How Establishing a U.S. Subsidiary Can Lead to Permanent Residency

Crossroads to America: How Establishing a U.S. Subsidiary with an L-1A Visa Can Lead to Permanent Residency

In deciding how to legally work in the United States without the requisite labor certifications, an increasing number of international small business owners are turning toward the use of the L-1A non-immigrant visas.

This visa is used primarily for international companies to transfer executives and managers who meet the L-1A visa requirements. These aliens are deemed to be priority workers, which has an annual allotment of about 45,000 available visas.

Term of Stay

For those admitted to the United States under an L-1A visa, the United States permits admission for a maximum initial period of up to three years. The total period of stay for managers and executives can be up to seven years, and five years for those employees with specialized knowledge.

Initially, the alien is granted a period of one year on the visa, with a required extension for the additional two years on the visa. The reason for a subsequent filing for an extension after one year is to give the Immigration and Naturalization Service an opportunity to see how the subsidiary is developing financially. In addition, the Immigration service will also see whether the subsidiary has hired the requisite number of employees to support the need for an overseas executive manager.

If the alien is granted the extension after one year, the alien may then consider changing their intent and file for a change of status to permanent residency.

Application Procedures

All applications for an L-1A visa are to be handled directly by the U.S. employer who files the requisite petitions with the Immigration and Naturalization Service for the District in which the U.S. subsidiary is located. Once approval is obtained, the alien is notified to go to their consulate to obtain the visa.

Visa Requirements

In order to determine whether the employee has met the requirements for an L1A visa, the employer must consider the following Immigration Service criteria:

1. The employee must have worked for the parent company for a continuous period of at least one year. This means the transferee must have worked for the overseas company for one year. The INS may request payroll records evidencing this period of time of employment. If you already have been running your own business overseas for more than a year, you should have no problem in meeting this requirement.
2. Company for which the employee has worked for a year is related to the work that employee will do for the U.S. company. This means the transferee must be coming to the U.S. to use his expertise and experience in the same type of job he was doing in the overseas company. If The employee was a manager in charge of marketing overseas, then the employee is coming to do the same job, such as marketing for the U.S. subsidiary.
3. The U.S. Subsidiary and the Overseas subsidiary must have the same qualifying relationship. Essentially, the INS wants to end the practice of small business owners transferring themselves to the U.S. and shutting down their overseas operations. For this reason, the INS requires that the overseas operations must remain open and operational while the U.S. subsidiary is in existence. If the overseas operation is not maintained, then the transferee will lose L-1 status.  Therefore, there must remain a viable overseas operation.
4. The prospective employee must have been employed in an AExecutive@ or AManagerial@ or have ASpecialized Knowledge@. This encompasses work experience related directly to the managerial functions of company executives, and supervision of employees. Specialized knowledge pertains to special knowledge of the company product and its application of international markets or advanced knowledge of processes and procedures of the company.
5. The employee must be qualified by the position of virtue of his prior experience and education. Educational certificates, and prior work experience are required to be documented and submitted to the INS.

Documentation Required

To prepare for the L-1 transfer, the company must take the following steps in preparation, and compile the required documentation as follows:

Actions to be taken in the United States:

1. Locate Premises for U.S. Subsidiary: Premises must be leased or purchased in the United States. These premises must be documented with a lease or purchase agreement. The lease is required to be submitted to the INS with the initial petition.
2. Formation of U.S. corporation: After leasing U.S. premises a formal filing of Articles of Incorporation must be filed for the U.S. subsidiary. A Corporate book with organizational minutes must be submitted.
3. Establishment of a U.S. Bank account for the subsidiary: must be set up with adequate assets to support the start up operations for the first year, usuallly $250,000.00 minimum.
4. Business plan development: a comprehensive business plan needs to be develooped and submitted detailing how the U.S. corporation will operate.
5. Hire U.S. Employees: a minimum of four to five employees are required to be employed for each manager or executive. This will be checked at the year request for extension. If the employment numbers are not meet, the extension will be denied.

Actions to be taken by Overseas Parent Corporation:

1. Compile all corporate records, specifically, articles of incorporation, an audited financial statement, letter of asset holdings in overseas bank.
2. Documentation of work experience of overseas transferee, to include certifications, diplomas, etc.

Visa Processing Times

After all initial petition documentation has been submitted to the INS, in about 30-60 days the visa will be issued to the transferee without delay. If the INS has additional inquiries for documentation, this process can be slowed several months.

Important Points

Before pursuing a L-1A visa, it is important to remember the U.S. subsidiary will be examined and reviewed by the U.S. Immigration Service at the end of one year. If the Subsidiary is not making any significant profit or has not employed the requisite number of U.S. employees an extension of the L-1 visa will not be granted. Therefore, if deciding to choose a L visa, it is important to have your U.S.. business profitable.

If the reader is interest in pursuing a L1A visa, our law office has successfully assisted in obtaining many such visas for overseas companies. In addition, our office will assist in set up your U.S. business to comply with Immigration regulations.