Qualifying Organization

Qualifying Organizations: Learn What Types of Relationships Qualify for L-1 Visa

A qualifying organization means a United States entity or foreign firm, corporation, or other legal entity which:

• Has a qualifying relationship between the U.S. entity and a foreign entity.
• Is or will be doing business as an employer in the United States and in at least one other country for the duration of the non-citizen’s stays in the United States.
• Otherwise meets the requirement of section 101(a)(15)(L) of the Immigration and Nationality Act.

The qualifying relationships are:

• Parent
• Branch
• Subsidiary
• Affiliate

Parent means a firm, corporation, or other legal entity which has subsidiaries.

Subsidiary means a firm, corporation, or other legal entity that is directly or indirectly owned and controlled by a parent. It must be established that the parent: (1) owns either directly or indirectly more than 50% of the subsidiary and controls the subsidiary. (2) owns either directly or indirectly half of the subsidiary and controls the subsidiary. (3) owns either directly or indirectly 50% of a joint venture and has equal control and veto power over the subsidiary. (4) owns either directly or indirectly less than 50 of the entity but in fact controls the entity.

Branch means an operating division or office of the same organized housed in a different location. The office or operating division is not a separate business entity. Usually, a branch will be registered as a foreign corporation operating in the United States.

Affiliate means: (1) one of the two subsidiaries both of which are owned and controlled by the same parent or individuals, or (2) one of the two legal entities owned and controlled by the same group of individuals, each individuals owning and controlling approximately the same share or proportion of each entity, or (1) in the case of a partnership that is organized in the United States to provide accounting services along with managerial and/or consulting services and that markets its accounting services under an internationally recognized name under an agreement with a worldwide coordinating organization that is owned and controlled by the member accounting firms, a partnership (or similar organization) that is organized outside the United States to provide accounting services shall be considered an affiliate of the United States partnership if it markets its accounting services under the same internationally recognized name under the agreement with the worldwide coordinating organization of which the United States partnership is also a member.

Ownership and control are the two of the factors that USCIS will examine in determining whether a qualifying L-1 relationship exists between foreign employer and the U.S employer. Depending on the nature of the petitioner, USCIS may require different types of evidence to demonstrate ownership and control for purposes of establishing the qualifying L-1 relationship. USCIS considers ownership of more than 50 percent of an organization as evidence of control. Ownership means the legal right of possession with full power and authority to control. Control means the right and authority to direct the management and operations of the business entity. Ownership and control can be two ways:

• De Jure (By Law)- Where a legal entity owns more than 50% of an entity and because of this controls the entity.
• De Facto (In Fact)- Where a legal entity owns 50% or less of an entity yet still controls the entity.

De Facto control may be sufficient to qualify relationship as subsidiary/affiliate. To establish “de facto” control, the petitioner must provide agreements relating to the control of a majority of the shares’ voting rights through proxy agreement. A petitioner can show control by submitting documentation demonstrating that one or more equity holders irrevocably granted the ability to vote their equity to another equity holder, thereby effectively (and legally) giving the equity holder ‘control’ over the company or companies in question. If control is based upon proxy votes those proxy votes must be irrevocable to establish control.

If the ownership by a common group or same individuals, each individual in the group must own approximately the same share or proportion of each entity.

Franchises and those relationships based on contractual or licensing agreements generally are not qualifying relationships for L-1 purpose.

Partnerships that market accounting or consulting services under internationally recognized name and under an agreement with a worldwide coordinating organization that is owned and controlled by the member firms, are affiliates. Well known examples are Price Waterhouse Coopers, Ernest & Young, KPMG etc.

A qualifying L-1 relationship can exist when an equity joint venture is created under corporate law if the contributing company owns at least 50 percent of the venture and exercises control over the venture.

A non-equity joint venture does not establish a qualifying L-1 relationship, because no separate entity is formed.