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Business Plan Tips for Avoiding L-1 Petition Denial

by Sherrod Seward, Partner, Queen City Immigration Law. 704-500-2075

The L-1 nonimmigrant classification is appropriate for certain foreign employees whose employers would like to transfer to a new job position with their subsidiary or affiliate in the United States.  The L-1A classification is designed for employees who are either managers or have executive responsibilities. The L-1B is reserved for employees who are vital to the functioning of the company because they possess highly specialized knowledge of the company'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. L-1 petitions can be a daunting task considering the level of detail required for the petition and the consequences of getting denied, especially for a newly formed US branch. It takes plenty of planning and risk to open a business in the first place. The risk only becomes greater if necessary personnel cannot get approved to work for the new subsidiary or affiliate.

About Queen City Immigration Law

Queen City Immigration Law is a Charlotte, North Carolina-based full-service immigration law firm that focuses on the strategic needs of our clients. Our firm specializes in purposeful, intelligent and thorough representation for both employers and investors. We also advocate for families and individuals all over the world with personally tailored service.  For exceptional service to the community, we have attorneys with fluency in French, Vietnamese, and Polish languages. Other languages are easily accommodated upon request.

United States Citizenship and Immigration Services (USCIS) office requires a business plan for L-1 petitions and often denies petitions because the plans are insufficient. Companies seeking an L-1 visa or status for their employees often submit their internally prepared business plans without carefully examining the milestones and expectations set by USCIS. Being aware of the USCIS requirements can go a long way towards avoiding a denial. Below are some best practice tips to avoid receiving an L-1 petition denial:

1. Make Sure the L-1 is Appropriate for the Employee

The L-1 petition must demonstrate that the petition’s beneficiary is well qualified as a manager, or has highly specialized knowledge or skills. This means that the beneficiary has, at the very least, have been employed by the petitioning company for its parent, subsidiary or affiliate abroad for at least 1 year in the 3 years immediately preceding the filing of the petition. This 1 year of employment should be in the same or similar position to that to be assumed in the United States. However, a role change is permitted if a previously non-managerial employee is promoted to a managerial or executive position in the United States. Similarly, it is also acceptable for a manager to come to the U.S. to provide her specialized knowledge to the new team.

2. Feature Managerial Duties and Experience of the Applicant

The applicant should have clear managerial functions in their job description and stay away from participating in day-to day operations. USCIS does not look favorably on management positions that are also hands on with duties normally left with operation-focused employees because that makes it difficult for USCIS to evaluate whether the position is truly managerial or executive. The L-1 petition should reflect the beneficiary’s experience in a managerial position, the details of their duties in the position held abroad, and how much time the applicant will spend managing other employees or directing the business of the U.S.-based entity.

3. Include Credible Sales Projections

USCIS wants to be sure that the petitioning organization or its parent, subsidiary or affiliate abroad can support all the employees the business plans to hire. If the newly set up U.S.-based business assumes full responsibility for the L-1 employees' salaries and compensation, USCIS can evaluate sales projections as a determining factor to gauge how likely the new business will be able to meet hiring goals. The sales projections cannot be simply “made up.” The projections must be realistic. Of course, no one can be certain of sales in the future, but there are ways to estimate based on information in the field. It is appropriate to use tools such as industry, competition, and feasibility studies to show USCIS that careful thought was put into sales projections. Investing in professional marketing services and following a proven business model also goes a long way.

4. Prove that the Foreign Company is Related to the US Company

USCIS will evaluate the nexus between the foreign entity and the company in the United States where the proposed L-1 employees are to be employed. After all, the L-1 nonimmigrant category is designed for intracompany transferees. As such the petition must successfully establish that the foreign company is the parent, subsidiary or affiliate of the company in the United States.