The L1 visa can be a great option where there are two affiliated entities doing business, one in a foreign country and one in the United States, and an executive, manager, or specialized employee seeks to enter the U.S. to work in developing the U.S. entity.
In certain cases, the L1 could work as a great alternative to an E1 treaty trader or E2 treaty investor visa – especially in the three scenarios outlined below.
1. Non-treaty country nationals
A significant limitation of the E category visas is that it is an option only available to nationals of a list of countries that have signed reciprocal treaties with the United States. Representative examples of non-treaty countries include China (including Hong Kong), India, Russia, South Africa, Brazil. For entrepreneurs from these countries, the L1 could be a potential alternative that could allow them to set up and develop a U.S. entity affiliated with their foreign entity that is already doing business.
2. The corporation is not majority-owned by nationals of a single treaty country
In many cases, a corporation acts as an E-1 or E-2 employer to bring in E-1 or E-2 employees that have the same treaty nationality. In this case, the sponsoring company must have the nationality of a treaty country, which means 50% or more of its ownership shares be held by nationals of the same treaty country.
The key difference between an L1 visa as opposed to an E1 or E2 visa is that there is no requirement that the corporation be majority-owned by nationals of a single treaty country that is the same nationality of its employees. The relevant requirement for an L1 visa is that the U.S entity and the foreign entity have a parent, subsidiary, or affiliate relationship, but there is no nationality requirement.
3. Both the foreign entity and U.S. entity are actively doing business (or the U.S. entity will shortly reach that point)
If there is a prosperous and active foreign business affiliated with the U.S. business that is either already running or is about to be set up, the L1 may be a great option. The L-1 visa could be used to send an executive, manager, or specialized employee either to run the U.S. affiliate business or to set up a new U.S. office for that foreign business.
Especially if the existing business operations in the foreign entity is prosperous and active, the L-1 visa may provide a more flexible and straightforward way to develop a related U.S. business compared to the E-2 visa, which requires entrepreneurs to show a substantial monetary investment where the source of funds must be traceable to personal income, or the E-1 visa, where there must already be substantial trade between the U.S. and the treaty country which must exceed 50% of all international trade the business engages in.
Depending on the particularities of your situation and your business operations, one category visa may work better than another. Assistance of experienced counsel intimately familiar with the pros and cons of each option can be of significant help in navigating your visa options for your business project.
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