Turmoil in the global economy creates a unique  opportunity for U.S. businesses.  The L-1 intracompany tranferee visa offers our Texas clients a vehicle to expand both domestically and internationally.  A review of the basic of the statutory definitions and requirements for an L-1 visa reveals a fresh perspective for counsel to serve client needs.

 

Description of The Parties

• Petitioner is the name for the U.S. employer which submits the visa petition form for the “alien” which is the employee.
• Beneficiary is the term for the “alien” employee who will work for the Petitioner incidental to L-1 status.
• “Alien means means any person not a citizen or national of the United States”2.
• Government Agencies – The principal U.S. government agencies involved in the L-1 visa process related to L-1 visas are as follows: U.S. Citizenship and Immigration Services which adjudicates petitions filed at regional USCIS service centers; U.S. Customs and Border Protection which adjudicates petitions filed only by Canadian citizens who apply at a Port of Entry to the U.S.; and the U.S. Department of State which interviews the alien when he or she applies for the L-1 visa at a U.S. consulate or embassy outside the U.S.
• L-1 status versus L-1 visa – An alien may hold L-1 status by virtue of (i) admission to the U.S. at the time of entry on an L-1 visa; or (ii) change from one temporary visa category to L-1 status.  The L-1 visa is the document which is physically inserted in an alien’s passport after an interview at a U.S. consulate and approval by a U.S. consular officer.

 

Definitions and Basic Requirements for Individual L-1 visas3

• Intracompany transferee means an alien who, within three years preceding the time of his or her application for admission into the United States, has been employed abroad continuously for one year by a firm or corporation or other legal entity or parent, branch, affiliate, or subsidiary thereof, and who seeks to enter the United States temporarily in order to render his or her services to a branch of the same employer or a parent, affiliate, or subsidiary thereof in a capacity that is managerial, executive, or involves specialized knowledge.
• Managerial capacity means an assignment within an organization in which the employee primarily: (1) Manages the organization, or a department, subdivision, function, or component of the organization; (2) Supervises and controls the work of other supervisory, professional, or managerial employees, or manages an essential function within the organization, or a department or subdivision of the organization; (3) Has the authority to hire and fire or recommend those as well as other personnel actions (such as promotion and leave authorization) if another employee or other employees are directly supervised; if no other employee is directly supervised, functions at a senior level within the organizational hierarchy or with respect to the function managed; and (4) Exercises discretion over the day-to-day operations of the activity or function for which the employee has authority.  A first-line supervisor is not considered to be acting in a managerial capacity merely by virtue of the supervisor's supervisory duties unless the employees supervised are professional.
• Specialized knowledge means special knowledge possessed by an individual 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.
• Specialized knowledge professional means an individual who has specialized knowledge as defined in paragraph (l)(1)(ii)(D) of this section and is a member of the professions as defined in section 101(a)(32) of the Immigration and Nationality Act.
• New office means an organization which has been doing business in the United States through a parent, branch, affiliate, or subsidiary for less than one year.
• Qualifying organization means a United States or foreign firm, corporation, or other legal entity which: (1) Meets exactly one of the qualifying relationships specified in the definitions of a parent, branch, affiliate or subsidiary; (2) Is or will be doing business (engaging in international trade is not required) as an employer in the United States and in at least one other country directly or through a parent, branch, affiliate, or subsidiary for the duration of the alien's stay in the United States as an intracompany transferee; and (3) Otherwise meets the requirements of section 101(a)(15)(L) of the Act.
• Doing business means the regular, systematic, and continuous provision of goods and/or services by a qualifying organization and does not include the mere presence of an agent or office of the qualifying organization in the United States and abroad.
• Affiliate means (1) One of two subsidiaries both of which are owned and controlled by the same parent or individual, or (2) 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 (3) In the case of a partnership that is organized in the United States to provide accounting services along with managerial and/or consulting services and that markets its accounting services under an internationally recognized name under an agreement with a worldwide coordinating organization that is owned and controlled by the member accounting firms, a partnership (or similar organization) that is organized outside the United States to provide accounting services shall be considered to be an affiliate of the United States partnership if it markets its accounting services under the same internationally recognized name under the agreement with the worldwide coordinating organization of which the United States partnership is also a member.
• The L-1A visa is issued to an alien who qualifies for an L-1 visa as a manager or executive.
• The L-1B visa is issued to an alien who qualifies for an L-1 visa as a specialized knowledge employee or a specialized knowledge professional employee.
• The L-2 visa is issued to the spouse or child (under 21) of an L-1 alien.

 

Options

Inbound U.S. Investment

• The current recession has decreased the market value of companies which are attractive to investors abroad who desire to establish and/or expand U.S. operations.
• In many circumstances investors transfer key personnel to the U.S. who they know and trust from prior experience in the home country.
• In small to medium enterprises (SMEs) an alien who has a financial stake in the non U.S. and/or U.S. company has a vested interest in the future success of the U.S. enterprise.  More often than not, such persons also have discretionary authority to pursue actions on a timely basis without the need to seek approval from the home office.

 

Joint Ventures in the U.S. and/or abroad

• Under the L regulations, a 50-50 joint venture is considered a subsidiary.  The key issue from the immigration law perspective is control. 
• In a JV the principal issue is whether there is a qualifying relationship between the U.S. and non-U.S. entity.  Even if an entity owns less than 50% of the JV, it still may be possible to qualify for L-1 status.  For example, an owner with a minority interest arguably can control the business where it provides all the capital and the majority owner provides only labor.

 

Expansion Abroad.

• Many U.S. based enterprises have established operations outside the country to follow customers, expand markets and compete globally.  Over time there can be added value to the U.S. employer to transfer personel from overseas to gain expertise from the U.S. market for a limited period of time (up to 7 years for an L-1 executive or manager and 5 years for specialized knowledge) and then to return to share information in the international market.
• Because the L-1 visa is company specific, an alien who transfers to the U.S. cannot work for an unrelated employer on an L-1 visa.  This restriction may limit the ability of competitors to hire away key employees in the U.S. market.
• Acquisitions outside the U.S. may be driven by the need to aquire skilled employees.  The L-1 option can allow U.S. entities a new talent pool.  The demand for engineering talent has been particularly acute in the global energy business where companies with international operations have gained a competitive advantage through access to additional skilled workers.

 

The Process

• An employer can apply up to six months prior to the alien’s start date.
• For a new transfer the employer submits Form I-129 with the USCIS regional service center which has jurisdiction over where the employee will work, supporting documents and the filing fees of $320 and a $500 fraud fee4.  In the case of Canadian citizens, an alien applies at the Port of Entry into the U.S. or a Pre-flight inspection at the aiport in Canada.
• The time to adjudicate the The USCIS will adjudicate the petition withI-129 varies from 60 days to 120 plus.  It is possible to file an additional Form I-907 Request for Premium Processing and pay $1000 fee and receive a decision – approval, denial, or request for additional evidence with 15 days.
• Under certain circumstances the alien can “change status” and begin to work for the employer after approval by the USCIS.  Other times, the alient must apply for the visa with the U.S. Department of State at a consulate which has jurisdiction over where the alien resides.
• Practice Pointer – There can be delays in the scheduling and issuance of an L-1 visa depending upon which consulate the alien applies, the current demand for appointments, time of year and prospective job duties.  It is advisable to determine local procedures, processing times and the possibility for security clearance issues.  For example an alien who will work in a field where the technolody has a “dual use” in a civilian or military context such as nuclear physics may find that he or she will be denied issuance of the visa.
• Duration – The L-1 visa may be issued initially for up to 3 years for a company that has been doing business for at least 1 year.  Extensions may be granted in 2 year increments, for a maximum of 7 years for managers and executifves and 5 years for “specialized knowledge” employees.
• “New Office” L-1 – In this case the USCIS will authorize only one year.  There are special requirements for the extension of a “New Office” which must be considered from the outset to maximize the probabilities the USCIS may approve an extension.5
• Practice Pointer – It is advisable to plan ahead prior to the submission of the initial L-1 and consider what other visa options may exist for the employer in the event the USCIS denies the “New Office” extension because the viability of the U.S. entity may be threatened if the alien cannot continue to work in the U.S.  Such options may include an E, H-1B or O visas.  

 

L-1 blanket

• This procedure is distinct from the individual L-1 visa.
• It allows the U.S. company and some or all of its parent, branches, subsidiaries, and affiliates to qualify for L blanket status if (i) the entities are engaged in commercial trade or services; (ii) the U.S. company has an office in the U.S. has been doing business for one year or more; (iii) the U.S. company has three or more domestic and foreign branches, subsidiaries, or affiliates; and (iv) the U.S. company and the other qualifying organizations have obtained approval of petitions for at least ten “L” managers, executives, or specialized knowledge professionals during the previous 12 months; or have U.S. subsidiaries or affiliates with combined annual sales of at least $25 million; or have a U.S. work force of at least 1,000 employees.
• The U.S. company submits Form I-129 with supporting documents to the USCIS Vermont Service Center.  The initial approval is issued for 3 years which includes a list of the qualifying entities.  In order to extend the L blanket indefinitely, the U.S. company must file a new Form I-129 with the USCIS and a report of L visa admissions during the preceding three years.
• Once the USCIS approves the L blanket, the alien applies directly for the L-1 visa at the U.S. consulate which has jurisdiction over where he/she resides.  Only “specialized knowledge professionals” may qualify under the L blanket.  Such persons must be a “professional” as defined in the INA, such as an engineer or accountant. Advantages – (i) The process saves time and money.  The alien applies directly for the L-1 visa at the U.S. consulate which has jurisdiction over where he/she resides and alleviates the need to file a petition with the USCIS.  The Company will save up to $1320 on each L blanket visa because certain USCIS filing fees and not required.6; (ii) The alien may transfer to any other U.S. organization listed on the approved blanket petition during his or her authorized L-1 stay "without referral" to the USCIS if the alien’s duties will remain "virtually the same" at the new organization.7

 

L-1 Amended Petition

• The U.S. company must file an amended petition with USCIS where there are changes in the approved relationships, additional qualifying organizations and any information which would affect the alien’s employment.
• Changes requiring amended petition include (1) a significant change in the alien’s  duties (e.g., specialized knowledge to managerial/executive); and (2) transfer from one company to another in same organization where the alien becomes employee of new company.8
• Practice Pointer – Where there uncertainty as to whether there is in fact a material change, it may be advisable to submit an amendment out of the abundance of caution to avoid future problems such as the alien’s inability to qualify for lawful permanent residence, aka “green card” status.

 

Additional Practice Pointers

• Develop Strategy – When the employer initiates the process to transfer the alien to the U.S., it is appropriate to discuss the short-term and long term objectives for immigration and non-immigration law issues.  For example, the duration of the proposed assignment, any plans for a permanent assignment, does the spouse or domestic partner plan to work in the U.S., domestic and international tax planning, corporate structuring, office lease, and intellectual property rights.
• Employment of Spouse or Domestic Parnter – The regulations permit the spouse (but not the domestic partner) of an L-1 to apply for an employment authorization document after the transfer.  The spouse must be physically present in the U.S. to file the EAD application.9
• Functional Managers – The regulations do not define what is a functional manager.  There is an opportunity to be creative and explore in detail the nature of the alien’s activities to determine if the position may qualify as a functional manager.  Basically, the USCIS takes the position that if the alien performs the function, this the position is not deemed to be managerial.  If the alien manages the function, the the position may qualify as a functional manager.10 It is advisable to plan ahead prior to the submission of the initial L-1 and consider what other visa options may exist for the employer in the event the USCIS denies the “New Office” extension because the viability of the U.S. entity may be threatened if the alien cannot continue to work in the U.S.  Such options may include an E, H-1B or O visas.
• In the case where an employer will submit a L visa extension, it is advisable to review the prior submission carefully to evaluate information previously submitted to the USCIS.    

 

Ethical Considerations

• The attorney who prepares and files documents to qualify for an L-1 visa has multiple clients – the U.S. company as the petiitioner and the alien employee as the beneficiary.
• It is advisable to have a written engagement letter signed and approved by all parties to address potential conflicts and procedures concerning withdrawal of representation.

 

Outlook

Comprehensive immigration reform remains an issue to be addressed by the Obama Administration and the new Congress.  It is unclear whether reforms may be enacted in a piecemeal fashion or as part of any sweeping legislation, and what effect such action may have upon L-1 visa.  In the meantime, the L-1 visa remains a viable and creative planning tool for U.S. U.S. business to employ key personel.

 

Endnotes

1. Board Certified – Immigration and Nationality Law, Texas Board of Legal Specialization; J.D. University of Houston Law Center; Partner Jackson Walker LLP, Houston, Texas.

2. 8 USC §1101(a)(3).

3. See 8 CFR §214.2(l) and Notes to the Foreign Affairs Manual at 9 FAM §41.54.

4. The form is available at www.uscis.gov.

5. See 8 C.F.R.§214.2(l).

6. With an individual L-1 visa, the I-129 filing fee is $320 per alien.  If the U.S. employer requires a decision within 15 days, there is an additional filing fee of $1000 to submit Form I-907 per alien.

7. [7]8 CFR §214.2(1)(13)(ii).

8. Memo, Hogan, Exec. Assoc. Comm., Operations, CO 214l-C (Oct. 22, 1992), reprinted in 69 No. 43 Interpreter Releases 1439, 1449–50 (Nov. 9, 1992).  Note there are different rules for amendments to L blanket petitions.

9. See 8 CFR§214.2(l) and 8 CFR§274a.12.

10. See article by Gary Endelman http://www.ilw.com/articles/2007,1206-endelman.shtm.  See also Brazil Quality Stones, Inc. v. Chertoff, 531 F.3d 1063 (9th Cir. 2008).