Source: https://www.jqklaw.com/l-1-intracompany-transfer-qualified-corporate-relationships-between-the-us-and-foreign-company.html
Timestamp: 2019-03-26 00:53:42
Document Index: 348549154

Matched Legal Cases: ['§ 214', '§ 214', '§ 214', '§ 214', '§ 214', '§ 204', '§ 214']

Rules & Regulations About the Qualified Corporate Relationship Between the US and Foreign Company
Doing Business (for the US Petitioner or Qualified Related Company Abroad)
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.
If a petitioner indicates that a beneficiary is coming to the United States to open a "new office," it must show that it is prepared to commence doing business immediately upon approval so that it will support a manager or executive within the one-year timeframe. See generally, 8 C.P.R. § 214.2(1)(3)(v). At the time of filing the petition to open a "new office," a Petitioner must affirmatively demonstrate that it has acquired sufficient physical premises to house the new office. See 8 C.P.R. § 214.2(1)(3)(v)(A).
The phrase "sufficient physical premises" is broad and somewhat subjective, leaving flexibility in adjudicating this legal requirement. However, the Petitioner bears the burden of establishing that its physical premises should be considered "sufficient" as required by the regulation at 8 C.P.R. § 214.2(1)(3)(v)(A). To do so, it must clearly identify the nature of its business, the specific amount and type of space required to operate the business, its proposed staffing levels, and evidence that the space can accommodate the Petitioner's growth during the first year of operations.
To establish a "qualifying relationship" under the Act and the regulations, the petitioner must show that the beneficiary's foreign employer and the proposed U.S. employer are the same employer (i.e. one entity with "branch" offices), or related as a "parent and subsidiary" or as "affiliates." See generally section 101(a)(15)(L) of the Act; 8 C.F.R. § 214.2(1).
The pertinent regulations at 8 C.F.R. § 214.2(l)(l)(ii) define the term "qualifying organization'' and related terms as follows:
(2) Is or will be doing business (engaging in international trade is not required) as an employer in the United States and in at least one other country directly or through a parent, branch, affiliate or subsidiary for the duration of the alien's stay in the United States as an Intracompany transferee [.]
(I) One of two subsidiaries both of which are owned and controlled by the same parent or individual, or
(2) One of two legal entities owned and controlled by the same group of individuals, each individual owning and controlling approximately the same share or proportion of each entity.
The regulation and case law confirms that ownership and control are the factors that must be examined in determining whether a qualifying relationship exists between the United States and foreign entities for purposes of this visa classification. Matter of Church Scientology International, 19 I&N Dec. 593 (BIA 1988); see also Matter of Siemens Medical Systems, Inc., 19 I&N Dec. 362 (BIA 1986); Matter of Hughes, 18 I&N Dec. 289 (Comm. 1982). In the context of this visa petition, ownership refers to the direct or indirect legal right of possession of the assets of an entity with full power and authority to control; control means the direct or indirect legal right and authority to direct the establishment, management, and operations of an entity. Matter of Church Scientology International, 19 I&N Dec. at 595.
As general evidence of a Petitioner's claimed qualifying relationship, in addition to stock certificates, the corporate stock certificate ledger, stock certificate registry, corporate bylaws, and the minutes of relevant annual shareholder meetings must also be examined to determine the total number of shares issued, the exact number issued to the shareholder, and the subsequent percentage ownership and its effect on corporate control. Additionally, a Petitioning company must disclose all agreements relating to the voting of shares, the distribution of profit, the management and direction of the subsidiary, and any other factor affecting actual control of the entity. See Matter of Siemens Medical Systems, Inc., 19 I&N Dec. 362.
In order to establish eligibility in this case, it must be shown that the foreign employer and the petitioning entity share common ownership and control. Control may be "de jure" by reason of ownership of 51 percent of outstanding stocks of the other entity or it may be "de facto" by reason of control of voting shares through partial ownership and possession of proxy votes. See Matter of Hughes, 18 I&N Dec. at 293.
(L) Affiliate means:
(2) One of two legal entities owned and controlled by the same group of individuals, each · individual owning and controlling approximately the same share or proportion of each entity
As general evidence of a petitioner's claimed qualifying relationship, a certificate of formation or organization of a limited liability company (LLC) is probative to establish ownership or control of an LLC. Further, LLCs are generally obligated by the jurisdiction of formation to maintain records identifying members by name, address, and percentage of ownership and written statements of the contributions made by each member, the times at which additional contributions are to be made, events requiring the dissolution of the limited liability company, and the dates on which each member became a member. These membership records, along with the LLC's operating agreement, certificates of membership interest, and minutes of membership and management meetings, must be examined to determine the total number of members, the percentage of each member's ownership interest, the appointment of managers, and the degree of control ceded to the managers by the members. Additionally, a petitioning company must disclose all agreements relating to the voting of interests, the distribution of profit, the management and direction of the entity, and any other factor affecting actual control of the entity. See Matter o[Siemens Medical Systems, Inc. , 19 I&N Dec. 362 (BIA 1986).Without full disclosure of all relevant documents, U.S. Citizenship and Immigration Services (USCIS) is unable to determine the elements of ownership and control.
The regulations specifically allow the director to request additional evidence in appropriate cases. See 8 C.F.R. § 204.5G)(3)(ii). As ownership is a critical element of this visa classification, the director may reasonably inquire beyond the identification of a member of an LLC into the means by which this membership interest was acquired. As requested by the director, evidence of this nature should include documentation of monies, property, or other consideration furnished to the entity in exchange for the membership interest. Additional supporting evidence would include an operating agreement, minutes of relevant membership or management meetings, or other legal documents governing the acquisition of the ownership interest.
The Petitioners’ statement of ownership and control should be accompanied by appropriate evidence such as evidence of capitalization of the company or evidence of financial resources committed by the foreign company, articles of incorporation and government registration (showing ownership of company), by-laws, and minutes of board of directors’ meetings, corporate bank statements, profit and loss statements or to her accountant’s reports, or tax return.
Stock certificate alone may not be sufficient to establish that a qualifying relationship exists. Documents such as corporate stock certificate ledger, stock certificate registry, corporate bylaws, and the minutes of relevant annual shareholder meetings when appropriate, should also be examined to determine the total number of shares issued, the exact number issued to the shareholder, and the subsequent percentage ownership and its effect on corporate control.
When appropriate, a petitioning company should be asked to provide all agreement relating to the voting shares, the distribution of profit, the management and direction of the petitioning company, and other factors affecting actual control of the entity. Without full disclosure of all relevant documents, USCIS may be unable to determine the elements of ownership and control.
Evidence of the acquisition of the actual ownership interest (i.e. capital investment, wire transfers, stock purchase agreements, etc.) may be required as additional supporting evidence.
Articles of incorporation (evidence of ownership and relationship to the US company) should be provided, as well as picture of the businesses and detailed charts and breakdowns of full/part-time employees and/or contractors, and include their titles, education, salaries of each employee and their payroll info.
To establish a "qualifying relationship" under the Act and the regulations, the Petitioner must show that the Beneficiary's foreign employer and the proposed U.S. employer are the same employer (i.e. one entity with "branch" offices), or related as a "parent and subsidiary" or as "affiliates." See generally section 101(a)(15)(L) of the Act; 8 C.F.R. § 214.2(1). The regulations and case law confirm that ownership and control are the factors that must be examined in determining whether a qualifying relationship exists between United States and foreign entities for purposes of this visa classification. See Matter of Church Scientology International, 19 I&N Dec. 593 (Comm'r 1988); see also Matter of Siemens Medical Systems, Inc., 19 I&N Dec. 362 (Comm'r 1986); Matter of Hughes, 18 I&N Dec. 289 (Comm'r 1982). In the context of this visa petition, ownership refers to the direct or indirect legal right of possession of the assets of an entity with full power and authority to control; control means the direct or indirect legal right and authority to direct the establishment, management, and operations of an entity. Matter of Church Scientology International, 19 I&N Dec. at 595. Control may be de jure by reason of ownership of 51 percent of outstanding stocks of the other entity or it may be de facto by reason of control of voting shares through partial ownership and possession of proxy votes. Matter of Hughes, 18 I&N Dec. 289 (Comm'r 1982).
In the Sun Moon Star decision, the Immigration and Naturalization Service (now USCIS) refused to recognize the indirect ownership of the petitioner by three brothers owning shares of the company as individuals through a holding company. The decision stated that the two claimed affiliates were not owned by the same group of individuals. The court found that the Immigration and Naturalization Service decision was inconsistent with previous interpretations of the term "affiliate" and contrary to congressional intent because the decision did not recognize indirect ownership. Prior to the adjudication of the Sun Moon Star petition, the Immigration and Naturalization Service amended the regulations so that the definition of "subsidiary" recognized indirect ownership. See 52 Fed. Reg. 5738, 5741-2 (February 26, 1987). Accordingly, the basis for the court's decision has been incorporated into the regulations. However, despite the amended regulation and the decision in Sun Moon Star, neither legacy Immigration and Naturalization Service nor USCIS has ever accepted a random combination of individual shareholders as a single entity, so that the group may claim majority ownership, unless the group members have been shown to be legally bound together as a unit within the company by voting agreements or proxies.
In order to establish de facto control of both entities by an individual, the petitioner must provide agreements relating to the control of a majority of the shares' voting rights through proxy agreements. Matter of Hughes, 18 I&N Dec. 289, 293 (Comm'r 1982). A proxy agreement is a legal contract that allows one individual to act as a substitute and vote the shares of another shareholder. See Black's Law Dictionary 1241 (7th Ed. 1999). The agreement of two individuals to vote shares in concert does not rise to the level of a proxy agreement giving one individual control over the voting rights of a majority of the issued shares.
L-1: the Qualified Corporate Relationship Between the US and Foreign Company