L-1 Affiliation Requirement
The L-1 (“intracompany transferee”) classification is utilized by employers to transfer executives, managers, and specialized knowledge employees to the United States from an affiliated office abroad. To qualify, there are requirements that must be satisfied by both the petitioning employer and foreign employee.
Employer requirements include:
- Must be doing business as an employer in the U.S. and in at least one other country; and
- Must have a qualifying relationship with a foreign employer (a.k.a. affiliation requirement).
Employee requirements include:
- Must have been working in an executive, managerial, or specialized knowledge position for a qualifying organization abroad for one continuous year within the three years immediately preceding admission to the U.S.; and
- Must be seeking to enter the U.S. to provide services in an executive, managerial, or specialized knowledge position.
The L-1 Affiliation Requirement
To establish eligibility for L-1 status, it must be shown that the U.S. petitioner has a qualifying relationship with a foreign entity. Essentially, the government wants to see that the employee is being transferred within the same company, hence the term “intracompany transferee.” So, what exactly is a qualifying relationship? According to the regulations, a qualifying relationship exists if the foreign entity is either a parent, branch, subsidiary, or affiliate of the U.S. petitioner. Below is a breakdown of each:
- A “parent” is defined as a firm, corporation, or other legal entity which has subsidiaries. In terms of hierarchy, a parent company will be at the top and typically owns and controls each entity underneath it.
- “Branch” means an operating division or office of the same organization housed in a different location.
- A “subsidiary” is a firm, corporation, or other legal entity of which a parent owns, directly or indirectly: (a) more than half of the entity and controls the entity; (b) half of the entity and controls the entity; (c) 50 percent of a 50/50 joint venture and has equal control and veto power over the entity; or (d) less than half of the entity, but in fact controls the entity.
- An “affiliate” refers to one of the following: (a) one of two subsidiaries, both of which are owned and controlled by the same parent or individual; or (b) one of two legal entities owned and controlled by the same group of individuals, with each individual owning and controlling approximately the same share or proportion of each entity.
In satisfying the L-1 affiliation requirement, a petitioner must include documentation illustrating the company’s ownership structure and then explain how each entity is related.
Typical evidence includes but is not limited to the following:
- A structural organizational chart of the company
- A statement by the petitioner detailing company ownership and control
- Tax returns, audited financial statements, annual reports, etc.
- Share ledgers and share certificates
- Formation documents (Articles of Incorporation, Corporate Bylaws, Operating Agreement, Partnership Agreement, etc.)
How to Apply for L-1 Status
Canadian citizens: An L-1 petition may be filed with U.S. Customs & Border Protection (CBP) at a U.S. port-of-entry and a decision is normally issued on the spot. The L-1 beneficiary may begin working in the U.S. immediately following an approval.
All other nationalities: An L-1 petition is filed through the mail to United States Citizenship & Immigration Services (USCIS). Once the case is approved, the individual will then apply for a visa at a U.S. Embassy or Consulate abroad.
If you have any questions regarding an L-1 petition, feel free to contact me via LinkedIn or by email at [email protected].