Intra-Company Transferee Visas for Small Companies

The INS denies numerous L-1 Petitions, particularly where a small U.S. petitioning company is involved. At the same time, however, the growth of international trade has increased the number of multinational corporations doing business in the U.S. These international corporations require the resources of executives, managers, or employees with specialized knowledge who have trained at the foreign office, and are familiar with company operations, procedures, or products. The L-1 visa was designed to assist these companies to conduct and expand business through affiliate, subsidiary, or parent companies in the U.S.

To qualify for an L-1 visa, a Petition must establish that:

(1) the employee must have worked for the same employer, a subsidiary or an affiliate abroad for a period of six months during the last three years;

(2) the Petitioner must be doing business in the United States and at least one other country during the entire period of transfer;

(3) the transferring employee was employed abroad in an “executive,” “managerial” or “specialized knowledge” capacity, and the position the employee will be filling with the U.S. company must be the same; and

(4) the employee must be qualified for the position based on education and experience.

Although each case differs, the INS continues to issue the same boilerplate, trite denial letters. These denials are almost entirely devoid of “specific facts” required by the regulations when a denial letter is issued. Instead, these denials are nothing more than a dry recitation of statutory and regulatory law. There is little factual reference in the denial, and no analysis of the few facts that are mentioned. There is no explanation or attempt to connect the few facts cited to the statue or regulations in any meaningful way. In short, the issuance serves as inadequate notice of the reasons for the denial.

The typical INS letter concludes with, “Based upon the type of business of the petitioner…and because the petitioner is only comprised of a small amount of employees, the beneficiary will not be serving primarily and substantially all of the prospective duties in an executive or managerial capacity…” There is no prior discussion of how or why the Petitioner’s business is relevant, or why it has a negative effect. This statement would only have been appropriate had it been preceded by a discussion and refutation of the specific assertions in the documentation, and a consideration of all of the facts which bear on a determination of whether the Beneficiary will continue in an L-1 capacity.

Federal courts have held that when an INS abuses its discretion when a denial is premised on a unclearly defined reasons, or is devoid of explanation or analysis. The courts have consistently held that an agency will abuse its discretion if it does not make a careful and individualized determination. The failure to articulate specific reasons upon which a denial is premised has been held to be an abuse of discretion. In addition, an abuse of discretion is had where an agency inexplicably departs from its own regulations, or fails to consider all relevant factors.

The INS’ own Operating Instructions do not discuss the size of the company or its staffing level as having a negative effect on the definition of an executive. To the contrary, the Operating Instructions state that: “If a small or medium-sized business supports a position wherein the duties are primarily executive or managerial, it can qualify under the L category.”

The INS appellate body, the Administrative Appeals Unit (AAU) has repeatedly held that the number of employees cannot serve as the basis for denial in cases where the beneficiary is clearly identified as the top manager for an organization. The AAU held that so long as the Beneficiary will be working in an executive or managerial capacity, the small number of individuals that a company has is not a basis for denial.

The AAU has also held that even the sole employee for a company may also serve as its executive for L-1 purposes provided that his or her primary function is to plan, organize, direct, and control an organizations functions through other people, either employees or independent contractors. So long as the executive does not engage duties which are auxiliary or clerical in nature, but constitute the essential functions necessary for the successful operation of the business, an L-1 Petition should be granted.

An L-1 Petition may also be approved even where the Petitioner’s business has actually decreased in size since its establishment in the U.S. In another case, the AAU noted that the petitioner was engaged in “a viable if small enterprise,” and accepted as reasonable the petitioner’s explanation that he had been forced to reduce his number of employees, and to take a cut in his gross annual income. The AAU found the beneficiary eligible because “[h]is efforts in his executive capacity as president of the firm enabled it to retain viability during harsh economic times.”

Lastly, the California Corporations Code requires a corporation to have a chief executive officer (CEO) in the form of a Board chairman or a President. If a corporation has not elected a Board chairman, the INS’ denial of a CEO infringes on a State?s corporate statute. The INS is usurping the power of the State to govern and regulate its own corporations. The 10th Amendment to the U.S. Constitution states that all powers not delegated to the federal government are reserved in the States. For this reason, there are no federal corporations, but only State corporations. By denying a corporation the right to fulfill its formalities under State law by electing a CEO, the INS is assuming the role of the State.

Even if the INS has denied your L-1 Petition, there is still hope for getting it approved. You should consult an attorney who is an experienced immigration practitioner with a specialty in the area of business immigration.