Labor Certificate PERM

L-1 Intracompany Transfer: Related Companies and Company Structures

An L-1 visa is a great way for foreign companies to establish a presence in the United States while maintaining business continuity and corporate governance. The L-1 visa allows foreign companies with a related U.S. company to send key employees to the United States. There are complexities in the issue of how the two companies should be related and the ownership structure of the entities. This corporate structure of the businesses that may be been instituted years prior to the L-1 visa application. The structural format of the foreign company and the U.S. related company may have been created for alternative reasons such as tax minimization. This can make the L-1 visa not an option for the U.S. company.

The Overseas Company and the U.S. Company must be related in a specific way.

L-1 visa regulations require the employee to have worked a year abroad with the ?same employer or a subsidiary or affiliate? of the U.S. company. There are generally four questions which the U.S. Consulate Officers ask to determine if the corporate structure is correct.

  1. Are the U.S. entity and the company abroad branch offices of the same corporation?
  2. Does the U.S. company own more than 50% of the overseas company or does the overseas company own more than 50% of the U.S. company?
  3. Are both the U.S. company and the overseas company majority-owned (more than 50%) by a third company or by the same individuals or a group of individuals?
  4. Is the U.S. company a joint venture (50% owned by each of two companies) or is the U.S. company one of the joint ventures (50% owner) of the foreign company from which the employee will come?

If the answer to any of the above is yes, then most likely the organization will be qualified as a related company. However, 50% or more ownership is not required to be a qualifying related company. The general rule is that one company has to have ?effective control? of the other company or both companies are effectively controlled by the third party. 50% or more ownership constitutes de facto control but in some circumstances as little as 10% can qualify if stock ownership is widely dispersed. The smaller the share ownership between the two entities, the questions of ?effective control? becomes more problematic.

The Companies must be a qualifying organization.

In addition, the companies must be a qualifying organization that has been actively doing business in both countries. This is to prevent owners of small businesses from transferring their business operation to the United States then effectively shuttering their foreign operations after they receive their visas.

The definition of ?doing business? means the ?regular, systematic, and continuous provision of goods and/or services.? Having an agent or a mere office abroad does not constitute ?doing business.? The business operation must have employees who are providing goods or services on a regular and routine basis.

The business form of the company is in dispute. Previously, the United States previously stated that the companies need to be incorporated. However, it is now accepted that a sole proprietorship or a partnership is also acceptable as long as the relationship between the two entities have been established. For sole proprietorships, documentation of ownership can be established by a person statement of the owner with supporting evidence such as business licenses, tax returns, and business registrations. For partnerships, documentation of ownership can be proved through the partnership agreement and evidence of the business registration.

L-1 intracompany business visas are overly complex. Without the proper business structure, the L-1 visa application will not be approved. If you are interested in the L-1 visa for your company, please contact our experienced U.S. attorneys for assistance.

?If you have any questions on what is considered for visa US., please contact our office ID Line : Virasin and Webside 095-258-4186


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