Impacts of Mergers and Acquisitions on Nonimmigrant Visas and the Green Card Process

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

While immigration compliance often takes a back seat to other issues during mergers and acquisitions, failing to perform extensive immigration due diligence before, during and after a corporate restructure could result in significant added expense, the frustrating loss of employees because of lapses in work authorization, and/or potential for violations and fines after audits from Immigration and Customs Enforcement (ICE).

The manner in which a merger or acquisition is completed, and whether it is considered a “successor-in-interest,” is fundamental in determining strategy for employee immigration matters.

According to the USCIS, “when a company is bought, merged, changes corporate structure, or significantly changes owners, the new or reorganized company is generally considered a successor-in-interest (SII) of the original company.”

This is a common situation where an employer is merged or purchased by another company in its entirety, and that company took over all ownership and liability of the original employer. It generally occurs in a purchase where the buyer now holds all assets and liabilities, including immigration obligations, of the seller company.

These details determine how each employee’s individual work authorization is impacted by the corporate restructure. Schedule a consultation with one of Garfinkel Immigration Law Firm’s experienced attorneys to discuss immigration implications associated with a corporate restructure.

Impacts on nonimmigrant visa types

It is important to understand how a corporate restructure could impact employees’ temporary work authorization depending on their visa type. Different action and strategies must be taken, depending on the employees’ visa type, as generally outlined below.

E-1 /E-2 Trader and Treaty Investor Visas

E-1 (treaty trader) and E-2 (treaty investor) visas are issued pursuant to bilateral treaties between the United States and various other countries. Most Western European countries are parties to such treaties with the U.S., which allow an individual from that country to apply for an E visa for an employer sharing his/her nationality.

In a merger or acquisition, the nationality of the new/successor entity is a key factor in determining its impact on E visa holders. An individual may no longer be eligible to continue working on an E visa – and other alternatives may need to be explored – if the nationality of the successor company is different from that of the previous ownership.

Therefore, those with Evisas likely have the most exposure to risk during and after a corporate restructure. Because of this, it is prudent to explore other nonimmigrant visa options for E visa holders, such as an L-1 visa, prior to the merger or acquisition.

H-1B Visas

The H-1B visa is for employees who are filling a “specialty occupation”, which generally requires the employee to possess a bachelor’s degree or higher in a field related to the position.

Employers may avoid filing amended H-1B petitions or new Labor Condition Applications (LCA) if the new entity is considered a successor-in-interest, as long as an employee’s job function, duties and work location are expected to remain unchanged.

In fact, the successor-in-interest company is simply required to place a Notice in each impacted H-1B employee’s Public Access File before the effective date of employment. Such Notice must attest that the company accepts the obligations and liabilities of the H-1B workers’ LCAs filed by the predecessor entity, amongst other details.

If the conditions of employment for specific employees will be altered following the merger or acquisition, or if the Notice is not timely placed in the employees’ Public Access Files, then the successor company must file amended H-1B petitions. Additionally, if the company is not considered a successor-in-interest, the new employing entity will need to file an H-1B change of employer application with the USCIS before the employee is eligible to begin employment with the new entity.

L-1 Intracompany Transferee Visas

To qualify for an L-1 visa, a foreign national must be transferring from an overseas company to a U.S. company that is related by at least 50 percent common ownership and/or control.

The L-1 visa is the most commonly used visa to accomplish the transfer of key employees among an international group of related companies. Therefore, as the visa classification is dependent upon a qualifying relationship between companies, L-1 employees are at risk of losing their L-1 work authorization when a corporate acquisition or merger takes place, particularly outside of its original group of related companies.

The good news is that there are viable strategies available to L-1 employees, whether they applied for and entered on their L-1 pursuant to a company’s L-1 Blanket Approval, or pursuant to an individual petition filed through the USCIS (outside of a company’s L-1 Blanket Approval).

For L-1 visa holders who have received L-1 approval outside of a company’s L-1 Blanket Approval, an amended L-1 visa petition is almost always required to work for a new entity after a merger or acquisition.

For L-1 visa holders who entered the U.S. pursuant to a company’s L-1 Blanket Approval, the regulations permit them to move employment to another entity on the company’s blanket approval, without the need for government approval. Therefore, a company may avoid filing multiple individual amended L-1 petitions by filing an amendment to its L-1 Blanket Approval in advance of the merger/acquisition, to assure it includes the employees’ predecessor and/or successor company. As long as the company’s blanket approval has been amended and updated with the predecessor/new entity, the blanket L-1 employees’ employment will be effective with the new entity as of the date of the merger/acquisition.

It is important to note that the group of companies must also maintain multinational status and have at least one office operating outside of the U.S. Individuals risk losing their L-1 work authorization if the successor company is not multinational. In that case, other visa alternatives would need to be considered.

TN Professional Visas

The TN visa was created as part of the North American Free Trade Agreement (NAFTA) and is available to Canadian and Mexican citizens who are engaging in a business activity at a professional level on behalf of a U.S. employer.

In most cases, the successor company should timely file/present amended TN petitions with the appropriate government agency in order to update the employee’s employer based on the corporate restructure.

Influence on Green Card applications

Most individuals intending to immigrate to the U.S. through employment must obtain an offer of permanent employment from an employer in the U.S.

Different action and strategies need to be taken, depending on preference category and the stage of the employee’s green card process, as generally outlined below. While not always possible, strategic decision-making well in advance of a planned corporate restructuring can minimize expense to employers and preserve long-term immigration status for key employees.

Labor Certification “PERM”

Individuals who desire to immigrate to the country through an offer of permanent employment must generally first, through the prospective employer, obtain certification (Form 9089) from the U.S. Department of Labor (DOL) before an immigrant visa petition (Form I-140) may be filed. This process, commonly referred to as “PERM”, requires the employer to test the labor market through an extensive recruitment process that involves posting advertisements in a variety of locations. A merger or acquisition has the capability of disrupting this process, depending on its timing.

Where possible, a successor company should carefully plan and coordinate the timing of recruitment in order to avoid duplicative efforts. Per the DOL, the employer must conduct recruitment using its legal name at the time of recruitment and, similarly, must file the Form 9089 in its legal name at the time of submission. This could result in a disparity in the employer’s name if, for example, the merger or acquisition occurred after recruitment but before filing Form 9089. To help explain the disparity, in the event of an audit by the DOL, the employer should maintain documentation demonstrating the successor-in-interest relationship.

If the Form 9089 has already been filed or certified before a merger or acquisition, the new employer will generally not need to make any modifications, as long as it qualifies as a successor-in-interest. In these cases the petitioning employer will be updated at the I-140 step of the green card process and should be prepared to prove the successor-in-interest relationship.

Immigrant Petitions (Form I-140)

For second and third preference employment-based categories, a successor company may continue the green card process for its employees without restarting the PERM process. The successor company is permitted to utilize the predecessor company’s certified PERM, as long as it files an I-140 successor-in-interest immigrant visa petition to reflect the new corporate structure and demonstrate it qualifies as a successor-in-interest following a merger or acquisition. The new entity also must confirm that the terms and conditions of the predecessor entity’s job offer remain unchanged.

For all other employment-based preference categories, the successor employer must file new immigrant visa petitions with the USCIS.

Application to Adjust to Permanent Resident Status (I-485 form)

Adjustment of Status (AOS) is the final stage of the green card process. At this stage, the sponsoring green card employer must provide documentation confirming its continued offer of permanent employment. Additionally, the employee must demonstrate his/her intention to fulfill such offer of employment with the sponsoring employer.

In merger and acquisition cases, the employer and employee may request the government to “port” its green card employment to the new employer once the employee’s AOS application has been pending for at least 180 days. Otherwise, the employee is not eligible to adjust their status and complete the green card process based on a bona fide offer of employment.

A successor company will not need to take any additional steps for employees who already hold an approved green card, as they are approved to work for all U.S. corporations and businesses.

General recommendations for employers

Gather and review documents

Before the completion of a merger or acquisition, the successor company should gather and thoroughly review the following documents from the seller:

  • A complete record of employees relying on the employer for work authorization
  • A docket of any in-progress immigration cases
  • Job descriptions of all employer-sponsored employees
  • Findings of any previous immigration audits

Note: The above is not a complete list. A purchasing company should consult with immigration counsel to identify and review any and all relevant documentation.

I-9 compliance

Successor companies have two options for I-9 compliance following a merger or acquisition: They can either require all employees to complete new I-9 forms or else take control of the 1-9s from the previous owner, which includes assuming all risks and liabilities. An I-9 audit should be performed before the completion of the merger or acquisition to determine which option makes the most sense for an individual business or corporation. It is critical to have an action plan for inheriting a predecessor’s I-9s to avoid penalties and risks resulting from a government investigation for incomplete or missing I-9s.

Update public access files (For H-1B Employees)

Successor companies should review the predecessor company’s Public Access Files in advance of the merger/acquisition and ensure they are completed. The Public Access Files are a necessary component to updating the H-1B employees’ work authorization in a corporate merger/acquisition and it is critical that they are compliant with the regulations to avoid fines and penalties in the event of a government investigation. Please refer to the above section explaining appropriate steps for updating H-1B employees’ work authorization in a corporate merger/acquisition.


Before the finalization of a merger or acquisition, a successor company should determine if the previous employer used E-Verify and whether the new entity will be required to do so moving forward.

While participation in the program is not mandatory for most businesses, some companies may be required by state law or federal regulation to use E-Verify depending on the company’s number of employees.

There are many complex legal implications that evolve from mergers and acquisitions that can impose substantial risk on buyers and sellers.

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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