Expanding your team: Bringing key personnel to the US

Written by Yoanna Gospodinova, lead paralegal at Samartin and Friends

If you are an SME (small and medium-sized enterprise) looking to expand in the US market, there are several US visa options that may work.

A viable pathway for entrepreneurs and SME business owners seeking opportunities in the US is the L-1 intra-company transfer visa. It enables SMEs to leverage existing talent to open or grow their presence in the US.

Transferring executives and managers: L-1 intracompany transfer visas

The L-1 intracompany transfer visa allows international companies to bring key personnel (executives, managers and employees with specialized knowledge) to their US operations. There are two types of L-1 intracompany transfer visas: L-1A for executives and managers, and L-1B for persons with specialized knowledge.

To qualify for an L-1 visa:

• The employee must: have worked for the company abroad in an executive, managerial or specialized knowledge capacity for at least one year within the last three years;
• the employee will work at the US office in an executive, managerial or specialized knowledge position;
• the foreign company and the US company must have a qualifying relationship as affiliate, branch, parent, or subsidiary; and
• the foreign company and the US company must be doing business during the whole period of the transfer.

Compared to other employment-based visas, the L-1 visa is heavily scrutinised and requires more documentary evidence to meet the eligibility criteria.

 However, the L-1 visa is a great option for new businesses, which have been operational for less than one year in the US and need to transfer executives and managers to the US to set up the US office and establish the company’s presence in the US market.

Further, the L-1 visa is a useful option for companies with already established US operations, which need to deploy professional employees from their overseas offices to the US who possess the specific proprietary company knowledge or leadership skills that are not readily available in the US.

Therefore, the L-1 visa is a great option for startups looking to enter and expand into the US market, as well as for companies with existing US operations looking to fill critical roles, to ensure the smooth running and growth of the company’s US operations.

Tips for demonstrating the qualifying relationship between the UK and US entities

One key requirement to qualify for an L-1 visa that an employer must meet is that the foreign employing entity and the US company are related in a specific manner as affiliate, branch, parent, or subsidiary.

There are two important factors to be considered when determining the qualifying relationship between the foreign and US entities, which are ownership and control.

According to US law, ownership of more than 50 per cent of an organization is considered as evidence of control. However, there is additional evidence that may be submitted for an owner with 50 per cent or less of a company that can demonstrate control over an organisation.

Therefore, it is important to clearly describe the corporate relationship between the foreign and US related entities in the petition forms and documentation.

Further, the US government requires evidence documenting the qualifying relationships between the foreign and US entities, which may include incorporation/formation documents, stock/member certificates, by-laws, partnership/operating/LLC agreements, tax returns, audited financial statements, a statement from an authorized official regarding the ownership and control of each qualifying organization and more.

Obtaining such documentation that details the ownership and control of the relevant entities should not be difficult for small and medium enterprises, whose ownership structures are usually not as complex as those of large multinational companies.

Overcoming common challenges: RFE trends and denials

Obtaining an L-1 visa is a two-step process: first, the employer submits a petition to the US federal agency, United States Citizenship and Immigration Services (USCIS), and after the petition is approved, the employee included in the petition attends a visa interview at a US Consular post abroad to obtain the L visa.

At the petition stage, if USCIS considers that the original filing lacked evidence as required by the regulations or statutory provisions, it may issue an RFE (Request for Further Evidence) requesting additional information and/or documents from the petitioning company.

Receiving an RFE will usually delay the adjudication of the L petition by several weeks or months, depending on the amount of additional evidence requested, accessibility of evidence, and availability of the parties to collate and provide the requested evidence.

Although an RFE does not mean a denial of a petition, it may create uncertainty and unpredictability for businesses and employees especially when there is some urgency in getting an approval of an application.

RFEs and denials of L-1 petitions are not uncommon, and they usually focus on either the qualifying relationship between the foreign and US entities, or whether the employment of the beneficiary (either foreign employment or proposed US employment) is executive, managerial or specialized in nature.

Further, if the original petition filing relates to a new office, USCIS may scrutinise more heavily the proposed nature of the new office, the scope of the US entity and its organisational structure, as well as its financial goals, and require evidence of a detailed business plan, office premises as well as evidence of business viability.

Therefore, it is important to submit a thorough initial petition filing that contains all required information and documentation, ensuring all documents are legible and presented in an orderly fashion, and making sure that the legal requirements for the L-1 visa classification are met, to avoid the likelihood of an RFE and a denial.

Policy watch: How the political landscape may shape intracompany transfer policies

It is unclear how the new Trump administration may impact the intracompany transfer policies; however, it is anticipated that stricter adjudication standards for immigration petitions and applications may be introduced.

This will likely mean increased RFEs and denials of petitions and applications, as well as increased fees, slower processing times and additional requirements.

Given these uncertainties and potential hurdles, engaging a US immigration expert will be essential to navigate the process effectively and maximize the chances of a successful L-1 application.

While immigration policy changes may be introduced by the new administration, bringing in heightened scrutiny and stricter compliance, changes to the overall structure of the L visa program will require legislative approval and will take time.

As such, the L-1 visa will remain a viable option for entrepreneurs regardless of any political changes that may come into effect.

The L-1 visa is therefore a better option for entrepreneurs and small and medium business owners who are looking to expand into the US, because it enables new offices to transfer key managerial and executive employees to the US to scale the business, existing businesses to leverage knowledge of key personnel at their US operations to grow the business, and there is no requirement to invest a substantial amount of capital in the US business to get an approval. 

If you’d like further information about the L-1 intracompany transfer visa, require immigration advice in relation to an RFE, or have any questions about immigration options for your business, reach out to us on info@samartinandfriends.com.