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Examining the L-1 and O-1 Visas as Options for Entrepreneurs

Business options

The L-1 and O-1 visas are nonimmigrant visas that allow foreign nationals to work in the U.S. These visas have very different criteria but one thing they have in common is that they are both potential options for entrepreneurs who want to work in the U.S. These visas can also be good alternate options for entrepreneurs if an applicant cannot qualify for an E-1 or E-2 visa because they do not have treaty country nationality.

Below we will provide a brief description of the O-1 and L-1 visas and a few examples to help foreign nationals determine which option is best for their situation.

L-1 Visa

The L-1 visa allows a U.S. company to transfer an executive, manager or specialized knowledge worker to the U.S. from a company abroad. The employee must have worked for the company abroad for at least one year out of the past three years and the company abroad must have a qualifying relationship with the U.S. company. This means the companies must be related through a branch, affiliate, parent or subsidiary relationship. Additionally, both companies must be actively doing business, or the employee must be coming to the U.S. to open a new office.

L-1 Visa – Pros and Cons for Entrepreneurs

The L-1 visa is often used in a situation where an entrepreneur is running a successful company abroad and wants to open a new office in the U.S. The owner of the company can come to the U.S. as an executive, as long as they can show they were actively working for the company abroad for at least a year. If they own the company but were only a passive owner, they would not qualify for the L-1.

The L-1A visa can be granted for an initial period of one year (for a new office application) or three years (if the U.S. company has already been doing business for over a year). The visa can be renewed in increments of 2 years for up to 7 years total. After that, the entrepreneur would need to switch to another visa or green card or depart the U.S.

The L-1 visa is a dual intent visa, meaning it allows foreign nationals to be in the U.S. on a nonimmigrant (temporary) visa, while also having the intent to apply for a green card to live in the U.S. permanently. Often, L-1A visa holders will apply for the EB-1C green card, which is available for multinational managers or executives. The requirements for the L-1A and EB-1C are similar, but there is a heightened standard for the EB-1C, so being granted an L-1A does not mean the applicant will automatically qualify under the EB-1C standard.

O-1 Visa

The O-1 visa is for individuals of extraordinary ability. Generally, an entrepreneur will apply under the O-1A category for extraordinary ability in business or in the field that their company is operating in. To qualify for an O-1A, the foreign national must either have won a major award (e.g., a Nobel Prize) or meet three out of eight regulatory criteria to demonstrate that they are one of a small number of people who have risen to the very top of their profession. Foreign nationals cannot self-petition for the O-1, meaning they must have a U.S. employer or U.S. agent who submits the petition for them.

O-1 Visa – Pros and Cons for Entrepreneurs

O-1s can be used for entrepreneurs who can demonstrate they have extraordinary ability in their field. As mentioned above, foreign nationals cannot self-petition, so there must either be a U.S. company or U.S. agent who files the petition on their behalf. The Foreign Affairs Manual supports the idea an O-1 applicant can own the U.S. company that is petitioning for them.  9 FAM 402.13-2(b) states the following: “While O-1 beneficiaries may not self-petition, a separate legal entity owned by the O-1 beneficiary may be eligible to file a petition on behalf of the O-1 beneficiary.” This means the O-1 applicant may either form a U.S. company and have that company submit the petition on their behalf, or they could have a U.S. agent that contracts with their company to allow them to work at the company. If the U.S. company is brand new, it can be helpful to submit contracts with clients and/or a business plan, to show that there is sufficient work in the applicant’s area of extraordinary ability.

The O-1 can be granted for an initial period of three years and renewed indefinitely in increments of one year. Sometimes an O-1 visa can be granted for an additional three years if you can demonstrate that there is a new series of events or activities that the applicant will be working on, but USCIS is not always consistent about this.

The O-1 is not a dual intent visa in the same way as the L-1, but there is a lower standard for demonstrating nonimmigrant intent and merely having an immigrant petition filed does not necessarily prevent an applicant from getting a new O-1. Often, O-1A visa holders will apply for the EB-1A extraordinary ability green card. Similar to the L-1A and EB-1C, the requirements for the O-1A and EB-1A are similar, but there is a heightened standard for the EB-1A, so being granted an O-1A visa does not mean the applicant will automatically qualify under the EB-1A standard.

How should an applicant decide between an O-1 or L-1?

The O-1 visa is largely focused on the accomplishments of the individual applicant. The L-1 visa is focused on the relationship between the company abroad and the U.S. company, the success of each company and the specific role the applicant has held abroad and the role they will hold in the U.S.  Let us look at two scenarios below to illustrate when an O-1 or L-1 may be more favorable.

Scenario 1:

Bill started a successful marketing company in India 3 years ago. He owns 50% of the company and is the CEO. The company has 60 employees and expanded into the U.S. market a year ago. The Indian company owns 100% of the U.S. company and the U.S. company currently has 10 employees and steadily growing revenues. Bill plans to come to the U.S. to act as CEO. Bill has over 10 years of experience in marketing, although he mostly worked in more junior positions. The Indian company is his first entrepreneurial endeavor.

In this scenario, an L-1 visa would likely be a better option than an O-1 visa. The facts indicate that Bill could not easily prove that he is an individual of extraordinary ability, as he previously held mostly junior positions in his field and only recently started working as an entrepreneur. In contrast, the L-1 requirements appear to be easily met. The Indian company and U.S. company are both actively doing business and have a qualifying parent/subsidiary relationship. Bill has been working in an executive role for the company abroad for at least one year in the past three years and will hold an executive role in the U.S.

Scenario 2:

Amy has been working in C-level jobs at major corporations in Europe for over 20 years. She has won major awards from the government and industry organizations. She is frequently interviewed by major newspapers and industry publications and travels several times a year to provide keynote speeches on developments in her industry. She now wants to start a business in the U.S. providing consulting services in her area of expertise and has incorporated a Limited Liability Company in New York. The company has not started operating yet but she has hired a CFO and is currently negotiating contracts with multiple clients.

In this scenario, an O-1 would work better for Amy. The facts do not indicate that there is a company abroad that wants to send her to the U.S., so the L-1 would not be an option. Given her work history, she appears to meet several of the O-1 criteria for extraordinary ability. Additionally, she has incorporated a company in the U.S. that could be the U.S. petitioner for her application. As a best practice, it would be better for the company’s CFO to sign the petition rather than to have Amy sign. One benefit of the O-1 over the L-1 in this scenario is that it is not an issue that the U.S. company has not taken in revenue. Showing a business plan and/or client contracts will be helpful to show that there is sufficient work in Amy’s area of extraordinary ability, but there is no requirement that the company get office space or hire employees, as would be the case in an L-1 new office petition.

As shown above, despite the significantly different criteria, both the L-1 and O-1 can potentially work for entrepreneurs. It can be very helpful to discuss your situation with a qualified immigration attorney to determine which visa option would work best in your situation.

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