Entities Qualifying for L-1 Status
In order for a company to qualify for L-1 status, the foreign entity must have a specific type of relationship with the U.S. entity. The main factors that the USCIS considers to establish the requisite qualifying relationship between entities are: ownership and control. Ownership means the legal right of possession and full power over a business entity; while control means the right and authority to direct the management and operations of that business entity.
Additionally, doing business means the regular, systematic, and continuous provision of goods and/or services by a qualifying organization and does not include the mere presence of an agent or office of the qualifying organization in the United States and abroad. Finally, the entity that seeks to qualify for L-1 visas must either be a parent, branch, affiliate, or subsidiary of the U.S. company, as defined by federal law.
- A parent is a firm, corporation, or other legal entity which has subsidiaries. The most common scenarios are when (a) a foreign entity owns more than 50% of a U.S. entity and is therefore a majority owner of the U.S. entity, and (b) a U.S. entity owns more than 50% of a foreign entity and is therefore a majority owner of the foreign entity.
- A branch is an operating division or office of the same organization housed in a different location.
- A subsidiary is a firm, corporation, or other legal entity of which a parent owns, directly or indirectly, more than half of the entity and therefore has control of; or, owns directly or indirectly half of the entity and controls the entity; or owns 50% of a 50/50 joint venture and has equal control and veto power over the entity as the other half of ownership; or, owns less than half of the entity, but in fact controls the entity.
- An affiliate is (a) one of two subsidiaries, both of which are owned and controlled by the same parent or individual, or (b) one of two legal entities owned and controlled by the same group of individuals, with each individual owning and controlling approximately half the same share or proportion of each entity.
Importantly, if one or both of the qualifying entities will be subject to some type of corporate reorganization, such as a merger or acquisition, the USCIS must reevaluate whether the qualifying relationship between the entities will still exist.
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