The L-1 is a non-immigrant visa which allows foreign companies to temporarily transfer executives and managers (L-1A) and technical personnel having “specialized knowledge” (L-1B) to affiliates or subsidiaries in the United States. Executives and managers who qualify for L-1A status are also in a position to qualify for permanent residence under the employment-based first preference immigrant category.
In order to qualify for the visa category, the foreign-based employee must establish that he or she has worked in an executive, managerial or specialized knowledge capacity abroad for a continuous period of one (1) year within the last three (3) years. The foreign-based employee must also document that he or she is entering the United States to work for the same company or a parent, affiliate or subsidiary thereof, in an executive, managerial or specialized knowledge capacity. The following definitions are therefore relevant:
The following definitions are relevant in assessing the required capacity of the transferred:
- The definition of “executive capacity” requires the executive to primarily direct the management of the organization or a major component or function thereof, establish goals or policies relating thereto; exercise wide latitude in discretionary decision-making; generally supervise the work of other employees in supervisory or managerial positions; and receive only general supervision from higher level executives, the board of directors or the shareholders of the company
- The definition of “managerial capacity” requires the manager to primarily direct the organization, a recognized department or subdivision thereof or an essential function of the organization, control the work of other professional, supervisory, or managerial employees, exercise authority to hire and fire personnel; and exercise discretionary authority over day-to-day operations.
- “Specialized knowledge” is defined as special knowledge possessed by an individual regarding 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, the knowledge is valuable to the employer’s knowledge of foreign operating conditions, the individual has been employed as key personnel abroad with significant assignment completed to enhance the employer’s productivity, competitiveness, image or financial positions, and possesses knowledge that’s can be gained only through extensive prior experience with that employer.
While staffing levels of the business are not as crucial in determining whether or not an individual is acting in an executive or managerial capacity, it is nevertheless a factor in such a determination. However, the Immigration and Nationality Act (“INA”) specifically states that if staffing levels are used as a factor, the reasonable needs of the organization, component or function in light of the overall purpose and stage of development of the organization, component or function must be taken into account.
A company must establish that it has reached a stage of organizational development and is of such complexity that it is realistic that the individual seeking transfer is primarily engaged in executive or managerial duties. The small quantity of case law that exists suggests that the use of independent contractors performing necessary functions for the small company may be considered in making such a determination. For example, information concerning the use of accountants, brokers, commission sales persons and other contractors not performing auxiliary or clerical duties may be relevant.
In addition to the requirement that the individual seeking an intracompany transfer transfer be currently employed in a managerial, executive or specialized knowledge capacity, the INA requires that the individual to have been employed aboard in a full-time capacity for the foreign parent, branch, affiliate or subsidiary for at least one (1) year within the previous three (3) years. (Part-time work may be considered but it must add up to one (1) year of full-time work). Working as an independent contractor for the foreign affiliate or subsidiary is generally insufficient for the purpose of satisfying the one (1) year employment requirement. The relationship between the foreign entity and the individual must be one of employer-employee and such relationship may be established and documented without formal payroll records in certain cases. The U.S. Citizenship and Immigration Services (USCIS) will look at the degree of control that the company has over the foreign worker to determine if he or she is really a de facto employee or an independent contractor.
The following definitions are relevant in assessing the required qualifying relationship between the foreign and the domestic entities.
- “Parent” is defined as a firm, corporation, or other legal entity which has subsidiaries.
- “Branch” is defined as an operating division or office of the same organization housed in a different location.
- “Subsidiary” is defined as a firm, corporation or other legal entity of which a parent owns, directly or indirectly or indirectly, 50% of a 50-50 joint venture and has equal control and veto power over the entity; or owns, directly or indirectly, less than half of the entity, but in fact controls the entity.
- “Affiliate” is defined as:
- one of two subsidiaries both of which are owned by the same parent or individual, or
- one of two legal entities owned and controlled by the same group of individuals, each individual owning and controlling approximately the same share or proportion of each entity, or
- certain international accounting firms.
The USCIS defines the term “qualifying organization” as a U.S. or foreign entity which meets the requirements of a parent, branch, subsidiary, or affiliate and is or will be doing business “as an employer in the United States and at least one other country for the duration of the foreign based employee’s stay in the United States as an intra-company transferee directly or through a parent, branch, subsidiary, or affiliate, and otherwise meets the [L-1] requirements”. This definition requires that the U.S. employer continue to have a related entity doing business abroad. That entity, however, need not be the foreign-based employee’s former employer. There is nothing in the definition to prevent the dissolution or sale of the former employer so long as another affiliate continues to do business abroad.
Even where a foreign company does not have a pre-existing subsidiary or affiliate operating in the United States, it is possible for individuals to be transferred to the United States under L-1 status for the purpose of opening a new office (a “new office” is one that has been in existence for less than one (1) year. However, special federal regulations will apply to persons being transferred as new office transferee. The most significant effect of these regulations limit the initial approval period to one (1) year, after which additional evidence will have to be filed to document the U.S. office’s need for a managerial or executive employee at the time of extending the one (1) year L-1 status.
L-1A status is granted initially for three (3) years with two (2) extensions of two (2) years permitted except for a "new office" L-1 which is granted for only one (1) year initially. L-1B status is granted initially for three (3) years with only one extension of two (2) years permitted. After a stay of seven (7) years in the case of L-1A and five (5) years in the case of L-1B, the foreign worker must live outside the United States for one (1) year before becoming eligible for L status again. However, there is an exception to the total period of authorized stay for “intermittent” L-1 stay which allows the L-1 status to be approved indefinitely if the intermittent stays can be well documented.
Once a transfer is made in the appropriate capacity, the employee is not required to perform full-time services in the United States but must only dedicate a significant portion of his/her time on a regular and systematic basis. In addition, the payment of the employee’s salary may be issued by either the foreign or the United States company.
NAFTA permits Canadian citizens to directly apply for L-1 status at a port of entry as an alternative to filing their petition in the United States. This option is not available to Mexican applicants who must initiate the application with a regional service center of the U.S. Citizenship and Immigration Services (USCIS). Currently, all Form I-129L petitions on behalf of Mexican beneficiaries are filed with the Vermont Service Center.
The L visa status allows for dual-intent in that an applicant may receive the L-1 status but still pursue his/her permanent residency without being required to maintain a foreign residence.