Opening a New Office in the US
I often get asked this question from callers anxious to start a new business in the US, “I have a thriving business in (fill in the name of the country) — a large part of my business is in the US. I want to start a new office there. How do I start a new office?”
Have a US Connection
The new US office must have a corporate relationship with your foreign entity abroad, where you have been employed as a manager, executive or worker with specialized knowledge. This means that the new US office must be a parent, affiliate, subsidiary or branch of the foreign entity, and that both the US office and the foreign entity must continue to share common ownership and control.
Demonstrating a Relationship Between the Foreign and US Offices
Here are some examples of how a relationship can be demonstrated between the US and foreign office:
- Articles of incorporation showing common ownership of the US and foreign entities
- Business licenses or other documents showing common ownership of the US entity
- Annual reports describing the corporate structure
- Contracts or other documents detailing the affiliate relationship
- Corporate filings in the US or abroad, describing the corporate relationship
- Any other evidence demonstrating ownership and control over the US and foreign entities (i.e., stock purchase agreements, voting rights agreements, capitalization table, term sheet)
Demonstrate Foreign Employment as a Manager, Executive or Specialized Knowledge Worker
Examples of your foreign position:
- Organization charts showing your position
- Patents or other evidence of the company’s technology, products or services that are based on your work
- Performance reviews
- Loans/financing on behalf of the company
- Organizational job descriptions for your position and those positions that reported above and/or below you, if applicable
- Resume describing your job accomplishments
- Pay stubs
- Evidence of work product
- Payroll records
- Tax returns that show employment
The New Office Must be Operating Within One Year
The “new office” L-1 visa is meant to facilitate a “ramp up” period for a new US office of a foreign entity. This period is limited to one year. After that time, an extension of the L-1 visa is available if the new office meets this requirement. What makes an office active and operating will differ depending on the nature of the business. Typically it will involve factors, such as hiring additional employees, fulfillment of contract orders, having a revenue stream, or holding inventory, if applicable.
The New Office Must be Able to Support a Full Time Manager or Executive
While a new office may be opened on an L-1 visa by someone working within your organization in a managerial, executive or specialized-knowledge capacity, after one year the office must be sufficiently active to support a manager or executive. During the first year ramp up, a manager or executive may be required, as a practical matter, to engage in many “hands-on” tasks that go beyond inherently managerial or executive tasks. After the first year, however, the manager or executive will be required to focus primarily on managerial or executive tasks in order to obtain an extension of the L-1 visa.
Examples of Evidence of a New Office are:
- Purchase orders, contracts or other evidence of commercial activity
- Payroll records for employees hired
- Bank statements
- Financial reporting documents showing monthly income
- Continued venture capital or other third party investment contribution based on achieved milestones
- Media coverage of the business
- Position descriptions providing the roles and responsibilities of all current employees, or other evidence which clearly demonstrates how the manager or executive is relieved of non-qualifying duties
New office L-1 visas are usually granted for one year to qualified applicants. The denial rate in India is generally about 25%. There is a general belief in both the Department of State and USCIS that the incidence of fraud is very high in India, due to the falsification of evidence and supporting documents.
See you in my next blog.
Nalini S Mahadevan, JD, MBA
St. Louis, Missouri
The information is not meant to create a client-attorney relationship. This blog is for informational purposes only, and is not a substitute for legal advice. Situations may differ based on the facts.
Copyright 2014. All rights reserved.
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