The U.S. Employer's
Business Relationship and Ability
1. The U.S. Employer Business Relationship
The EB1 Multinational Executive or Managerial (EB-1C) immigration category is designed to facilitate international transfer of executive or managerial personnel within multinational companies. This immigrant visa category is also can be used for executives and managers who are running starting-up business operations in the U.S. for foreign corporations, as well those being transferred to the U.S. by large international corporations based in the U.S. or abroad.
It is required that the prospective employer in the United States be the same employer or a subsidiary or affiliate of the firm or corporation or other legal entity by which the foreign executive/manager was employed abroad. There is no specific requirement as to the size of the petitioning company or its gross business volume. But USCIS regulations require that the employer be conducting business in two or more countries, one of which is the United States, either directly or through affiliates or subsidiaries. In addition, the company must have been in business in the United States for at least one year prior to the fling of the immigrant visa petition.
The international transfer of executive or managerial personnel into U.S. can be between different branches of the same company, or between different companies. In this EB1 immigration category, the employee must have worked in a managerial or executive capacity for the related company abroad, for at least a one-year period in the three years preceding the transfer.
The alien employee should be coming to the United States company to function in an executive or managerial capacity. The employee may already be in the United States in a non-immigrant visa status such as the L-1A visa or one of the E visa classifications. The U.S. company must show that it is either the parent, subsidiary, affiliate, or branch office of the company abroad, and the relationship between the U.S. and overseas operations must be documented and proved.
2. The U.S. Company and the Company Abroad
In order for an alien to be classified as an EB1 Multinational Executive or Managerial intra-company transferee, there must be a U.S. employer serving as the petitioner. The U.S. employer may take the form of any business organization, such as an incorporated corporation, an LLC, a general partnership, a limited liability partnership, a partnership, a joint venture, or any other type of business entity.
An individual may not serve as the petitioning U.S. entity, but a U.S. business organization owned and controlled by the same individual that also owns and controls the foreign entity qualifies as a petitioning U.S. entity. The U.S. company may be the parent, subsidiary, branch or affiliate of the foreign company. In most cases, the foreign company is the parent company of the U.S. company, and the U.S. company is the subsidiary company of the foreign company. The alien beneficiary of an EB-1C immigrant petition must be employed in the U.S. company in an executive or managerial capacity. The U.S. company must have been in existence and doing business for at least one year before the EB-1C petition is submitted, and must actively engage in business operations and be financially viable to support the petition.
In order for an alien to be classified as an EB1 Multinational Executive or Manager, there must be a foreign employer. The foreign employer may take the form of any business organization, such as a company limited by shares, a limited liability company, a partnership, a joint venture, or any other type of business entity. A foreign individual may not serve as the foreign entity, but a business organization solely owned and controlled by such foreign individual qualifies as a foreign entity. The company abroad may be the parent, subsidiary, branch or affiliate of the U.S. company. The alien beneficiary of an EB-1C immigrant petition must have been employed in the foreign company in a managerial or executive capacity for no less than one year in the three years immediately preceding the date the petition is submitted.
3. The Multinational Relationships and Qualifying Organization
USCIS regulation requires that the U.S. employer is the same employer or a subsidiary of the company by which the alien beneficiary was employed abroad. There is no requirement for the size of the petitioning U.S. company or its business. But USCIS requires that the U.S. employer should conduct business in two or more countries either directly or through affiliates or subsidiaries. Also, the U.S. company must have been in business for at least one year prior to the fling of the EB-1C Multinational Manager or Executive immigrant visa petition.
The EB-1C classification depends upon the U.S. operations to which the foreign employee will be assigned. Under USCIS rules, the following relationships are considered qualifying:
1) The U.S. company is the parent or subsidiary of the foreign company;
2) The U.S. and the foreign companies are affiliates.
3) The U.S. operation is a branch office of the foreign company, or vice versa.
Proving the existence of a qualifying organization is one of the important aspects of a successful EB-1C petition.
4. The Corporate Relationship between the Foreign Employer and the U.S. Employer
The corporate relationship between the foreign employer and the U.S. employer must be a qualifying one. The immigration regulations provide the following definitions:
1) Parent/Subsidiary: According to USCIS regulation, the parent/subsidiary relationship between the company abroad and the U.S. company can be either way. Any of the following situations will establish a parent/subsidiary relationship:
1) one company owns more than 50% of the other, and controls the other company. It is not uncommon for one company to own and control 100% of the other (the so-called wholly-owned subsidiary).
2. one company owns 50% of the other, and controls the other company;
3) one company owns 50% of a 50/50 joint venture and has equal control and veto power; or
4) one company owns less than 50% of the other, but in fact controls it.
This suggests that a subsidiary relationship is based more on control than actual majority ownership. A subsidiary relationship will exist even if the parent owns less than half the subsidiary entity, so long as the parent exercises the control over the subsidiary. Obviously, if the parent owns less than half of the subsidiary, more extensive documentation must be shown to establish such control.
2) Affiliate: According to USCIS regulation for determining whether an employer qualifies to use the EB-1C Multinational Manager or Executive petition, the affiliate is defined to include one of two subsidiaries both of which are owned and controlled by the same parent or individual:
both subsidiaries are owned and controlled by the same parent or individual; or
one of two legal entities owned and controlled by the same group of individuals.
This definition therefore includes situations where a group of individuals collectively control each entity and where the each individual in the group owns shares in approximately the same proportion for each entity. Not all shareholders have to own shares in the other entity, as long as the control group meet the requirements under this definition.
For example, the meaning of affiliate includes certain international accounting firms. Where such firms market accounting services under the same internationally recognized name, or under an international partnership or similar organization, the foreign partnership is considered an affiliate of the U.S. partnership.
3) Branch Office: A branch is an operating division or office of the same organization housed in a different location. While the branch office or division may be distinctly organized or incorporated in the U.S. or the foreign country, it is necessarily 100% funded, controlled by, and forms an integral part of the company to which it belongs. Therefore, the U.S. company may be a branch company of the foreign company, or the foreign company may be a branch company of the U.S. company.
4) A U.S. Company Was Acquired by a Foreign Corporation: There is no requirement that a qualifying relationship exist between the U.S. and foreign entity for a period of one year prior to the filing of the EB-1C petition. The regulations only require that the U.S. entity must have been doing business for at least one year. As a result, a U.S. entity that has been acquired by a foreign corporation may immediately file EB-1C petition on behalf of a manager or executive who worked for the foreign entity in a qualifying capacity for the requisite period of time.
5. EB1 Multinational Executive or Managerial and the Factor of Company's Size
Some petitioners may argue that their beneficiary's proposed position fits under the statutory definitions for managerial and executive capacity, and USCIS adjudicators should not place undue emphasis on the size of the petitioning entity's support staff without taking into account the reasonable needs of the organization.
While the size of a company's personnel cannot be the sole consideration for USCIS to determine a petitioner's eligibility for an EB-1C petition, this factor is relevant for USCIS and should be considered, as it allows USCIS to gauge the petitioner's ability to relieve the beneficiary from having to primarily engage in the daily operational tasks of an organization.
When a petitioner fails to provide a detailed description of the beneficiary's proposed tasks within the context of the organizational hierarchy at the time of filing, USCIS may conclude that the beneficiary would be required to assist with daily operational tasks and would not be able to focus on primarily qualifying managerial or executive tasks.
Moreover, in reviewing the relevance of the number of employees a petitioner has, U.S. federal courts have generally agreed that USCIS "may properly consider an organization's small size as one factor in assessing whether its operations are substantial enough to support a manager" in several cases. "
Therefore, while USCIS concedes the alien beneficiary's position in the petitioner's organizational hierarchy, this single factor does not displace the significance of other factors, including a detailed description of the proposed tasks, and evidence of adequate staffing enabling the petitioner to relieve the beneficiary from having to primarily perform non-qualifying operational job duties.
Thus, an alien employee who "primarily" performs the tasks necessary to produce a product or to provide services is not considered to be "primarily" employed in a managerial or executive capacity. Also, the petitioner's eligibility for EB-1C petition must be established based on the facts that were in existence at the time the Form 1-140 was filed.
6. Doing Business for at Least One Year Prior to Filing the EB-1C Multinational Manager or Executive Petition
The regulation for EB-1C Multinational Manager or Executive petition states that the petitioner must establish that it has been doing business for at least one year prior to filing the Form 1-140. Also, the regulation states that doing business means "the regular, systematic, and continuous provision of goods and/or services by a firm, corporation, or other entity and does not include the mere presence of an agent or office."
If the petitioner had not been doing business for one full year, the EB-1C petition cannot be approved. A petitioner should do business in the manner and within the time prescribed by regulation in the United States, with bank records and financial documentation. Going on record without supporting documentary evidence is not sufficient for purposes of meeting the burden of proof in these proceedings.
7. “One-in-Three” Rule for EB-1C Multinational Managers / Executives
The U.S. Citizenship and Immigration Services (USCIS) has adopted an Administrative Appeals Office (AAO) decision. The USCIS clarified that a beneficiary cannot qualify as an employment-based, first preference immigrant as a multinational manager or executive (EB-1C) if that beneficiary works for an unrelated company for more than two years after entering the United States.
One of the requirements for qualifying for an EB-1C Green Card petition is that the individual must have worked as a manager or executive for a company related to the U.S. petitioning employer, for at least one year within the past three years, referred to as the one-in-three rule.
However, if the foreign worker enters U.S. to work in nonimmigrant status for the petitioning employer or a related entity, the one-in-three requirement is tolled to look at the three-year period before the date of admission. In other words, rather than looking at the three-year period immediately prior to the filing of the EB-1C petition, the USCIS will examine the three years prior to entering to work for the U.S. entity.
In Matter of S-P- Inc, the foreign national worker was employed in a qualifying position in Indonesia for more than one year. In 2008, he was transferred to the Indonesian company’s U.S. affiliate. In 2010, he left that employer to work for an unrelated U.S. company until 2014. Then, he went back to work for the original U.S. affiliate of the Indonesian company.
The affiliate company filed an EB-1C petition for the foreign national worker, arguing that the one-in-three rule is satisfied by examining the three years prior to admission. The USCIS rejected this argument, determining that, because there was an interruption in employment with the U.S. petitioner, the relevant period was the three years prior to submission of the EB-1C petition, rather than the three-year period prior to admission to the U.S. On appeal, the AAO agreed with this interpretation by the USCIS, and let the decision stand.
This decision by the AAO is not particularly surprising. However, It is helpful to have the AAO finally provide clear guidance on the one-in-three rule. The U.S. Citizenship and Immigration Services (USCIS) has adopted the Administrative Appeals Office (AAO) decision in Matter of S-P-, Inc.
In adopting this decision, the USCIS also issued a policy memorandum clarifying that a beneficiary cannot qualify as an employment based, first preference immigrant as a multinational manager or executive (EB-1C) if that beneficiary works for an unrelated company for more than two years after entering the United States.
8. What Evidence Is Appropriate to Submit to Support an EB-1C Petition
According to USCIS, the following evidence is appropriate to submit to prove an alien applicant's managerial or executive capacity:
1) Description of the alien beneficiary's supervisory capacity: For the alien beneficiary's supervisory capacity, a first-line supervisor is not considered to be acting in a managerial capacity by USCIS, merely by virtue of his/her supervisory duties, unless the employees supervised by the alien beneficiary are professional. Thus, the EB-1C petitioner should submit evidence of the business organization and description of the alien beneficiary's supervisory capacity. If the company hires employees with bachelor degrees or higher, than a first-line supervisor can be considering acting in a managerial capacity.
2) Description of staffing levels and development of the compnay: If the staffing levels are used to determine whether an alien beneficiary is acting in a managerial or executive capacity, the reasonable needs of the organization and function should be taken into account, with the overall purpose and stage of development of the company. An alien beneficiary will not be considered to be acting in a managerial or executive capacity by USCIS, merely on the basis of the number of employees that the alien beneficiary supervises or has supervised.
3) Documentation of a job offer: No labor certification is required for EB-1C Multinational Manager or Executive petition, but the U.S. employer should submit a job offer in the form of a statement which indicates that the alien beneficiary will be employed inside U.S in a managerial or executive capacity. Such employment letter should clearly describe the duties to be performed by the alien beneficiary.
9. What Documents Should Be Used for EB-1C Multinational Executive or Manager Petition
The burden of proof in EB1 Multinational Executive or Manager petition (EB-1C) rests solely with the petitioner. The petitioner has to provide substantial evidence of the U.S. employer and the alien employee's position and duties. If an alien beneficiary is qualified for EB-1C petition with Form I-140, the probability of an EB-1C petition's success depends largely on the way the case is presented by the U.S. employer.
If the evidence is relevant and well presented, and the argument is made persuasively, then the case should be approved routinely. The EB1 Multinational Executive or Manager petition should include the follow documents:
1) provide evidence and a cover letter that describes the name of the foreign employer;
2) the position offered in the U.S.;
3) the position held abroad and the years of employment as well as the date the beneficiary transferred to the U.S.;
4) state the claimed relationship between the foreign employer and the U.S. petitioner, i.e. affiliates, subsidiary, joint venture etc.;
5) provide evidence that the U.S. employer has been doing business for at least one year prior to the filing of the petition.
10. Some Considerations of EB-1C Multinational Executive or Manager Petition
1) How difficult to have EB1 Multinational Manager or Executive petition approved: The burden of proof in EB1 Multinational Manager or Executive petition rests solely with the petitioner. The petitioner has to provide substantial evidence of the employer and the alien employee's position and duties.
If an alien beneficiary is qualified, the probability of EB-1C petition success depends largely on the way the case is presented to USCIS. If the submitted evidence is relevant and well presented by the petitioner, and the argument is made persuasively, then the EB1 Multinational Manager or Executive petition should be approved routinely by USCIS.
2) Can a foreign company satisfy the one-year doing business requirement in the U.S. by acquiring a U.S. company: According to USCIS, there is no requirement that a qualifying relationship exist between the U.S. and foreign entity for a period of one year prior to the filing of the EB1 Multinational Manager or Executive petition.
The immigration regulations only require that the U.S. entity must have been doing business for at least one year. Therefore, a U.S. company that has been acquired by a foreign company may file an EB-1C petition immediately, on behalf of a manager or executive who worked for the foreign company in a qualifying executive or manager capacity.3) Can I aggregate the time I work for the foreign company to satisfy the one out of three year working requirement: For the length of employment abroad, the USCIS permits the alien applicant to have worked for one year out of the preceding three years for the employer abroad, and USCIS regulations do not prevent the possibility of aggregating employment time during the preceding three-year period in order to attain the one-year requirement of EB1 Multinational Manager or Executive petition.
11. Reasons for Denying an EB-1C Petition or Issuing an RFE (Request for Evidence)
For years, the following two reasons are cited mostly by USCIS adjudicators to deny an EB1 Multinational Executives and Managers (EB-1C) petition:
1) The failure to demonstrate an ability to pay the proffered wage or salary to the alien beneficiary, and
2) The failure to demonstrate that the alien beneficiary will be employed in a managerial or executive capacity in United States.
USCIS adjudicators will deny an EB-1C Multinational Executives and Managers petition, if the U.S. employer is unable to show that it is able to pay the wage or salary offered to the alien beneficiary. For the employer's ability to pay the proffered wage or salary, the related law states:
"Any petition filed by or for an employment-based immigrant which requires an offer of employment must be accompanied by evidence that the prospective United States employer has the ability to pay the proffered wage. The petitioner must demonstrate this ability at the time the priority date is established and continuing until the beneficiary obtains lawful permanent residence. "
"Evidence of this ability shall be either in the form of copies of annual reports, federal tax returns, or audited financial statements. In a case where the prospective United States employer employs 100 or more workers, the director may accept a statement from a financial officer of the organization which established the prospective employer’s ability to pay the proffered wage. In appropriate cases, additional evidence, such as profit/loss statements, bank account records, or personnel records, may be submitted by the petitioner or requested by the Service."
12. How to Prove the Employer's Ability to Pay the Proffered Wage or Salary
To prove the employer's ability to pay the proffered wage or salary, the required initial evidence should be in the form of copies of annual reports, federal tax returns, or audited financial statements. With the submitted evidence, the USCIS adjudicators will determine the employer’s ability to pay, based on if the requirements could be satisfied:
1) Net Income: the submitted evidence should indicate that the employer’s net income is equal to or greater than the proffered wage;
2) Net Current Assets: the submitted evidence should indicate that the employer’s net current assets are equal to or greater than the proffered wage;
3) Wage Payment: the submitted evidence should indicate that the employer not only is employing the alien beneficiary, but also has paid or currently is paying the proffered wage.
13. What Documents Can Be Supplementary Evidence for Employer's Ability to Pay the Proffered Wage or Salary?
If the required initial evidence for EB1 Multinational Executives and Managers petition does not establish the employer's ability to pay, the USCIS adjudicators may issue a Request For Evidence (RFE) notice to ask for additional evidence, or may deny the petition directly, since the petitioner has not met the burden to establish eligibility for the requested benefit for EB-1C petition.
For some businesses and situations, the net income or net assets may not reflect the empoyer's financial status accurately, therefore may not indicate the empoyer's ability to pay. Thus, additional financial documents and different evidence may be used to demonstrate the employer's ability to pay.
For employer's ability to pay issue, USCIS adjudicators may consider other financial documents such as profit/loss statements, bank account records, or personnel records, or USCIS adjudicators may also choose not to accept other financial documents or different calculations.
In any case, the petitioner of EB1 Multinational Executives and Managers case should provide all financial information that may help to show the employer's ability to pay, and explain how the submitted documents may demonstrate the employer's ability to pay. A statements from the petitioner’s financial officers clearly explaining the analysis and how it proves ability to pay will help the EB-1C petition greatly.
The petitioner for EB1 Multinational Executives and Managers can also demonstrate its ability to pay with available cash. The EB-1C petitioner can explan its corporate tax structure and accounting methods, and show the sources of ready cash that may be used to pay the alien beneficiary. The USCIS adjudicators could consider the employer's normal accounting practices, if its ability to pay is not reflected in their tax returns.
Therefore, the petitioner should convince the USCIS adjudicators that the consideration of ability to pay should be judged with totality of the circumstances, rather than a reliance solely on net income, or net current assets. But a petitioner should make a best effort to satisfy the three circumstances at the initial petition submission time, and not rely on additional financial information to demonstrate their ability to pay at the stage of Request For Evidence (RFE) response.
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