L-1 Multinational Transferee Visa Company Relationship

By Paul Szeto, Esq.

The L-1 visa category is a very popular tool for foreign companies to transfer executives and high level managers to the United States to work for an existing office or to start a new company.   One of the basic requirements of the L-1 visa is that there must be a qualifying relationship between the business entity in the United States and the foreign operation which employs the alien abroad.  The transferee must have been employed abroad by the foreign operation for at least one of the last three years in a managerial, executive, or specialized knowledge capacity.  Further, while the L-1 executive or manager is working in the United States as an L-1 visa transferee, the petitioner must continue to do business both in the United States and in at least one other country, either directly or through a parent, branch, subsidiary, or affiliate.

The petitioning company must produce documents to prove that the required corporate relationship exists between the U.S. business entity and the foreign operation.  Some business relationship is quite simple to define, while others may require extensive documentation and detailed explanation to prove. For example, when an international bank based in Taiwan is transferring a manager to work in their New York branch, the business relationship is not difficult to prove.  Corporate documents and filings with the State and Federal banking authorities can be used to prove the relationship between the branch and the parent bank in Taiwan.

The relationship between a parent entity and a subsidiary can be tricky.  The regulations define a parent as a legal entity that owns, directly or indirectly, more than half of the ownership interests of another business entity, and controls that entity.   In the situation where the parent owns exactly 50% of the other entity in a 50-50 joint venture and has equal control and veto power over the entity, then the required parent-subsidiary relationship also exists.  Finally, even if the parent entity owns less than half of the subsidiary entity, the relationship is still valid to support an L-1 petition if it can be proved that in fact the parent controls the subsidiary entity.

Sometimes, a transferee did not work for the parent or subsidiary, but worked for “sister companies” that are related in some way to the U.S. company.  The regulations also allow affiliated companies or “affiliates” to petition and transfer employees under the  L-1 visa program.  The regulations define “affiliates” in three ways.  First, they can be subsidiaries, both of which are owned and controlled by the same parent or individual.  In this situation, a Chinese parent company can have two subsidiaries, one in Hong Kong and the other in the United States.  If an employee was working in Hong Kong as an executive during the past three years, the company can transfer him or her to the U.S. subsidiary by means of the L-1 visa. Secondly, these legal entities can be owned and controlled by the same group of individuals, each individual owning and controlling approximately the same number of shares or proportion of each entity.  For example, a group of investors who own a company in England and also another one in the United States, and decided to transfer an executive from England to America. As long as their ownership shares are approximately in the same proportion in both companies, an L-1 petition can be filed to transfer the executive to the United States. 

Finally, partnerships in the United States and their international counterparts organized to provide accounting services along with managerial and/or consulting services that market their accounting services under an internationally recognized name under an agreement with a worldwide coordinating organization are also considered valid affiliate for the purposes of the L-1 visa. These are typically big accounting firms providing accounting and consulting services to clients.  Many of them are also eligible to file blanket L-1 petitions for multiple transferee employees.

In sum, in order for an L-1 visa petition to be approved, the petitioner must prove that a valid corporate relationship exists between the U.S. company and the foreign operation.  Documents such as articles of incorporation, stock certificates, bylaws, minutes of shareholder meetings, corporate tax returns, etc., can be used to prove the existence of the relationship.

(Paul Szeto, an immigration lawyer and former INS attorney, regularly writes on immigration issues. His contact info: 732-632-9888, info@szetolaw.com)