In order to transfer an executive officer to the U.S. under theEB-1C immigration category, the foreign company that the beneficiary is employed by must have a specific kind of affiliation with the respective U.S. company that the beneficiary will be transferred to. The USCIS considers common ownership and effective control as the main factors that establish the necessary qualifying relationship between business entities. Ownership means the legal right of possession and full power over a business entity and control means the right and authority to direct the management and operations of that business entity.
The U.S. employer(petitioner) that seeks to sponsor an EB-1C international executive transferee must either be a parent, branch, affiliate, or subsidiary of a foreign company, as defined by federal law.
If a foreign entity owns more than 50% of a U.S. entity and is therefore a majority owner of the U.S. entity. For example, a large technology company in India owns more than 50% of a smaller, related U.S. company.
If a U.S. entity owns more than 50% of a foreign entity and is therefore a majority owner of the foreign entity. For example, a large American company owns over 50% of Chinese computer company.
A branch means an operating division or office of the same organization housed in a different location. For example, a company might have branches of their business located in many countries throughout the world and need to transfer employees between them.
A subsidiary: a firm, corporation, or other legal entity of which a parent owns, directly or indirectly, more than half of the entity and therefore has control of; or, owns directly or indirectly half of the entity and controls the entity; or owns 50% of a 50/50 joint venture and has equal control and veto power over the entity as the other half of ownership; or, owns less than half of the entity, but in fact controls the entity.
For example, Chinese company A holds 49% of the stocks of U.S. company B. The rest of the stocks are divided among another ten investors, with none of them holding more than 10%.Company B qualifies for an L visa application because company A has actual control over company B.
An affiliate means:
One of two subsidiaries, both of which 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, with each individual owning and controlling approximately half the same share or proportion of each entity.
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 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 that is organized outside the United States to provide accounting services shall be considered to be an affiliate of the U.S. partnership if it markets its accounting services under the same internationally recognized name under which the agreement with the worldwide coordinating organization of which the U.S. partnership is also a member.
The filing materials must substantiate that the two organizations, whether they are a parent, branch, subsidiary, or affiliate of the other, have common ownership and control in order for a manager or executive to qualify for an EB-1C visa. Say for instance that foreign Company A is an affiliate of U.S. Company B. Company A has four shareholders A, B, C, and D with A having majority control. Company B also has four shareholders, A, B, E, and F with A also having majority control. Although they are not owned by the exact same group of individuals, the same individual has majority ownership of both companies. Therefore, the two companies have a qualifying relationship.
A contractual relationship (i.e. licensing/franchising) is generally not sufficient to establish the necessary relationship to qualify for the EB-1C visa. If one or both of the qualifying entities has undergone or will undergo some type of corporate reorganization, such as a merger or acquisition, the USCIS must be informed and determine whether the qualifying relationship between the entities will still exist.
Clarifying Common Control: A Real-Life Example
On April 29, 2010 attorney in our Los Angeles Offices filed an EB-1C petition with USCIS on behalf of an executive who intends to permanently move from a Chinese company to its United States affiliate. The executive had already been in the United States on an L-1A nonimmigrant visa. She had majority control of both the U.S. and Chinese enterprises, with the organization of shareholders as follows:
A (Beneficiary)- 60%
A (Beneficiary)- 98%
Attorney Zhang was confident that this relationship would meet the above requirements for an affiliate relationship, as the beneficiary had majority control of both companies. The USCIS, however, issued a denial of the EB-1C petition on September 30, 2010, stating that the evidence provided shows “that both entities are owned by certain individuals and entities that have no ownership in both entities. Thus the two entities are not owned and controlled by the same individuals.”
Attorney Zhang immediately filed an appeal stating that the denial was based on an “erroneous application of law” and that “the qualifying relationship is clearly established by [the beneficiary’s] majority and common ownership of the petitioning company and the overseas affiliated company.” Even though both companies are not owned by the exact same group of individuals, Attorney Zhang was confident that the qualifying relationship was indeed established by the common majority ownership of the beneficiary.
Thanks to Attorney Zhang’s skillful application of the law and persistence, the USCIS reversed their decision regarding the two companies. They declared that their relationship met the necessary requirements to be considered affiliates.
(Updated 10/11/2012 by AG)
For more information on EB-1C Green Card, please refer to the following links:
For more information on EB-1 Green Card, please refer to the EB-1 Green Card information page.