Buying Before Moving: An L-1 Due Diligence Checklist for Canadians Acquiring or Reorganizing a U.S. Company

Written September 9, 2026. Reviewed by Rosanna Berardi, Esq.

TLDR:

• If you’re a Canadian entrepreneur planning to acquire, recapitalize, or restructure a U.S. business, and eventually run it from inside the U.S., the deal structure itself determines whether an L-1 visa is even possible.
• L-1 eligibility depends on a specific, provable “qualifying relationship” between a foreign company and a U.S. company (common ownership and control). A poorly structured acquisition can accidentally erase that relationship before it’s ever used.
• The safest approach is to loop in immigration counsel during due diligence, not after the purchase agreement is signed.
• Ownership percentages, control rights, closing mechanics, and executive timing are built to support the visa, not work against it.

For many Canadian business owners, buying or reorganizing a U.S. company isn’t just a financial transaction, it’s the first step toward actually living and working in the United States. The plan usually sounds simple: acquire the company, become its U.S.-based CEO or President, and transfer down using the L-1 intracompany transferee visa.

The complication is that the L-1 category wasn’t built for acquisitions. It was built for multinational companies moving existing executives between existing offices. When a Canadian buyer creates that “multinational company” relationship through the transaction (by acquiring, merging, or restructuring) the deal’s legal architecture has to accidentally (or intentionally) produce exactly the kind of ownership and control that USCIS is looking for. Get the structure wrong, and the transaction that was supposed to open the door to an L-1 can just as easily close it.

This is why immigration counsel belongs on the deal team early, alongside the M&A attorneys and accountants, not brought in after the letter of intent is signed to “figure out the visa part.” Below is a due-diligence checklist to work through before you close.

What the L-1 Actually Requires (Before You Look at the Deal)

Before applying the checklist to a specific transaction, it helps to know what USCIS is actually testing for. The L-1 category requires:

• A qualifying relationship between a foreign entity and a U.S. entity (generally parent-subsidiary, affiliate, or branch) established through common ownership and control, not simply a contract or brand license.
• A transferring employee who has worked abroad for the foreign entity for at least one continuous year within the three years before filing, in an executive, managerial, or specialized-knowledge capacity.
• A U.S. position that is itself executive, managerial, or specialized-knowledge in nature, not simply “owner” on paper.
• Evidence that both entities are actively doing business, on an ongoing basis, not just holding assets.

An acquisition or reorganization can satisfy every one of these requirements, or quietly undermine any of them, depending on exactly how it’s put together. That’s the due diligence work.

Checklist Item 1: Does the Deal Create or Destroy Common Ownership and Control?

USCIS looks past the label on the transaction to the substance of who actually owns and controls both companies after closing. A few structures deserve particular scrutiny:

• Full buyout with no Canadian entity left standing

If the Canadian buyer simply purchases 100% of the U.S. target and has no continuing Canadian operating company, there may be no foreign entity left for the U.S. company to be “qualifying” with. The L-1 requires a relationship between a foreign business and a U.S. business; a single company that happens to have a Canadian owner is not, by itself, a multinational organization.

• Minority or diluted post-closing ownership

If seller financing, private equity co-investors, or rollover equity from prior owners leaves the Canadian buyer with less than majority ownership and less than de facto control, the “control” prong can fail even where ownership looks close. USCIS examines voting rights, board composition, and veto rights, not just the cap table.

• Joint ventures and 50-50 splits

A joint venture can support an L-1, but only where control is genuinely equal and documented; equal voting rights, equal board representation, and negative-control provisions that prevent either side from being outvoted. A 50-50 structure that gives one party a tie-breaking vote or greater operational authority is no longer a qualifying joint venture.

• Rollover equity and seller involvement

When existing owners retain a meaningful equity stake and board seats after closing, review whether their continuing rights dilute the Canadian buyer’s control below what USCIS expects to see, even if the buyer holds a numerical majority.

Checklist Item 2: Is There Still a Foreign Entity “Doing Business”?

The Canadian company doesn’t just need to exist on paper abroad, it needs to be actively operating with revenue, employees, and ongoing activity, both at filing and throughout the L-1 employee’s stay. This matters most in two common scenarios:

• The Canadian business is being wound down once the U.S. acquisition closes, because the whole point of the deal was to relocate the operation. If the Canadian entity stops doing business, the qualifying relationship can evaporate along with it. Timing here is critical.
• The Canadian business is a holding company only, with no employees or independent operations of its own. A shell entity used purely to hold shares in the U.S. company generally will not satisfy the “doing business” requirement.

If the long-term plan involves consolidating operations into the U.S. entity, that consolidation needs to be sequenced deliberately, not treated as an afterthought once the visa is filed.

Checklist Item 3: Does the Executive’s Foreign Employment History Hold Up?

The one-year foreign employment requirement is often the most overlooked piece in an acquisition scenario, because the buyer’s role abroad may be changing at the same time as the deal:

• Has the transferring executive actually worked for the Canadian entity (not a personal holding company or a newly formed acquisition vehicle) for one continuous year within the past three years?
• If the acquisition vehicle is a newly created Canadian NewCo formed specifically to make the purchase, does that entity have any operating history at all? A brand-new shell typically cannot supply the required one year of qualifying employment.
• Is the executive’s role abroad genuinely executive, managerial, or specialized-knowledge (documented through job descriptions, org charts, and payroll) or largely titular?

Where a new acquisition entity is being formed in Canada to execute the purchase, the qualifying employment history usually needs to sit with an existing, operating Canadian company.

Checklist Item 4: Is the Executive’s U.S. Role Actually Executive or Managerial?

Buying a company doesn’t automatically make the buyer eligible to run it as an L-1A executive. USCIS wants to see a defined position with real authority like setting policy, directing the organization, exercising discretion over day-to-day operations, supported by staffing that allows the executive to actually work at that level rather than performing the underlying services personally.

For smaller acquisitions, this is a genuine due diligence question: does the target company have (or will it have, by the time of filing) enough staff and infrastructure to support a legitimate executive or managerial position for the incoming owner? A one- or two-person operation may not.

Checklist Item 5: Is the Closing Sequence Aligned With the Visa Timeline?

Deal timing and immigration timing don’t automatically move together, and mismatches create real problems:

• Filing before closing generally isn’t possible, since the qualifying relationship doesn’t exist until the transaction closes.
• A gap between closing and filing may be necessary to show the U.S. entity is operating and staffed appropriately. Filing the same week as closing, with no operational history, invites additional scrutiny.
• If the acquisition is a “new office” scenario, the initial approval period is shorter, and USCIS expects a credible business plan and staffing timeline showing the new office will support an executive or managerial position within the first year.
• Extension filings will need to show the qualifying relationship, the executive’s role, and the company’s operations have all held up as represented at the initial filing.

Working backward from the executive’s intended U.S. start date, and forward from the deal’s expected signing and closing dates, helps identify whether the timeline needs adjustment before documents are finalized.

Bringing It Together Before You Sign

None of this means an L-1 is off the table for a Canadian buyer. Most acquisition and reorganization scenarios can be structured to support one. The risk isn’t that the visa is unavailable; it’s that deal terms get locked in before anyone has evaluated what those terms mean for the visa. Renegotiating equity splits or board rights after signing is far harder than building them correctly from the start.

This is the reason immigration counsel is most useful sitting alongside the M&A team during structuring and due diligence, not reviewing the signed purchase agreement afterward. At Berardi Immigration Law, we work directly with business attorneys, accountants, and deal teams to flag these issues while the structure is still flexible, so the transaction that gets you into the U.S. business is the same one that gets you into the country to run it. Nobody should navigate immigration alone, and that’s especially true when a cross-border transaction and an immigration petition are moving on the same clock. Book your consultation with our team of award-winning business immigration attorneys today.

FAQs

Q: Can I qualify for an L-1 if I’m buying 100% of a U.S. company with cash and closing out my Canadian business afterward?

It depends heavily on timing. If the Canadian company stops operating before the L-1 petition is filed and approved, there may be no qualifying foreign entity left to support the visa. This scenario often calls for either keeping the Canadian entity operating through the relevant filing period or considering whether an E-2 treaty investor visa fits the timeline better, since E-2 doesn’t require an ongoing foreign qualifying relationship in the same way.

Q: Does rollover equity from the seller affect my L-1 eligibility?

It can. If the seller retains equity and board rights after closing, USCIS will look at whether the Canadian buyer genuinely controls the U.S. company, not just whether they hold the largest ownership stake. Voting rights, veto provisions, and board composition all factor in, so rollover terms should be reviewed with the L-1 control requirements in mind before the purchase agreement is finalized.

Q: What’s the difference between structuring this deal for an L-1 versus an E-2 visa?

The L-1 requires an ongoing qualifying relationship between a foreign and a U.S. company plus a year of prior qualifying foreign employment; the E-2 is generally based on a substantial investment by a national of a treaty country and doesn’t require maintaining a foreign operating company. Depending on the deal structure, one may fit significantly better than the other, which is exactly why the visa strategy should be part of the deal conversation and not a decision made after closing.