| News Sep 2010 US business immigration Module |  |  |  | |
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Business Immigration to the US
- Now More Complex than Ever
Intra Company Transfer Visas vs. Treaty based Visas |
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by Anne Grethe Martensen, MBA, HA (Jur.) and Finn Martensen, Attorney at Law, Advokat(H), LL.M. Martensen Wright Advokatfirma |
Immigration lawyers have recently observed certain changes in the visa authorities' processing of Intra Company Transfer visas. (L1 visas) The changes make it more important than ever to plan immigration matters well in advance of a planned expatriation and closely consider what visa type to apply for in order to get the best basis for having the petition approved.
In the following we outline some of the observations we have recently made and which are of particular interest for Danish companies who plan to station employees in the US. |
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L1 Intra Company Transfer Visas - Recent Development
Business visa matters very often pertain to the situation where a foreign company (For example a Danish company) desires to transfer a Denmark based employee to its subsidiary in the United States. The L-visa category pertains specifically to that situation, and it has historically been rather straightforward to obtain such visa provided the basic requirements were met. The basic requirements are the following: 1) The US subsidiary (or other related entity) must be owned by the foreign (Danish) employer by at least 50%. 2) The employee must have been employed within the employer business group outside the US for at least one year within the past three years in a managerial or specialized position. 3) The position offered the employee in the US must be either an executive or management position (L1-A category) or a specialist position. (L1-B category)
Provided the petitioner could demonstrate by the preponderance of the evidence (meaning that it is more likely than not) that the requirements were met the petition were regularly granted.
Over the past months it has proven more and more difficult to obtain approval of L-1 visa petitions. Among the participants and speakers at the yearly American Immigration Lawyers Association (AILA's) conference it was the general observation that the US immigration authorities (Specifically certain of the Service Centers) have drastically raised the requirements to the employee's degree of specialization or level of executive or management position. As participants at that conference we could recognize these observations on the basis of our own experience.
Further, it is rather the rule than the exception that the authorities' initial response to a petition is a detailed request for submission of further evidence to support the petition. In many instances where detailed further evidence is submitted by the petitioner the matters are still rejected. Besides raising the requirement to executive or management position or specialization it seems to appear that the authorities have raised the threshold of the burden of proof to a level that resembles "proof beyond any reasonable doubt" or "clear and convincing evidence". However, such possible changes to the requirements have not been made public.
The aforementioned makes it more relevant than ever to consider alternative visa solutions when applying for visas to employees already employed within the petitioner's group of companies. Two alternatives are often relevant and provide not only a better chance of approval but also savings of application fees.
First alternative: The E-1 Treaty Trader Visa
First alternative to consider is the E-1 Treaty Trader visa. That visa category rests on a treaty entered into between Denmark and the US. The basic requirements are the following: 1) The petitioning company must ultimatively be Danish owned, defined as at least 50% Danish ownership. 2) The beneficiary (the employee) must be a Danish citizen. 3) The petitioning company must demonstrate that it has established a "substantial trade" of goods or services between Denmark and the USA, and that trade must consist of at least 50% of the company's total international trade. The trade requirement just mentioned may be fulfilled either by the Danish company or by the US subsidiary that is to hire the beneficiary.
E-1 visa applications are processed directly by the American Embassy in Copenhagen. This is in contrast to the L-visa petition that is first handled by the Service Centers in the US. If the petition for en L1 visa is granted the matter is thereafter being finalized by the American Embassy in Copenhagen who interviews the beneficiary and then issues the visa if all conditions for doing so is found to be fulfilled.
Second Alternative: The E-2 Treaty Inventor Visa
The second alternative to consider is the E-2 Treaty Investor Visa. Like the E-1 visa the E-2 category rests on a treaty entered into between Denmark and the US. The basic requirements are the following: 1) The petitioning company must ultimatively be Danish owned, defined as at least 50% Danish ownership. 2) The beneficiary (the employee) must be a Danish citizen. 3) The petitioning company must demonstrate that "substantial funds" has been or is in the process of being invested in the US, and that these investments are business investments that are placed "at risk" in a commercial sense.
The latter requirement means that the funds must indeed be invested and not only placed on an account owned and controlled by the investor. Investments can be in most types of business assets such as for example inventory, machinery, equipment, real property, pre paid rent or company vehicles. Investments can be made contingent upon approval of the visa application. Such contingency arrangement requires that a purchase contract is established according to which the purchase is contingent only upon granting of the visa and that the purchase sum is placed in escrow with a third party who is obliged to release the funds upon approval of the visa application.
There is no specific minimum requirement for the amount to be invested. Amounts well under 100,000 USD has been sufficient in certain matters if the applicant can demonstrate that such investment is adequate to start up the US business and that the US business will yield a surplus that will exceed what is needed not only to support the expenses of the employee, but also to support the growth of the company, both in revenue, income and number of employees.
Further Comments on E Visas vs. L Visas
It is the authors' experience that the case handling of E visa applications at the consular level (as for example the American Embassy in Copenhagen) is often somewhat more flexible that the case handling of the L1 visas with the Service Centers in the United States. There are good reasons for that: The visa categories handled at the Service Centers are based on US Federal legislation. That legislation is extremely detailed wherefore all details of the requirements need to be met. Further, the Service Centers handle a very large number of cases which does not allow for individual correspondence with the adjudicator. Thus, the case handling leaves no option for flexibility.
In contrast to the just mentioned the E-visa requirements are more broadly defined and some discretion is left to the consular authorities. Further, the case load (specifically at a medium sized embassy as that in Copenhagen) is not of the magnitude as at the service centers. This opens up for a more personal handling of the matters and even direct communication to the adjudicator from time to time. The flexibility just described shall not lead to the conclusion that an E visa application is not being scrutinized by the adjudicator. Thus, E visas will naturally not be issued unless all requirements are met.
E-1 and E-2 visas are not only relevant in situations where it is the desire to have a current employee work for a group related company in the US. Indeed, in situations where the person to be employed in the US has not previously been employed by a company that is group related to the US employer the E-visa category is often even more important to consider because the L1 visas are never applicable in these situations.
An E visa is normally issued for an initial period of 2 or 5 years. Thereafter the visa may be extended to cover additional periods of time without limitation as long as all requirements are met. This is in contrast to the L visas that have a set time limit of 5 years (L1-B visas) or 7 years. (L1-A visas) Further, L visas are granted for an initial period of only 1 year if the US subsidiary has been established for less than one year. This often makes it difficult to have the L visa extended when the 1-year term comes to an end if the business in the US has not developed according to the business plan.
Conclusion
The brief conclusions of the aforementioned is:
• Plan the stationing of foreign employees in the US well in advance.
• Apply for L1 visas only where you have a very strong case or if no alternative visa type exists.
• Treaty based visa (E visas) are preferable in most situations where the requirements for such visa can be met.
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