The L-1 Visa for Intracompany Transferees
By Momal S.Iqbal
Los Angeles, CA
This article provides general information regarding the L-1 visa category that allows international companies with offices in the US and abroad to temporarily transfer foreign national executives, managers, and those with “specialized knowledge” to the US as "intracompany transferees." Executives and managers may stay for a maximum of seven years; those with specialized knowledge may stay for up to five years.
The individual coming to the US must have worked for the company abroad, or at a foreign subsidiary, branch, or affiliated company, for one continuous year in the preceding three years. In addition, the foreign company must continue to conduct business during the entire period of time the transferee is in the US.
A "subsidiary" relationship will be found if any of the following circumstances exist: (1) one company owns 50 percent or more of the other and controls the other company; (2) one company owns 50 percent or more of a 50/50 joint venture and has equal control and veto power; or (3) one company owns less than 50 percent of the other, but has actual control of it. An "affiliate" relationship exists if the two entities are owned and controlled by a third-party parent company, individual, or the same group of individuals (each of whom owns and controls the same proportion of each entity). A “branch” is an operating division or office of the same organization housed in a different location. When establishing a US company, please ensure that the corporate attorney understands that one of the above-relationships must exist as these terms are defined by immigration regulations, and not by their generic meaning.
Employees who qualify for L-1 status include executives, managers, and individuals with “specialized knowledge” of the company’s operations. Each is described below.
"Executives" are persons whose duties primarily include: directing the management of the organization or a major component or function in the organization; establishing goals and policies; exercising wide latitude of discretionary decision-making authority; and receiving only general supervision from higher executives, the board of directors, or the stockholders.
"Managers" are those persons whose duties primarily relate to: managing the organization, or a department, component, or function of the organization; supervising and controlling the work of other professional, supervisory or managerial employees, or managing an essential function within the organization; exercising authority to hire and fire or recommend those actions, or functioning at a high level within the corporate hierarchy; and exercising discretion over day-to-day operations of the organization or function. Note that the definition of "manager" may include the management of essential functions within the organization or department of the organization, as opposed to solely the management of personnel.
Typically, the executive or manager must “be primarily engaged in a managerial (or executive) function,” and not in performing day-to-day administrative or operational activities that are not managerial or executive in nature. Please note that the government is permitted to consider the number of employees in the petitioning US company, as well as the reasonable needs of the organization, in light of the overall purpose and stage of the development of the organization to determine if a position qualifies as a managerial or executive position, or if there is an actual need for the transferee.
“Specialized knowledge” refers to knowledge of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures. An individual in a position involving specialized knowledge may not be stationed primarily at the worksite of another employer if the individual will be controlled and supervised principally by the unaffiliated employer or the individual is placed there as part of an arrangement to provide labor for hire for the unaffiliated employer. It is important to note, however, that there are continuing concerns of perceived abuse of the L-1B category, such that USCIS adjudicators may gather information on the total number of L-1B petitions filed by a particular petitioner and may deny an individual L-1B petition after commenting on the volume of specialized workers.
If the beneficiary of the L-1 petition is an owner or major stockholder of the company, the petition must include evidence that the beneficiary’s services will be for a temporary period and the individual will transfer back abroad upon completion of the temporary stay. A statement to this effect should be made in the company’s letter in support of the petition.
New Office: Where the US company will be a "start-up" entity or new office (operating for less than one year in the US ), the petition validity and duration of stay that initially will be granted to a transferee is only one year. There are different requirements for a new office L-1 petition that will be discussed in more detail in a later article.
Green Card: After the US business has been operating for more than one year, it is possible to file a petition for permanent resident status for executives or managers who served in an executive or managerial position abroad. Where a company is a "start-up" or new office, we generally recommend that an L-1 extension first be approved, and thereafter a permanent residency petition filed.
As a general matter, the US Citizenship and Immigration Services (“USCIS”) looks much more skeptically at cases filed by companieswith a gross annual income of less than $10 million, 25 or fewer employees, and that are established within last 10 years, resulting in a significant increase in the requests for evidence on L-1 petitions, particularly in the “specialized knowledge” category.
Although requests for evidence have dramatically increased in this non‑immigrant category, there are many benefits to the L-1 non-immigrant classification. Unlike the H-1B non‑immigrant classification, there is no quota on the number of L-1s which may be issued every year, therefore an L-1 can be obtained any time of the year. Premium processing, in which the petition will be processed within 15 calendar days, is also available for this type of non-immigrant classification. In addition, L-1 does not require any specific educational background. L-1 is also considered a "dual intent" non‑immigrant classification, meaning that you may have an immigrant visa petition (green card) pending, and still have no problem in applying for L-1 extensions. Another advantage is that employers on a tight budget can also be assured that they are not required to pay the worker a specific prevailing wage.
After receiving approval of the L-1 petition, the transferee may take the approval notice to a US Consulate or Embassy to obtain an L-1 visa to enter the US Immediate family members (spouse and children under the age of 21) may obtain L-2 visas from the Consulate/Embassy at the same time, or anytime thereafter. After entering the US , the transferees spouse may then apply for work authorization for a period of up to two years, extendable in two-year increments.
( Momal S. Iqbal has been practicing immigration law since 2008. Prior to becoming a private immigration attorney, she served as an Assistant Chief Counsel for the US Department of Homeland Security, Immigration and Customs Enforcement)