What is the L-1 visa?
Congress created the L‑1 visa in 1970 to facilitate greater investment in the United States by multinational companies while meeting the workforce needs of multinational employers operating in an increasingly global marketplace.
Although the top 50 employers, including Amazon, Google, Microsoft, and Nike accounted for 31.18% of all L-1 petitions (9,028 out of 29,533), the USCIS does not maintain information regarding how many L-1s are for small businesses or start-ups.
However, our experience shows that the L-1A was not intended for small businesses or start-ups. Therefore, smaller operations face unique hurdles when trying to meet the L-1 legal framework. Some of those unique challenges include:
1. Manager, executive, or specialized knowledge?
The L-1A visa was created to transfer important employees from offices abroad to the United States. This visa allows petitions by U.S. employers only for managers, executives (L‑1A), and specialized knowledge workers (L‑1B).
But given that the L-1 visa was created for multinational companies, the concept of manager, executive, or specialized knowledge reflects the realities of bigger companies. And not the unique characteristics of small businesses.
So, how does VBP address the gap between the L-1 visa legal framework and business realities?
Within the context of an L-1 visa, our business plans aim to show that an executive is someone who will primarily (let’s say, at least 51% of the time) direct and oversee the operations of a company - or an important component or function (for example, sales or finance). Depending on the size and nature of the U.S. business, an L-1 executive accomplishes this by overseeing at least one manager who, in turn, manages the day-to-day operations of the business - or a major component or function of the company.
An L-1 manager instead can be either a people manager or a function manager.
A people manager will supervise and control professional employees and manage the organization, or a department, subdivision, function, or component of the business.
A function manager manages an important function of the business (such as finance or logistics) at a high level, without direct supervision.
The U.S. government defined in writing what an executive, manager, or specialized knowledge worker means. And it is not, again, what the small business owner thinks it is. Why? Because the L-1 visa was created for multinationals.
At Visa Business Plans, we address the above requirements by:
Including a detailed projected block and line organizational chart that clearly mirrors one of the three L-1A classifications listed above, including subordinate employees. Notably, if the projected U.S. operation will receive some type of support from the foreign entity, we also highlight it in the organizational chart.
Crafting detailed industry-specific job duties that meet the legal framework, including the four prongs of the L-1A executive or manager definition
2. Physical location and Investment
A key L-1A requirement is the need to secure sufficient physical premises to house the new office.
Also, even though the L-1 visa is not an investor visa, in the past, the USCIS has looked into the U.S. company’s financial ability to compensate the employee and begin doing business in the United States. So, the required investment will depend on the type of business and projected growth. For example, a small consulting firm will require a lower investment than, let’s say, a food manufacturing company.
We liaise with the immigration attorney handling the case to address the physical location requirement. In the past, we have made reference to a lease agreement for a commercial space that will house the operations in Year 1 (which commences when the L-1A visa is approved). Alternatively, and always in coordination with and under the guidance of the immigration attorney, we have shown that the U.S. company has leased a small commercial space and has secured - in writing - the ability to expand to larger offices in the area as soon as additional employees are hired.
3. Grow to a size to support the beneficiary?
An L-1 new office petition is approved for 12 months. After the approval, the U.S. company must grow to a size to support the beneficiary. The million-dollar question from small business owners seeking the L visa is, what’s the minimum number of employees that the L company must hire in order to get the visa approved.
There’s no hard and fast rule, and the number will depend on the size and nature of the business, including the support that it might get from the foreign qualified entity. It will also depend on the L-1A classification (executive, manager, or specialized knowledge).
At VBP, we make sure that the business plan shows that there will be sufficient staff below the beneficiary to support the L-1A petition. More importantly, we use industry benchmarks to ensure that the staffing plan and revenue/profit projections are credible and realistic.