When a company opens a new U.S. office through an L-1A, the first business plan is largely about what the company intends to build.
When the U.S. office first opens, it usually doesn’t have the organizational structure the company ultimately intends to build. The team is still growing, customers are being developed and the person transferred to the United States may need to be more involved in getting the operation established than he or she will be later. That is part of the reality of opening a new office.
USCIS recognizes that reality. For an L-1A new office, the company must show that the U.S. operation is expected to develop enough to support a managerial or executive position within one year. USCIS also specifically recognizes that a manager or executive opening a new office may be more actively involved in day-to-day operations during the company’s initial stages.
That year can go by very quickly.
When extension time arrives, the conversation changes. The company is no longer explaining only what it intends to become. There is now a year of actual U.S. operations to look at.
And this is where some companies can run into trouble.
Imagine a foreign company establishes a U.S. subsidiary and transfers its General Manager to launch the operation.
The original plan shows that during the first year the company expects to hire a business development manager, an administrative employee and several operational employees. As the team grows, those employees will gradually take over much of the company’s everyday work, allowing the General Manager to focus primarily on directing the business.
One year later, revenue is coming in, and the company is operating.
But only two of the planned employees were hired.
Now we need to understand what the General Manager is actually doing every day.
Who is handling sales? Who is dealing with customers? Who is coordinating the administrative work? And who is performing the operational tasks necessary to deliver the company’s product or service?
These aren’t insignificant questions at the extension stage. USCIS requires evidence about the staffing of the U.S. operation, the duties the beneficiary actually performed during the previous year, the duties going forward, and the financial status of the business. USCIS can also review position descriptions and payroll documentation to understand who performs the company’s non-managerial operational work.
This is also an area of considerable confusion among applicants. People tend to focus on how many employees an L-1A company is supposed to have.
There isn’t a magic number that suddenly turns someone into an L-1A manager or executive.
That’s why, at Visa Business Plans, we don’t start an L-1A plan by deciding that the U.S. company needs five employees simply because five might look better than three.
We start with the operation.
Suppose the company imports specialized machinery from its foreign parent company and sells it in the United States. We need to understand who will develop customers, handle sales, coordinate deliveries, provide technical support and take care of the administrative work.
Once we understand how the company is expected to function, we can develop a staffing structure around the actual needs of the business and the role the beneficiary is expected to perform.
The financial projections need to support that structure too.
If the company plans to hire six people during its first year, those salaries need to appear in the projections. We also want to understand whether the anticipated revenue, investment and available resources reasonably support the hiring plan.
Then, when the first year is over, there is something concrete to compare with what was originally projected.
Perhaps the company didn’t hire six people. Maybe it hired four, but revenue substantially exceeded expectations, and the organizational structure still allows the beneficiary to operate primarily at the appropriate managerial or executive level.
That’s something the attorney and client need to evaluate based on the actual facts.
Or perhaps the company hired the projected employees, but their duties are very different from what was originally contemplated. That deserves attention too.
The important point is that the extension isn’t simply another opportunity to explain what the company plans to become. USCIS’s current guidance requires the petitioner to provide evidence of what happened during that first year, including the U.S. company’s business activity, staffing, wages, financial condition, and the beneficiary’s actual duties.
Recent USCIS decisions show why that distinction matters. In a 2024 L-1A new-office extension decision, USCIS emphasized that the regulations allow the new operation one year to develop sufficiently to support the qualifying position. The agency examined the company’s actual staffing and operations rather than relying on positions the company intended to hire later.
For us, this is why the original L-1A business plan should never be an exercise in creating the most impressive organizational chart possible.
At Visa Business Plans, we want to understand what the company can realistically accomplish during that first year, how quickly it expects to generate revenue, when additional employees should become necessary, and how the beneficiary’s responsibilities are expected to change as the U.S. operation develops.
Nobody can predict exactly what a new business will look like twelve months later. But once that first year is over, the company has an operating history, and that is what the attorney and client will work with when preparing the extension.
Contact us today to get startedThe information provided in this blog is intended solely for informational purposes. While we strive to offer accurate and up-to-date content, it should not be considered legal advice. Immigration laws and regulations are subject to change, and individual circumstances can vary widely. For personalized guidance and legal advice regarding your specific immigration situation, we strongly recommend consulting with a qualified immigration attorney who can provide you with tailored assistance and ensure compliance with current laws and regulations.
Visa Business Plans is led by Marco Scanu, a certified coach from the University of Miami with a globally-based practice coaching Fortune 1000 company executives, entrepreneurs, as well as professionals in four different continents. Mr. Scanu advises clients on turnaround strategies and crisis management.
Mr. Scanu received a bachelor’s degree in Business Administration (Cum Laude) from the University of Florida and an MBA in Management from Bocconi University in Milan, Italy. Mr. Scanu was also a Visiting Scholar at Michigan State University under the prestigious H. Humphrey Fellowship (Fulbright program) with a focus on Entrepreneurship, Venture Capital, and high-growth enterprises.
At present, Mr. Scanu is the managing partner and CEO at Visa Business Plans, a Miami-based boutique consulting firm providing attorneys and investors with business planning services in the areas of U.S. and Canadian immigration, SBA loans, and others.
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