L-1 Intracompany Transferee

The L-1 visa is a non-immigrant visa for employees of multinational companies who are being transferred to work temporarily in the U.S. at an affiliate company in either a managerial or executive capacity (L-1A) or a specialized knowledge capacity (L-1B). The L-1 foreign national is called an “intracompany transferee.”

Qualifying Relationship Between the U.S. and Foreign Companies: To qualify for the L-1 status, the prospective employee must have been employed abroad with an affiliate, parent, branch, or subsidiary of the petitioning U.S. company. The key to the qualifying relationship is “effective control,” which means one entity, either the U.S. or the foreign company, must exercise control over the other. A 50/50 joint venture ownership meets the requirement.

In addition, the U.S. or foreign entity must be a company that is or will be doing business as an employer in the U.S. and in at least one other country directly or through a parent, branch, affiliate, or subsidiary for the duration of the foreign employee’s stay in the United States. Doing business means regular, systematic, and continuous provision of goods and/or services. The Code specifically states that doing business does not include the mere presence of an agent or office of the qualifying organization in the United States and abroad. The Code, however, does not require the foreign national to be coming to a pre-existing office. The foreign national may come to the U.S. to be opening or to be employed in a new office.

Period of Employment Abroad: The employee must have been employed overseas with the foreign branch of the company for a continuous period of one year within the three years prior to filing the petition or entry into the United States. If the foreign national was employed overseas and made business trips to the United States, time spent in the United States must be deducted from the total amount of time employed abroad. The foreign national must establish a full year of employment outside of the United States.

Nature of Position: The period of employment abroad must have been in either managerial/executive or specialized knowledge capacity.

Managerial/Executive Capacity: The Code of Federal Regulations defines “managerial capacity” as an assignment within an organization in which the employee primarily: (1) manages the organization, or a department, subdivision, function, or component thereof; (2) supervises and controls the work of other employees, or manages an essential function within the organization, has authority to hire and functions at a senior level within the organization; (3) exercises discretion over day-to-day operations of the activity or function for which the employee has authority.

The Code defines “executive capacity” to mean an assignment within an organization in which the employee primarily directs the management of the organization or a major component or function thereof; establishes goals and policies; exercises wide latitude in discretionary decision-making and receives only general supervision from higher level personnel.

One important advantage to this classification is that an L-1A executive or manager will often be eligible for “Priority Worker” classification for permanent residence (green card). This allows the multinational manager or executive to apply for permanent residency without undergoing the extensive process of labor certification.

Specialized Knowledge Capacity: The Code defines “specialized knowledge” as a special knowledge possessed by an individual of the petitioning organization’s product, service, research, equipment, techniques, management, or other interests and its application in international markets, or an advanced level of knowledge or expertise in the organization’s processes and procedures.

Family Members: Dependent family members (spouse and minor children) of an L-1 nonimmigrant are eligible to apply for L-2 derivative status. Spouses in L-2 status may apply for employment authorization after obtaining the L-2 status. Children and spouses in L-2 status may also attend U.S. schools without changing to student status although a student in the derivative L status will not be granted practical training opportunities that come with the F-1 student visa.

Maximum Stay in the U.S: L-1 status is generally approved for an initial period of three years. If the U.S. employer is a start-up company, however, L-1 status is originally granted for only one year. The L-1A (manager/executive) can be extended up to a statutory limit of seven years; the L-1B (specialized knowledge) is limited to a total of five years. The employer is not obligated to retain the employee for the entire five- or seven-year period. Unless the parties contract otherwise, the employment relationship is “at will” and either party is free to terminate the relationship at any time. If, however, the employee/employer relationship works in the United States for the entire five-year or seven-year period, the foreign national must spend one year physically outside of the United States before regaining eligibility to apply for a new period of L-1 status. Employees serving in a Managerial or Executive capacity may be eligible for the green card  (permanent resident) version of this visa.

Application Process: The U.S. employer must file a petition on behalf of the employee with USCIS. Once this petition is approved, the employee can then apply for a visa at the consulate to come work in the U.S. The State Department requires an in-person interview to obtain an L-1 visa so an appointment must be made with the appropriate U.S. consulate to apply for the visa.

If the foreign national is already in the U.S. in a different status, he or she can apply for a change of status at the same time the employer files the L-1 petition, but keep in mind the employment abroad requirement explained above must still be met. Also, the change of status does not provide for the L-1 visa, which is necessary for re-entry to the United States. So, if the foreign national travels outside of the U.S. he or she will need to apply for a visa at the U.S. consulate before returning.

The supporting documentation filed with the petition can be quite extensive, especially if the U.S. company is a new enterprise. For example, documents about the company should include, among others, a business plan, evidence of the U.S. company’s assets, its incorporation documents, proof of the relationship between the U.S. entity and the entity overseas. Information related to the employee should include his work history, skills and education and a description of the proposed U.S. position.

Quotas: There are no quota restrictions for L-1 visas.

Other Information: See also the E-1 and E-2 nonimmigrant visas and the EB-5 immigrant investor (green card) for other business-related options.

For more information about the L-1 visa or other paths to living and working in the United States, please contact attorney-author Vonda K. Vandaveer at atty@vkvlaw.com or 202-340-1215.