultaneously. In July 2002, U.S.C.I.S. implemented rules for the joint filing of I-140 and I-485 applications, fully applicable to those seeking a “multinational manager” and “executive” classification. This is not the case for EB-5 investors, where simultaneous filing is not allowed. Prior to 2002, L-1 visa applicants had to wait for the approval of nonimmigrant petitions before applying for a green card. Another benefit is the absence of a waiting period for the visa. The “priority date” is the date your application is received by the Immigration Service. Typically, L-1 visa applications take about 5-6 months to process, though some delays can occur.
The family of the L-1 visa applicant, including the spouse and each child of the “multinational manager,” can and should file Forms I-485 simultaneously with the main applicant. This allows immediate filing of green card applications on Form I-485 along with the I-140 application prepared by the employer.
A significant advantage of applying simultaneously for a green card is that the applicant and all family members can obtain documents allowing re-entry into the United States after traveling abroad (advance parole). This freedom to travel during the review period for I-140 and I-485 eliminates the need to obtain entry visas from American diplomatic missions for each trip home.
Additionally, the ability to obtain an Employment Authorization Document (EAD) is a great benefit, especially for spouses of international managers who are not permitted to work in the U.S. solely based on their spouse’s L-1 visa. Theoretically, after receiving a work permit based on a green card petition, an immigrant can work at any workplace. However, it is crucial not to leave your employer as this could lead to the denial of the adjustment petition.
It is important to remember that immigration officers process I-140 and I-485 applications separately. The approval of an L-1 visa and the I-140 petition does not guarantee a positive decision on I-485. Although most of the evidence required is the same for both L-1 visa applicants and EB-1 green card applicants, when reviewing applications for permanent resident status, the Immigration Service will re-examine all evidence and conduct an interview.
Navigating the complexities of first-class EB-1 business immigration requires the assistance of a qualified lawyer experienced in preparing immigrant business petitions to achieve successful results.
