L-1 Visa – Intracompany Transferee

Certain Multinational Executives and Managers

More on this concept can be viewed in the section on “Intracompany Transferees – L-1 Visas”.

It is a very important category for qualifying executives and managers of multinational corporations for a green card, because you do not need a Labor Certification. In other words, you need not show that there is a shortage of U.S. executives or managers who can do that job.

Also see “Conversion to Permanent Residence”.

– Main Employment Page

Summary

This is an extremely important visa. It is through this visa that small or large businesses from foreign countries can start a business in the U.S.A.

Unlike the Treaty Investor E-2 visa, this visa is not limited to certain countries, and there is no requirement that the investment be substantial.

Through this visa, foreign businesses can transfer managers, executives or people with specialized skills to a new business in the U.S.A. for periods of up to seven years.

NOTE: The words “Executive, Manager and Persons with Specialized Skills” have been defined by the Immigration laws and may not be given their usual definitions. Generally speaking to be an Executive or Manager” it is necessary to show that the the person spent the majority of his/her time managing other employees.

There is a requirement that the “Executive, Manager or person with specialized skills” worked in the foreign business entity for one year in the last 3 years.

Executives and Managers may be granted up to 7 years residency to perform services for the U.S. Business, while people with specialized skills are limited to a total of 5 years.

When we deal with the L-1 visa, we have the concept of “dual intent”.  The company transferring the executive may not be 100% certain whether the alien will leave the U.S.A. at the end of the visa or whether they will want the executive or manager to stay on in the United States permanently.  The Immigration Service allows this dual intent for L-1 visas. 

Accordingly, the L-1 visa can lead to permanent residence, for managers and executives. 

It is possible to “convert” the L-1 visa, which has a limit of seven years to permanent residence without having to prove that there are no American citizens who can do the job of that executive or manager. 

Special Notes on The L-1 VISA

1. There is no minimum dollar amount investment required to obtain this visa. It is necessary to show that the U.S. business entity has sufficient resources within the U.S. to remunerate the intra company transferee.  The U.S. business must have premises secured through purchase or lease to house its business activities 
2. There is no need to be involved in international trade. 
3. The foreign and U.S. businesses do not have to be in the same type of business. 

A business entity (corporation, partnership or sole proprietor) in a foreign country can transfer an executive, manager or someone with specialized knowledge to the U.S.-based branch, subsidiary or affiliate.

Relationship Between Foreign Businesses and U.S. Businesses 

The Immigration Act requires the U.S. business entity to be the same employer, or a subsidiary or an affiliate of the foreign business. 

The business entities do not have to be corporations so partnerships or even sole proprietorships would qualify. 

Same Employer

Here the foreign corporation would have a branch office in the U.S.A. which is qualified to do business in the U.S.A. 

Subsidiary

The U.S. corporation is the parent or subsidiary of the foreign corporation: 

1. One corporation owns at least 50% of the other corporation and controls it. 
2. One company owns less than 50% of another company but controls it (e.g. a public corporation). 

Affiliate

1. Two entities are owned and controlled by the same parent or individual 
2. The two entities are “owned and controlled by the same group of individuals, each individual owning and controlling approximately the same share or proportion of each entity.” 

New Office in the U.S.A. 

When a transferee is transferred to the United States to open or be employed in a new office, the petition will be approved for a period not to exceed one year.  At the end of that year, it will be necessary to prove that the U.S. operation is actually doing business in the United States and the transferee is performing “Executive,Managerial or specialized skills”, in order to extend the duration of the transferee’s stay.

Executives and Managers (L-1A VISA)

The foreign corporation must be a trading/operating corporation, not merely and investment corporation.

An example of an investment corporation is a property owning corporation which merely owns a few rental properties and which does not require daily work on the part of employees. On the other hand, a development corporation that has developed many homes, buildings, commercial properties over a period of time and is constantly purchasing and developing property is a trading corporation. 

The foreign corporation has employed the manager/executive to be transferred for at least one year in the past three years and the manager/executive spends most of his/her time managing other workers and making policy decisions.

To be an “executive/manager”, a person must not be doing the work himself/herself, but must be managing other workers. 

It is unimportant what the title of the person is. What is critical are his/her duties and responsibilities within the corporation. So if a president of a corporation has three sales people working for him/her who make small commissions, that president would not be regarded as an executive or manager.

The Immigration Service in deciding whether a person is an “executive/manager” does not state how many workers must be under the executive/manager.

They consider the various workers:

job duties,

wages;  

qualifications (educational and experience); and 

the number of workers who are responsible to the executive/manager.

The Immigration also considers the executive or manager’s: 

A. Title;

B. Job Duties and Responsibilities; 

C. Education and experience; and

D. Salary.

The Immigration Service looks at both the manager/executive AND the workers he/she manages.

Many experienced Immigration Attorneys are faced with border line cases, where even they do not know whether their client’s case will qualify. For this reason it is impossible for an attorney to tell you with absolute certainty how many workers must be employed in a foreign corporation or in the case of L-1 visa renewals, how many workers must be employed in the U.S. corporation.

The best that can be done is to provide extreme examples to show what will work, what will not work, and what may work.

Example A– A person owns a janitorial business and has 20 workers working for her. 

Title: President

Duties: Buys all cleaning equipment and supplies; answers phone; calls building managers to sell the janitorial services; goes to building managers to sign contract; answers complaints; does billing and banking; attends to accounts payable and receivable and payroll; takes workers to buildings at 5pm each night and drives each team from one building to the next until 10pm when services are complete; does quality control for each building.

Salary: $35,000 per year

Is she an executive/manager?

While she is in charge of the entire corporation, she is doing every job in it, except the cleaning! Her salary is not high, the duties of the workers are extremely basic and their wages are very low. The workers have not completed high school and have no other experience except for janitorial services.

It is questionable whether she would be regarded as an executive or manager by the Immigration Service. (However, see later under “Functional Manager”)

Example B – Robotic Research and Development Corporation that has a President with a PhD degree in Mechanical Engineering, and a staff of 5 workers. Each of the workers has a PhD in different areas of engineering or computer science. Each worker is totally responsible for their area of the project and only report to the President. They all have the title of manager.

The President earns $250,000 per year and the workers earn between $95,000-$160,000 per year each.

In this example the salaries are extremely high , the duties are very sophisticated and each department manager is well educated with extensive experience

In this case, the President would probably be described as an executive because most of his work is in directing the project with sophisticated employees.

Functional Manager

There are special circumstances where an executive or manager can qualify even though they are not directly many workers.

To get a better understanding of who would qualify as a functional manager, let’s look at a situation where there is a Finance Director of a large corporation, who has a financial manager and two extremely qualified bookkeepers working under him. The corporation uses a sophisticated, software system to perform many accounting functions. The Finance Director receives $150,000.00 per year, his financial manager receives $90,000.00 per year, and the bookkeepers each receive $70,000.00 per year. 

The Finance Director makes corporate financial policy decisions and acts independently in his decisions. He is only responsible to the President and the Board of Directors.

If the Finance Director makes far reaching corporate policy decisions he would most likely be designated as a functional manager, even though there are only three other people in his department.

The President of the janitorial corporation in the above example may qualify as a Functional Manager because she makes far reaching policy decisions, but the Immigration Service may want to know WHO will run the foreign business if she is transferred to the U.S.A.? Also, they may regard her only as being a first line supervisor. 

[Remember the foreign corporation must continue to operate after the manager is transferred to the U.S.A.] 

Note: The Immigration Service has over the years blurred the test for “executive/manager” and “functional manager” so it’s far safer to apply the “number of workers and their duties” test when considering transferring a manager. The Functional Manager test is not so clear these days.

Let’s look at what the Immigration Service requires for a “Manager”

Ideally the Immigration Service want to see three tiers of employment for a person to be classified as a manager.

Example 1 

The Immigration Service wants to see a hierarchical chart where there are three levels of workers. 

Let’s take a look at the following hierarchical chart and consider whether the Sales/Marketing Director could be transferred.

Here the Sales/Marketing Director manages two different departments: 

1. Marketing:
   Workers:
   1. Marketing manager – employee
   2. Printer – independent contractor
   3. Graphic artist – independent contractor
   4. Copy writer – independent contractor
   5. Web Master – independent contractor
   6. Advertising Agency – independent contractor
   7. Fulfillment House to send out direct mail letters – independent contractors
   8. Affiliate Manager who has 3000 affiliate corporations selling products on commission through the internet for the company – independent contractor. 
      (Note: There is only one full time employee)
2. Sales:
   Workers:

1. Sales Manager – employee
2. Thirty-five commission agents – independent contractors
3. Dispatch- Dispatch Manager with four other workers who are employees

In this situation the Marketing Director only has two full time employees in the corporation who are responsible to him: the Marketing Manager and the Sales Manager. How can the marketing manager possibly be “manager?” Initially the Immigration Service did not consider independent contractors as “workers,” so there was no way that the Marketing Director would have been regarded as a manager with only two workers being responsible to her.  

Today the Immigration Service is slowly warming to the idea of independent contractors. A lot depends on how much contact the manager has with these contractors; how much each is paid for their services; how much money the contractors bring into the corporation. 

The fact is that a manager can be very involved working with contractors, who have many workers doing the job for the contractor. 

Renewal for L-1 Visa 

A manager may be transferred to a new business in the U.S.A. that has not started doing business. 

In this case the manager will have one year to develop the U.S.A. Corporation into a situation where the manager will qualify to be a “manager” according to the Immigration Service, when the L-1 is renewed towards the end of the first year. The corporation will have to explain its structure of workers, their duties and salaries and how the manager manages them. 

Note: While it is relatively easy to get the one year for a transfer IF THE MANAGER OR EXECUTIVE IS BEING TRANSFERRED FROM A FOREIGN CORPORATION WITH SUFFICIENT WORKERS, the renewal can present a problem if there are not enough workers in the U.S.A. business.  

“Conversion” from L-1 Visa to Green Card 

There is no official conversion from L-1 to a green card. 

However: 

1. if the manager in the U.S. qualifies as a manager;
2. the U.S.A corporation is a viable business;
3. the foreign business continues to operate and have the same relationship to the USA corporation, then the corporation may decide to keep the transferred manager in the U.S.A. permanently.

– Main Visa Page