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The Dilemma of the L-1A Nonimmigrant Visa for Small Businesses

By: Santiago J. Padilla, Esq.

The U.S. immigration laws (the Immigration and Nationality Act) provides nonimmigrant visa status for an intracompany transferee who, within the last three years, has been employed abroad continuously for one year, and who will be employed by a branch, parent, affiliate, or subsidiary of that same employer in the U.S. in a managerial or executive capacity. This is the L-1A transferred multinational executive classification. Specifically, the requirements for the L-1A visa are as follows:

  • The applicant must have worked continuously for an affiliate or subsidiary of a U.S. employer for one year of the last three years prior to entering the U.S. in nonimmigrant status.
  • The applicant's employment with the foreign affiliate or subsidiary must have been in a managerial or executive capacity.
  • If the U.S. employer is an affiliate, the foreign and U.S. employer must have the same or nearly the same shareholders or controlling block of owners.
  • The applicant must be coming to the U.S. to work for the U.S. employer as a manager or executive employee.
  • The U.S. employer must have a commercial office or other commercial installations or facilities.

At first blush, this formulation appears to be straight-forward and relatively easy to meet. Indeed, for multinational corporations such as Toyota, Microsoft, General Motors, and other companies with executives throughout the world, it is very easy to comply with the elements. And, in fact, until recently, it was relatively easy for a small to medium-sized company to also meet the required elements. Therefore, when a small foreign company wanted to expand in the U.S., it would establish a subsidiary in the U.S. and then transfer one of its executives with confidence that a visa could be obtained.

However, meeting the required elements is becoming very difficult for a small company to meet for one specific reason. Currently, USCIS requires a visa candidate to clearly show that the visa candidate is an "executive," which according to the current interpretation means a person who has at least two to three levels of subordinates, with several of those subordinates being managers and/or having university degrees. More importantly, under the Immigration and Nationality Act, as amended, "an employee who primarily performs the tasks necessary to produce the product and/or to provide the service(s) of the organization" does not qualify for an L-1A visa. That person is not an executive or manager.

This makes it almost impossible for a small company to obtain an L-1A visa for a transferred executive especially because of the enormous economic burden that this would entail. Indeed, most small foreign companies that desire to expand to the U.S. do not have a complex corporate structure. In fact, in many cases the owner of the foreign enterprise is himself the visa candidate, who may only have a handful of subordinate employees and who usually performs the day-to-day tasks of the company. Yet, that person will not qualify for an L-1A visa. Many claim this to be unjust. However, that is precisely how USCIS and the courts are currently interpreting the law. See Brazil Quality Stones, Inc. v. Michael Chertoff et al., Case No. No. 06-55879 (9th Cir. July 2008).

Therefore, in order for a company to have success in transferring an employee to the U.S., the company must show that the individual was an executive prior to coming to the U.S. and will be an executive in the U.S. That means that the visa candidate must have at least two if not three levels of subordinates, with several of those subordinates being managers and/or persons with university degrees. Most importantly, the visa candidate should not be performing the day-to-day tasks that are required to produce the product or service provided by the company.

If you have any questions regarding L-1A visas or any other immigration law issues, please do not hesitate to contact me, Santiago J. Padilla, Esq., either at 800-483-7197, at [email protected], or on the internet.

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