This guide covers trends in adjudications of multinational executives & managerial petitions for small and emerging businesses.
Background/Introduction: L-1A Manager, L-1A Executive & Functional Manager
The general definition of “manager” entails responsibility for directing the activities and budget of a department, division, business unit, or team, through a subordinate staff of managers, degreed professionals, and/or technical specialists. 8 CFR §214.2(l)(1)(ii)(B).
A L-1A Manager must meet at least 3 of the following requirements to show that the transferee is “primarily” engaged in managerial duties:
There can be two kinds of managers:
U.S. Citizenship and Immigration Services (USCIS) Memorandum, M. Aytes, “AFM Update: Chapter 22: Employment-based Petitions (AD03-01)” (Sept. 12, 2006), published on AILA InfoNet at Doc. No. 06101910. USCIS draws a distinction between “personnel managers” who manage subordinate staff and “function managers” who manage all activities relating to an essential function. Although this guidance was written for immigrant visa petitions for multinational managers and executives, USCIS has cross-applied the considerations for multinational manager immigrant visa petitions to L-1A manager petitions. See, e.g., Matter of [name not provided], LIN 95 019 50617 (AAU Jan. 31, 1996), 16 Immig. Rptr. B2-29 (noting that L-1 position “followed the guidelines of Matter of Irish Dairy Board”).
A “function manager” qualifies as a “manager” even without subordinate staff, by virtue of the transferee having managerial responsibility for all aspects of a particular department, division, or business unit. 8 CFR §214.2(l)(1)(ii)(B)(3)–(4). This transferee must function “at a senior level within the organizational hierarchy or with respect to the function managed.” 8 CFR §214.2(l)(1)(ii)(B)(3).
An “executive” has similar duties to those of a manager but on a broader scale, by exercising more senior-level responsibility for directing numerous departments, divisions, and business units. 8 CFR §214.2(l)(1)(ii)(C).
Review of recent AAO Decisions upholding L-1 Managers, Executives and Functional Managers for small business’ L-1 New Offices-Challenges
If the transferee will come to the United States to open or work in a new office, that has been “doing business” in the United States, through a parent, branch, affiliate or subsidiary for less than one year, then there are additional requirements. 8 CFR §214.2(l)(3)(v).
To determine whether the U.S. entity has been doing business in the United States for at least one year, there must be “regular, systematic, and continuous provision of goods and/or services by a qualifying organization,” and not only the “presence of an agent or office”.
While these petitions are subject to greater scrutiny, and the chances of being issued a Request for Evidence are greater (AILA Liaison/VSC Agenda Item Q&As (Jan. 24, 2007), published on AILA InfoNet at Doc. No. 07021465 (posted Feb. 14, 2007), it is quite possible to take advantage of the fact that the analysis of a new office situation is inherently prospective in nature. USCIS must be convinced that there is a bona fide, legitimate and soon-to-be profitable business in the making. One must gather as much details as possible to support the position that the business will be able to support an executive/managerial position within the first year of business. Specifically, for a managerial or executive assignment, the petition should include documents to evidence the following considerations, at a minimum. CFR §214.2(l)(3)(v).
“The heart of the issue may be credibility”- it’s all about building and selling a good story!
Amount of Investment-$, $$, $$$
Of course, the more the investment, the better the chances! But it may be possible to show than investment of as little as $2000 is sufficient to show bona fides of business. This is especially true of service companies which require very little investment to commence business. Moreover, these companies are more likely to start making money within the first year of business. One can argue that the valuation of these companies is low, and therefore the capitalization amount is also low. If capitalization is low, and revenue stream not certain, it helps to show that the L-1 transferee will be paid by the foreign/overseas company.
Physical Office Requirement
There is no escape from leasing a physical office. Virtual Offices, home offices and PO Box will not do. But it is possible to lease month to month as opposed to a year-long lease. Lease/sub-lease agreements, floor plans, pictures of the office (inside, outside, equipment, logo) may be submitted.
Importance of a good business plan
This is what will help establish the credibility of the new business. A detailed, well-reasoned and reasonable business plan is an absolute must. The business plan should list the targets, the growth plan and a time line for achieving important business milestones. It is important to remember to keep the goals and targets realistic so that when the time comes to file the extension, the company can show that at least a reasonable part of the goals set were achieved.
Hiring plans
A good business plan will help establish that the business will sustain an executive or manager within the first year of business.
L-1 New Office Extensions
There is little room to argue that the more people a business can hire, the better the chances of obtaining the L-1A extension. The idea is to establish that the L-1 transferee is not engaged in the day to day running and operations of the business, but is responsible for controlling, supervising and managing the people who engage in the day to day operations of the business. That being said, it is extremely challenging for a new and small business to hire full time employees and run payroll. As long as the L-1 transferee is not engaged in the day-to-day tasks of running the business, there is a possibility to show that he/she is primarily engaged in a managerial/supervisory role. It is possible to create the “magical” organization chart by showing the following are being supervised by the L-1 transferee:
Key is to emphasize that there are other people to perform the day-to-day non qualifying duties leaving the L-1 transferee free to manage/control/supervise such people/function.
To show that the business will support an Executive or Manager at the end of the first year, it is important to show that there will be sufficient business. Any current/potential contract between Petitioner and vendors, supplies, customers will help to show that the business is credible and bona fide. Bank statements (even if there is a low balance, so long as there are multiple transactions), income and expense statements etc. all help to show that the business has the ability to support an executive/manager. If the business is not profitable, focus on growth. If the business succeeds in achieving some of its targets outlined in the business plan, emphasize those.