L-1 Visa

Intra-company Transfers

Purpose- An L-1 is intra-company transfer status accorded to an individual, employed for at least one continuous year out of the last three by an international firm or corporation, who seeks to enter the United States temporarily in order to continue to work for the same employer, or a subsidiary or affiliate, in a capacity that is primarily managerial, executive, or involves specialized knowledge. There are two types of L-1′s- L-1A and L-1B.

Procedure- Apply at USCIS Service Center or any Port of Entry if Canadian (i.e. land border or airport).

Pro- Quick to secure for Canadians and can receive approvals up to 3 years. L-1A may have fast-track path to green card.

Con- L-1A has cap of 7 years. L-1B has cap of 5 years. Also, status depends on continued viability and operational status of foreign location.

Family- Spouses and children under 21 may receive L-2′s valid for the duration of the L-1. Spouses of L-1′s may now obtain work authorization.

Points of Interest-

The L-1 is an interesting category because unlike most non-immigrant options, it does not require the individual to possess a degree. This is a nice advantage when a company needs to transfer a key individual who does not possess much schooling. Therefore, while an individual may not qualify for an H-1B because of lack of credentials, she may easily qualify for an L-1A or L-1B.

There are recent changes to the L-1 category that are important to know:

Under the L-1 Visa Reform Act of 2004, L-1B workers can no longer work primarily at a worksite other than that of their petitioning employer if either (a) the work is controlled and supervised by a different employer or (b) the offsite arrangement is essentially one to provide a non-petitioning party with local labor for hire, rather than a service related to the specialized knowledge of the petitioning employer.

The Act also requires all L-1 individuals, including those in the blanket L-1 program, to work for at least one year outside the U.S. Previously, blanket L-1s could qualify based on six months employment with a qualifying entity outside the U.S.

Lastly, the Act implemented a new $500.00 Fraud Prevention and Detection Fee for L-1 cases. This fee is applicable to all port of entry L-1 petitions, but only initial L-1 petitions through the Service Center.

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1. Definition of an L-1 Visa Intra-company Transfer

An intra-company transfer is an individual who, within three years preceding his application for admission as an L-1 to the United States, has been employed abroad continuously for one year by a parent, affiliate or subsidiary of a U.S. company. The individual must be coming to the U.S. to render his services in a capacity that is managerial, executive or a position that involves specialized knowledge.

2. L-1 Visa Requirements

The two key requirements of an L-1 are to ensure that the employee qualifies, and to ensure that the foreign and U.S. facilities enjoy the necessary corporate relationship.

a. Qualifying the Individual

As the definition reads, the L-1 applicant must be coming to the U.S. to serve in a managerial, executive or specialized knowledge capacity. The individual must be coming to the U.S. to render his services in a capacity that is managerial, executive or a position that involves specialized knowledge. An individual who is coming as a Manager or Executive is designated as an L-1A. An individual coming as a “specialized knowledge” employee is designated as an L-1B.

i. Serving in a managerial capacity is defined as:

  • Manages the organization, department, subdivision, function or component;
  • Supervises and controls the work of other supervisory, professional or managerial employees or manages an essential function within the organization or department or subdivision of the organization;
  • Has authority to hire and fire or recommend personnel actions;
  • Exercises discretion over day-to-day operations of the activity or function.

ii. Serving in an executive capacity is defined as:

  • Directs the management of the organization or a major component or function;
  • Establishes wide goals and policies;
  • Exercises wide latitude in discretionary decision making and
  • Receives only general supervision or direction from higher level executives.

iii. Specialized Knowledge

The definition of “specialized knowledge” has been a heated source of debate over the last 10-15 years. While it was once construed very narrowly, specialized knowledge is now a broad concept that encompasses employees that possess a proprietary knowledge of a company’s products, services, operations etc. Specialized knowledge is defined as: An individual who “had specialized knowledge of the company product and its application in international markets or has an advanced level of knowledge of processes and procedures of the company.”

A legacy INS memo further expanded the definition of specialized knowledge and gave clearer direction as to its parameters. The memo described the characteristics of an employee with specialized knowledge as: (a) Possesses knowledge that is valuable to the employer’s competitiveness in the market place; (b) Is uniquely qualified to contribute to the U.S. employer’s knowledge of foreign operating conditions; (c) Has been utilized as a key employee abroad and has been given significant assignments which have enhanced the employer’s productivity, competitiveness, image or financial position; and (d) Possesses knowledge which can be gained only through extensive prior experience with that employer.

b. Qualifying the Corporate Relationship

In order to qualify for L-1 status, the foreign company where the L-1 applicant works must meet the qualifying relationship of either a parent, branch, affiliate or subsidiary. As can be gleaned from this description, there must be common ownership and control of the two companies.

Regulations offer general insight into the accepted corporate relationship of the foreign company and U.S. company. Without one of these requisite relationships between the two companies, the L -1 will not succeed.

  1. Parent – a parent is defined as a firm, corporation, or other legal entity which has subsidiaries.
  2. Branch – an operating division or office of the same organization housed in a different location.
  3. Subsidiary – Regulations define four scenarios that qualify as a subsidiary:
    • Legal entity of which a parent owns, directly or indirectly, more than half (50%) of the entity and controls the entity;
    • Legal entity that owns, directly or indirectly, half (50%) of the entity and controls the entity;
    • Legal entity that owns, directly or indirectly, 50% of a 50-50 joint venture and has equal control and veto power over the entity;
    • Legal entity that owns, directly or indirectly, less than half (50%) of the entity, but in fact controls the entity.

iv. Affiliate- Regulations define three scenarios that qualify as an affiliate:

  • One of two subsidiaries both of which are owned and controlled by the same parent or individual;
  • 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;
  • Partnership that is organized in the U.S. to provide accounting services along with managerial and/or consulting services and that markets its accounting services under an international recognized name under an agreement with a worldwide accounting organization that is owned and controlled by the member of accounting firms.

c. Foreign company must continue to conduct business outside of U.S.

In addition to qualifying the individual and qualifying the corporate relationship, the L-1 also requires that the foreign location remain active. It is critical that both the U.S. and foreign location continue to be active in their business operations. This requirement is important because an L-1 individual must have a foreign company to be transferred back to after her L-1 status in the U.S. is complete.

Small companies who transfer employees to a U.S. location must show that the Canadian company is still operating and generating business. Therefore, companies cannot simply transfer their entire operations to the U.S. without maintaining things abroad. This requirement makes one-man operations difficult, but not impossible to qualify for L-1 status.

d. Intra-company transfer must be temporary

There is no requirement that an L-1 applicant maintain a foreign residence. However, like most non-immigrant categories, there is the requirement that the transfer is temporary in nature. This requirement is generally met by noting in the paperwork that the transfer is temporary, and by showing that L-1 applicant will return to the foreign location after her assignment in the U.S.

3. L-1 Visa Processing Procedures

a. Initial Application

Initial L-1 applications should be made at the Service Center with jurisdiction over the place of employment in the U.S. Unless filing for a change of status within the U.S. , the individual will then need to obtain an L-1 visa.

If the individual is Canadian, the L-1 petition can be applied through the Service Center or a Port of Entry (POE). While initial L-1′s may also be filed at the appropriate Service Center for Canadians, the POE route is much faster and more efficient. If the individual is flying out of an airport to come to the United States, that person must apply the same day as their flight. However, an individual who applies for an L-1 at a land POE may travel back and forth freely into Canada and the U.S. that same day after approval of the L-1.

b. Renewals and Extensions

L-1′s may be renewed at a POE if Canadian or extended within the U.S. at the appropriate Service Center.

c. Special Scenario- L-1 Blanket Petitions

i. Purpose

The L-1 Blanket Petition was created by the legacy INS to accommodate the needs of large multinational companies to expedite the transfer key personnel to their offices in the United States.

ii. Requirements

Petitioner (Company) must establish:

  • The petitioning company must be a member of the company’s corporate family ;
  • The petitioner and each of the related entities must carry on commercial trade or services;
  • The petitioner has an office in the United States that has been doing business for at least one year;
  • The petitioner maintains three or more foreign and domestic branches, subsidiaries and affiliates.
  • In addition, the petitioner must satisfy at least one of the following:
  • They have obtained approval of at least ten individual “L” petitions for managers, executives or specialized knowledge professionals during the previous twelve months;
  • Their United States subsidiaries or affiliates show combined annual sales of at least $25 million or;
  • They have a United States workforce of at least 1,000 employees.

Beneficiary (Employee) must establish):

  • The individual has been employed in a qualifying capacity for at least one year in the preceding three years;
  • The individual will be employed in a qualifying capacity as a manager, executive or specialized knowledge professional for a U.S. entity.

iii. Procedure

The company petitioner files a Form I-129, Petition for Nonimmigrant Worker. Upon approval, the immigration issues I-797 Blanket Approval and the qualifying organizations listed on the petition may begin transferring employees.

The beneficiary presents a completed Form I-129S evidencing tenure and qualifying capacity, and the I-797 blanket approval notice to either a consular officer or, if the alien is visa exempt such as a Canadian, to a service officer at the port-of-entry.

iv. Key Provisions

  • Period of Validity: The initial validity of an approved blanket petition is three years. The petitioner is thereafter required to file for an indefinite extension.
  • Period of Admission: The employee may be admitted to the United States for a period of three years during the validity of the Blanket L-1 petition.
  • Limitation of Admission: The L-1 Blankets is limited to five years for a specialized knowledge professional and seven years for a manager or executive apply to beneficiaries of a blanket petition.

4. L-1 Visa Duration

If the employee is being transferred to a new office, the L-1 will be approved for one year. (You may apply for an extension after one year by showing the new office is active and viable). Otherwise, the L-1 will be approved for an initial period of three years. L-1A’s (Mangers and Executives) may receive up to a total of 7 years, while L-1B’s (Specialized Knowledge Employees) max out at 5 years. It is important to remember that any periods of stay in H-1B classification will count towards L-1 time. In addition, if an individual runs out of L-1A or L-1B time, s/he can depart the U.S. for one year and start fresh with new L-1A or L-1B time.

5. Helpful Advice for L-1 Visas

The cases that seem most problematic involve small start-up operations with little financial documentation. Many involve small operations seeking to expand into the United States. A frequent question asked by the inspector is how one individual can continue to support commercial activity at both locations simultaneously, as required during the L-1 validity period. For this reason, it is important to be able to establish who will continue to run the business enterprise at the foreign location while the executive seeks to expand business operations into the United States.

6. Additional Information on L-1 Visas