Photo of nearly empty office
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Strategies for opening a new office in the United States

Written by Colleen F. Molner, Esq., Partner, N.C. Board Certified Immigration Law Specialist.

The United States has always been considered the land of opportunity, a country that encourages and supports entrepreneurship with a vibrant economy and prosperous consumers. For these reasons and more, many multinational companies want to start operations in the U.S. after experiencing success in their home countries.

One possible option that is commonly used for companies seeking to develop business in the U.S. is the New Office L-1 visa, which allows companies to begin operations in the U.S. with the assistance of key personnel from the foreign company. This visa is commonly used for those coming from countries like India, China, Brazil and Argentina that do not have bilateral investment or trade treaties providing for special treaty visas known as E visas. Unlike the E visa, the New Office L-1 visa does not require a showing of “substantial investment or trade.”

The New Office L-1 visa requires a related entity abroad and a showing that the foreign national employee to be transferred has worked in an executive, managerial or specialized knowledge capacity for at least one year within the previous three years of filing the petition.

The purpose of the New Office L-1 visa is to allow key personnel to come to the U.S. for an initial period of one year, during which time the U.S. operations are expected to grow and develop. U.S. immigration regulations define a “New Office” as an organization that has been doing business in the United States through a parent, branch, affiliate or subsidiary for less than one year. Since the new office must conduct business, the mere presence of an agent or office is not sufficient to satisfy the regulations, and it must be shown that the company is engaged in the regular, systematic, and continuous provisions of goods and/or services.

To qualify for a New Office L-1 visa, the petitioner must also demonstrate that:

1. Sufficient physical premises for the office have been secured;
2. The beneficiary meets the one-year continuous employment requirements, as explained above; and
3. The intended U.S. operation, within one year of the approval of the petition, will reach the “doing business” standard and will support an executive, managerial, or specialized knowledge position.

The New Office L-1 visa can be very intricate and document intensive. A New Office L-1 will likely face difficulty from U.S. Citizenship and Immigration Services (USCIS) if evidence submitted contains any inconsistencies or ambiguities as to the company’s or the beneficiary’s qualifications. The following is a brief discussion of a few of the key requirements and logistics involved in securing a New Office L-1 visa.

Sufficient physical premises

Per U.S. immigration regulations, the U.S. company must secure sufficient physical premises for the new office. The petitioner must therefore submit evidence showing that the company is either leasing space or that it owns or will own space that is sufficient to conduct its business.

This evidence should include a copy of the signed lease or copies of escrow documents or evidence of title to the premises; labeled color photographs showing the inside and outside of all office space, equipment, merchandise, products, employees, company logos, emblems and signs displayed on and in buildings; and a detailed explanation about how the U.S. worksite will be used, the type of building the company is occupying, why this worksite was chosen and how it will be sufficient to conduct business.

Another important factor that USCIS considers when adjudicating a petition is whether the office space is large enough to support the U.S. company and its planned growth during the first year. Therefore, it is important to keep in mind the company’s personnel plan, industry and planned growth when obtaining office space.

Business plan, financial projections and personnel plan

A detailed and extensive business plan is also required with a New Office L-1 petition, as USCIS places an emphasis on the company’s short- and long-term goals and projections when adjudicating the initial petition and future visa extensions.

The business plan should begin with an explanation as to the need for the new office in the U.S., which may include a market study/analysis. It should also include a timetable that demonstrates each proposed action for at least one year from the proposed start date. The timetable should explain the costs and implementation plans for each startup phase.

Two particularly important aspects of the business plan for USCIS are as follows: the financial projections and the personnel plan.

The business plan should include forward-looking projections of the company’s financials, such as revenues and costs. It should also explain how the financial projects were derived and whether the calculations were based on realistic, credible assumptions on current assets, growth revenues, etc.

The personnel plan should detail how many employees the U.S. company plans to hire in the first year and within the next few years. The personnel plan for the U.S. company should be specific, and it should include the job title, brief job description, education level, salary and date of expected hire for each employee. The regulations do not provide a concrete number for how many employees the U.S. company should hire, but the U.S. company should set a personnel plan that allows it to successfully operate in the U.S. and meet its financial goals.

When developing the personnel plan, the U.S. company should plan on hiring staff during the first year. Hiring employees during this initial period demonstrates growth required to secure further visa extensions. An organizational chart that provides a hierarchical view of the organization and the personnel reporting structure should accompany and conform to the personnel plan, and it should include the job title, job descriptions, education level and salary.

The organizational chart is an important piece to the personnel plan as it presents a clearer picture to USCIS about the company’s personnel expansion plans.

The one-year requirement

The business must be able to demonstrate it can support the beneficiary in the requisite managerial, executive or specialized knowledge position within one year of approval. USCIS will, at the time an extension is filed, closely scrutinize the petition to determine whether this has occurred, and to verify that the petitioner has followed through with the timetable and plans submitted in the original New Office L-1 petition.

It is not unusual for USCIS to issue a Request for Evidence (RFE) to determine whether a managerial and executive level position is performing non-managerial duties. While it is expected that a manager or executive who is required to open a new business will be more actively involved in day-to-day operations during the initial phases of the business, it must also be shown that the individual has the authority and plans to hire staff and has wide latitude in making decisions about the goals and management of the organization.

Simply providing USCIS with a job title that is managerial or executive in name is not enough; instead, a very detailed and specific job description must be provided, along with the percentage of time spent on each job duty and a picture of hierarchical reporting structure.

In essence, the business must show exactly how it will support a managerial, executive or specialized knowledge capacity position within one year while identifying the extent of the U.S. investment and the financial ability of the foreign entity to remunerate the beneficiary and to commence doing business in the U.S.

As always, please do not hesitate to contact Garfinkel Immigration Law Firm at 704-442-8000 or via email with any questions.

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