L-1 Nonimmigrant Visas for Intracompany Transfers

For businesspeople around the world seeking to establish and operate U.S. business operations, the L-1 visa has long been a popular nonimmigrant visas choice. Unlike the E nonimmigrant visas, the L-1 does not require a treaty between the United States and the applicant’s country. The L-1A visa is available to company managers and executives, while the L-1B visa is available to a company’s specialized knowledge personnel.

For managers and executives, who fall under the L-1A category, a maximum stay of seven years is authorized and there is a comparatively easy transition to lawful permanent residence for these personnel. Specialized knowledge personnel under an L-1B visa are authorized to remain up to five years. Spouses and unmarried minor children of L-1A and L-1B personnel are authorized to accompany the principal visa applicant in the L-2 category with L-2 spouses eligible for employment authorization.

Are you a startup and/or a small business? The L-1 visa is not reserved for large multinational corporations and it may be available to your startup or existing small business. The L-1 visa can also be used in some cases to establish a new business venture in the United States. The law permits businesses, including small businesses, to obtain L-1 visas for personnel to come to the United States to open a new business operation. While in most cases, the U.S. company must have staff in order to support an L-1A visa for a foreign executive or manager, the L-1 visa is not a job creation visa and there is no minimum number of U.S. personnel that a company must hire. While in these startup situations, USCIS will grant only a one-year initial visa, a three-year visa may be obtained at the end of that first year upon a showing that the startup is a real and operating business.

However, while the L visa category is intended to facilitate international business, the applicable law, regulations, and current USCIS policies create strict requirements for obtaining L status. Some of the most important requirements are:

(1) Ownership and Control

In order for personnel of a foreign company to transfer to a U.S. company in L-1 visa status, the two companies must meet specific requirements related to ownership and control. USCIS applies complex standards in this regard. Examples of where USCIS will find a qualifying relationship include corporate structures where:

• Both the U.S. and foreign entities are branch offices of the same corporation.

• The U.S. entity owns more than 50% of the foreign entity or, alternatively, the foreign entity owns more than 50% of the U.S. entity.

• Both the U.S. entity and the foreign entity are majority-owned (i.e. more than 50%) by a third company or by the same individual or group of individuals.
There are other structures that will qualify for L-1 transfers, including certain joint ventures, but careful analysis is highly recommended before beginning the L-1 process.

(2) One Year of Three Rule

In order to qualify for L-1 status, the applicant must demonstrate that during the past three years he or she completed at least one continuous year of employment outside of the U.S. with the foreign entity.

While in some cases this is a straightforward issue, in others it can be very complex. For example, USCIS takes the position that any period of time the applicant spent in the United States during the qualifying period will not count towards the one year continuous employment period. Issues also arise related to part-time employment and intervening employment with another company during the previous three years. In all cases, USCIS will require extensive documentation of the qualifying employment history and careful preparation will be essential to the success of the visa.

(3) Executive, Managerial or Specialized Knowledge Capacity

The law requires that the L-1 visa applicant must have been employed with the foreign entity in an executive, managerial or specialized knowledge capacity. Further, the applicant must be coming to the United States to fill an executive, managerial or specialized knowledge capacity position with the U.S. entity.

USCIS employs a general definition for each of these capacities with the result being a high number of denials based on a failure of the petitioning company to demonstrate that the applicant has worked and will work in an executive, manager or specialized knowledge capacity. A careful review of the applicant’s job duties with the overseas company and proposed job duties with the U.S. company is a must in order to determine whether or not the applicant will qualify for L-1A or L-1B status.

As discussed above, the L-1 visa is a highly useful visa for international businesspeople who wish to do business in the United States. However, USCIS scrutinizes L-1 visa petitions carefully and denial rates are arguably higher than any other nonimmigrant visa classification. However, with experienced legal counsel advising your company at each step of the process you will avoid the common pitfalls that lead to so many denials.

Our attorneys and staff have extensive experience with L-1 visas and stay abreast of current developments in this area. We can assist startups and small business obtain initial L-1 visas for company personnel and then advise company owners and human resources as to how to ensure continuation of that status after the first year. If you are seeking to launch a U.S. operation, we can advise you on the viability of an L-1 visa. Contact us for a consultation.