For L-1(A) Visas, How Can Foreigners Structure Their Deal Properly to Ensure They Fulfill the Qualifying Relationship Requirement?

The L-1(A) visa is a powerful tool for multinational companies seeking to transfer executives or managers from their foreign offices to the United States (U.S.). This non-immigrant visa category is designed to facilitate intracompany transferees, and its key requirements are outlined in 8 CFR § 214.2(l). These include:

• Qualifying Relationship: The U.S. and foreign entities must have a qualifying relationship (e.g., parent-subsidiary, affiliate, or branch).
• Executive/Managerial Capacity: The beneficiary must be employed in an executive or managerial capacity in the U.S. company.
• Prior Employment: The beneficiary must have worked for the foreign entity for at least one continuous year within the last three years.

One of the most critical aspects of the L-1(A) visa application process is demonstrating the qualifying relationship between the foreign entity and the U.S. entity. This relationship is the foundation of the visa’s eligibility requirements, and failing to structure it properly can lead to delays, denials, or even long-term immigration complications.

Structuring Business Entities to Meet L-1(A) Visa Requirements

To ensure compliance with the qualifying relationship requirement, companies should consider the following strategies:

1. Establish Clear Ownership and Control: Document ownership percentages and control mechanisms between the foreign and U.S. entities to demonstrate their legal relationship.
2. Provide Corporate Evidence: This includes articles of incorporation, bylaws, operating agreements, and shareholder agreements that consistently reflect ownership and control structures.
3. Secure Physical and Financial Presence: Ensure that the U.S. entity has a legitimate business presence, including office leases and financial records demonstrating operational capability.

Real-World Example: A Parent-Subsidiary Relationship

To better understand how the qualifying relationship requirement works in practice, let’s examine a hypothetical case that mirrors a real-world scenario.

A U.S.-based company established a foreign subsidiary in Asia and sought to transfer an executive to the U.S. headquarters. The corporate structure was carefully designed to meet USCIS regulations by:

1. Establishing the U.S. entity as the parent company and the foreign company as its subsidiary.
2. Providing corporate documentation, including certificates of incorporation and organizational charts, to prove the parent-subsidiary relationship.
3. Ensuring that the executive had worked for the foreign subsidiary for over one year in an executive capacity, supported by employment verification letters and detailed job descriptions.

Since the U.S. parent company was recently established, additional documentation was required to demonstrate a physical office for the U.S. company. This included:

• A business plan detailing the executive’s role.
• The U.S.-based entity’s operational roadmap.
• Financial records demonstrating the company’s ability to support the executive’s position and oversee global operations.

Common Pitfalls in Structuring the Qualifying Relationship

Many L-1(A) visa applications are denied because the qualifying relationship is not properly established. Here are some common mistakes to avoid:

1. Lack of Clear Ownership or Control: USCIS requires clear evidence that the U.S. and foreign entities are owned and controlled by the same individuals or entities. If ownership is fragmented or unclear, it can raise red flags.
2. Insufficient Documentation: The burden of proof lies with the applicant to demonstrate the qualifying relationship. Missing corporate records, unclear organizational charts, or incomplete financial statements can lead to a denial.
3. Misalignment Between Entities: The U.S. and foreign entities must be engaged in related business activities. If the nature of their operations is too dissimilar, USCIS may question whether the transfer is legitimate.

How to Structure Your Petition to Meet the Qualifying Relationship Requirement

To ensure compliance with the qualifying relationship requirement, follow these steps:

1. Establish Clear Ownership and Control:
   • Use shareholder agreements, stock certificates, corporate bylaws, and organizational charts to document ownership structures.
2. Provide Comprehensive Documentation:
   • Submit articles of incorporation for both entities, proof of registration with government authorities, financial statements, tax returns, and contracts or agreements between the entities.
3. Demonstrate Financial Stability:
   • Show that the foreign entity has the financial resources to support the U.S. operations through bank statements, investment agreements, and business plans outlining the U.S. entity’s growth strategy.
4. Align Business Activities:
   • Ensure that the U.S. and foreign entities are engaged in related business activities. Provide product or service descriptions, marketing materials, and evidence of joint projects or collaborations.
5. Prepare a Detailed Organizational Chart:
   • Include the ownership structure of both entities, the executive or manager’s position within the organization, and the reporting relationships between the U.S. and foreign entities.

Conclusion

The qualifying relationship requirement is a cornerstone of the L-1(A) visa application process. By carefully structuring the relationship between the U.S. and foreign entities, providing comprehensive documentation, and seeking legal guidance, foreign nationals and their employers can strengthen their case and increase their chances of approval.

The hypothetical example of a parent-subsidiary relationship illustrates how a well-documented corporate structure can satisfy USCIS requirements. Whether you’re transferring an executive to an established U.S. office or setting up a new operation, it’s essential to approach the process with diligence and attention to detail.

By doing so, you can ensure compliance with USCIS requirements and pave the way for a successful L-1(A) visa application.