L Visas: Not Just For Super Corporations
The L-1 intra-company transferee classification is appropriate for the transfer of specified types of employees within multinational companies. This category permits a U.S. company to temporarily transfer certain employees from a properly affiliated foreign company. There are three categories of L-1 visa: L-1A, L-1B, and L-1 blanket. L-1As are for employees in or offered employment in either an executive or managerial position; L-1Bs are for specialized knowledge employees, e.g., engineers. Large employers who need many employees to come to the U.S. can file blanket L-1 petitions with the USCIS, rather than filing individual petitions for each employee.
Basic requirements of an L-1 visa
To be eligible to file L-1 petition(s), a qualifying relationship must exist between the U.S. company and the foreign company. Qualifying relationships include parent company, branch, subsidiary, or affiliate. This requires the US entity to be owned 51+% by the foreign company, or vice versa.
Each transferred employee must have been employed by the foreign affiliate for at least one continuous year within the three years prior to coming to the U.S..
Some of our clients come to us believing that L visas are only applicable in practice to large global companies. While large global companies certainly utilize L-1s, smaller and midsize companies can utilize them as well.
You can even use an L visa to come to the US to open a new branch of a company, however, it is required to be “doing business” through regular, systematic, and continuous provision of goods and/or services. Simply having an agent or office of the qualifying organization in the United States or abroad will not satisfy the requirements of an L visa.
This means that just because you set up an entity in the U.S. and/or abroad does not mean that you will be able to qualify for the L1 visa. For example, if the entity was just set up but does not provide any services, you would not be able to meet the “doing business” requirement. Here, you likely need either an American executive or you could enter the US on a B-1 visa and lay the foundation.
The most common L-1 scenario is, if both the U.S. and the foreign entity sell goods or provide services to clients in their respective countries.
Example:
You own 100% of a software company in Germany that has been operating for 4 years. The company is reasonably successful. It has 7 employees and has revenue of around 2 million Euros per year from providing software as a service (“SaaS”) to German businesses. You also own 100% in a US entity that provides SaaS, has been operating for 2 years and has 5 employees. The US company’s revenue is 4 million USD per year and it comes from providing SaaS to US businesses.
Here, “doing business” is fairly clear. You would submit each company’s respective tax returns showing revenue, payroll, expenses, W-2s showing employees, and lease agreements for any office spaces. This is the most common scenario for an L-1 visa, a situation when both entities are taking revenue from clients.
In this situation, you could use the L-1 to move German executives or software/computer engineers to the US in order to work at the American entity of the same company. Alternatively, the company could move employees in America who may need a work visa to Germany for a year and then bring them back to the US on an L-1.
Additionally, one of your entities may service the other and meet the “doing business” requirement. Take the example above, except now the German business only performs non-client internal work, like marketing or IT, for its American affiliate. In this situation, one related entity is providing services to another related entity, and meets the doing business requirements. Here, your business would qualify to use L visas for your company’s employees.