EVEN A SMALL FOREIGN CORPORATION CAN BE THE STEPPING STONE INTO THE UNITED STATES

The intracompany transfer (L-1 visa) is the method of transferring executives and managers from a foreign company to a U.S.A. company.  The U.S. company can be formed for the sole purpose of transferring a manager or executive and starting a business in the U.S.A. 

There must be a relationship between the two companies, e.g. they may be owned by the same shareholders or the one company may be a subsidiary of the other.

The two companies need not be in the same type of business.  There need not be trade between the two companies and no minimum investment is required in the U.S. company.

The U.S. company can be a new venture (start-up business) or it can purchase an existing business in the U.S.A.  The U.S. company may operate more than one type of business.

It is necessary to show that the manager or executive has been employed by the foreign corporation for at least one year in the three years preceding the time of the application for transfer to the United States.

When the U.S. company is newly formed, an L-1 visa will be granted to the manager or executive for one year.  At the end of one year it will be necessary to show the Immigration Service that the business is operating and not merely a dormant company.  It is necessary to show business activity. 

The fact that the business is not financially successful in the first year will not preclude an extension of the L-1 visa.  In fact, the L-1 visa or managers and executives can be extended for a total of seven years.  It is, however, necessary for the foreign company to continue its business activities while the U.S. company is operating. 

The concept of the L-1 visa intracompany transfer is to allow foreign businesspeople to come into the United States and establish businesses with the intent of leaving the company in the hands of an American manager once the business is up and running. 

However, the Immigration Laws do anticipate that the U.S. company may later decide to retain the services of the transferred manager or executive permanently. 

Once both companies have been operating for at least one year and the United States company is viable, it is possible to petition for Permanent Residence (Green Card) for the manager or executive.

The fact that the managers or executives are from an international group of companies, entitles them to Permanent Residence without the need to prove that there are no American workers who can do that particular job.  That proof is the usual procedure for foreigners who wish to gain Permanent Residence in the United States based on their occupation. 

This special exemption (of proving that there are no Americans that can do the job) is not the only benefit which executives and managers enjoy.  They are also classified as 'Priority Workers' in the quota system.  This special classification enables them to receive their green cards before other people who are claiming Permanent Residence through their occupation. 

The L-1 visa, which had been the springboard for many businesspeople wishing to establish business bases in the United States, suddenly found the Golden Door closed on them approximately 10 years ago.  At that time, the Immigration Service redefined "managers" to mean people who spent at least 50% of their time managing other people.

In order to qualify as a manager, it was therefore necessary to show that the foreign business employed numerous people and to show that the United States corporation, after its first year of existence, would be employing numerous people so that the transferee was a true "manager".

Fortunately, the Immigration Laws were later changed to make it possible for a person to be a 'functional manager'.  A functional manager is primarily engaged in policy making at a senior level and need not be managing employees e.g. a financial manager.  It is now once again possible for small foreign businesses to utilize the L-1 visa to establish satellite operations within the USA.

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